What Types of Investors are You, and What Property Investment Bests Fits Your Trait?

• 12 January 2021
• Local News
• 3504 Views

Given the economic downturn caused by the pandemic, even if you have plenty of cash on hand, you also need to be very cautious when it comes to investing in real estate.

Founder and Director of Key Real Estate and well-known real estate expert in Cambodia Mr Sorn Seap pointed out that you need to first study what kind of investor you are before investing.

Mr Seap categorised investors into three main categories: high-risk, medium-risk and low-risk investors, who have different investment attitudes and are suitable for various real estate types and at different locations.

The 1st category are low-risk investors who expect a return of 10% to 15% per year. This type of investor prefers to invest in existing buildings such as houses, condominiums, and flats in a developed area. They do not want to take risks. They believe that even though their property’s price does not rise, they can have a house to stay, do business, or rent out. If you are this type, you should invest in the west or north side of Phnom Penh. The property price in those two areas is affordable and not as expensive as in the city centre.

The 2nd category are medium-risk investors, most of whom expect a return of 20% to 30% per annum. This type of investor mostly invests in areas that are under development. They pick the location with ongoing infrastructure projects such as markets, roads, airports, or other large projects and expect short-to-medium term profits.

If you are this type of investor, south of Phnom Penh such as the area along the 60-metre road, area around ING project area, the Phnom Penh new airport area, and the 3rd Ring Road should be the ideal choices.

The 3rd category is a high-risk investor who looks at a return of between 50% and 100% per annum. This type of investor is considered an expert, as they can see the potential of a specific area ahead of time. They know in advance because they study and receive information from many sources to analyse and calculate.

For example, the eastern part of Phnom Penh has been attracting the third type of investors, since the news about building the new bridge was still unclear. As of today, though there is no uncertainty of the bridge project yet, investors still continue buying land there. Similarly, if you are this type of investor, Kampong Speu province such as area along National Roads 41, 44 and 51 are also the choices.

In conclusion, the three types of investors have their unique character, and none is better an another. Meanwhile, the factors determining what kind of person you are depends on your cash flow, attitude, personal debt, and most importantly, the level of real estate knowledge.

In other words, the first and second type of investors are the followers of economic growth, which means they wait for the economic activities to boom in a certain area before investing. However, the third type is ahead of the economy.

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