What do you need to know before investing in pre-construction or under-construction condos in Phnom Penh?

One of the surest ways to grow your money is by investing in pre-construction or under-construction condos. Your investment increases value from the first day you purchase the unit and will continue to appreciate until you decide to sell it.

This long-term investment plan is an excellent way to earn passive income. Investing in real estate is one of the best decisions you can make for yourself and your future since you have complete control over it.

However, like any other investment, real estate is subject to cyclical shifts. It is supposed to go up and down, but you have complete control here. If the market is down, you can choose to hold onto your property; when the market is at its top and you are ready to sell, you can make a high return on investment (ROI).

Why are pre-construction or under-construction condos the best investment?

Here are 5 factors to consider investing in pre or under-construction condos in Phnom Penh:

• The incentive price: Pre-construction or under-construction condos are mostly offered at attractive prices. On top of that, the developer always provides special discounts to the early birds.
• Have a pick of your layout: When buying a new construction condo, you can pick a variety floor plan that best suits your need and preference. The earlier a buyer engages in the pre-launch sales, the more opportunity they have in selecting a preferred layout or even influencing finishes.
• A simpler buying process: The process of buying a new construction condo is specifically designed to be streamlined and simple. It will require less of your time and money, compared to the used ones.
• Flexible payment plan: Most developers of the pre-construction or under-construction condos only require 10% – 20% down payment when signing SPA. Buyers also can enjoy the 1% – 2% installment per month until the completion of the construction without interest – meanwhile, the home will appreciate at 100% of its value.
• Capital appreciation: Property value appreciation in Phnom Penh ranges between 5% – 8% per annual (depending on the location and type of development.) Hence, first-comers usually enjoy the appreciation.

Is there any risk of buying pre-construction or under-construction condos in Phnom Penh?

• Move-in date uncertainty: Delays in property completion pose a risk. Contracts will include delay clauses (grace period) that relieve the developer of liability for a period of time.
• Changes in building plan: the final products may differs from what was expected.
• Market variations: Depending on the market, the value of the properties may fall before they are completed. However, it is unlikely to happen in Phnom Penh.
• Financial risk: If a developer ceases business and declares bankruptcy, or if the project is not completed, you may be left with nothing.

Checklist before investing in pre-construction or under-construction condos in Phnom Penh:

• Reputable developer: Do a background check on the property developer before making investment or buying a new home. To avoid the higher risk, you should consult with a reliable local real estate agent.
• Trusted real estate agent: There are many real estate agents in free market like in Phnom Penh. Choose your agent wisely before making your investment decisions!
• Legal firm/ Layer: Get a reliable lawyer to assist you in reviewing the contract for any inconsistence or suspicious clauses.

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