Real estate investing is something we have previously talked about on Hacked. For quite some time now, I have been researching the best places to invest in real estate overseas. With real estate markets in many Western countries slowing down along with their overall economies, more and more people are starting to realize that there may be better opportunities abroad, especially in emerging markets. These are countries with young and growing populations, not aging and declining like Europe. They offer strong fundamentals, and an economy that in some cases grows by double digits each year. I have therefore become increasingly interested in making investments in some of these developing countries, with their much higher returns and opportunities for growth.
In this two-part series, I will go through what you need to know in order to get started with this form of investing, and explain why I am looking at Cambodia specifically as a particularly good opportunity.
Know what you are doing
When it comes to real estate investing in emerging markets, there are a few things that are important to keep in mind. First of all, make sure that you absolutely understand what you are doing and that you trust the people you are dealing with. Laws and regulations are often much less clear than in developed countries, and the whole buying process may sometimes be quite informal compared to what you are used to. Many people actually consider this a blessing, but it can also leave you in a difficult situation should something not go as expected.
Huge differences between countries
Another important thing to keep in mind is that even though you might find great bargains in for example Cambodia, it doesn’t mean all of South-East Asia offers the same potential. In fact, many countries, such as the Philippines, Malaysia, and Singapore, have already experienced tremendous growth in their property markets, and they now seem to be in a bubble state. The reason for this is that there is a lot of money from China scouring all over Asia for investments where they can make a decent return. Especially the Philippines and Malaysia have fallen victims to this, and there is now a huge oversupply of high-end apartments that the locals can not even afford to live in.
Because of these reasons, I chose to look more closely at a country that is still in the early stage of development in terms of this money inflow from overseas. In my opinion, Vietnam, Myanmar, and Cambodia all meet the basic criteria for an interesting investment opportunity at this point. However, with Myanmar being very much a frontier market with high risks, and Vietnam being not as open to foreigners, I have chosen to take a closer look at Cambodia and how you can profit from the huge economic boom that is happening there.
People may have different reasons for wanting to move some of their assets to foreign countries, such as the benefits of international diversification as we have discussed previously. However, my top three reasons for investing in Cambodia are the following:
- Tourism is growing rapidly: Tourism is growing every year in Cambodia and direct flights are constantly being added from cities around the region like Singapore, Kuala Lumpur, Tokyo, and Bangkok. Many westerners also choose to retire here, and it is becoming more attractive as Thailand is becoming overly touristy.
- Growing number of expats: There are already lots of NGO’s, as well as a growing number of international companies setting up offices in the capital of Phnom Penh. Interestingly, there are also more and more westerners setting up base for themselves there, either working in the city or, more often, taking advantage of the low cost of living while building up their own online businesses. I believe the trend of remote work online, and even online freelancing, is just getting started. For this reason, we will see more and more young people choosing to pack up from their home countries and move to countries that offer a better lifestyle for a fraction of the cost back home.
- Dirt cheap: Most people from the West have heard about the extremely low prices you will find in Thailand. If you think Thailand is cheap, Cambodia is cheaper.
Cambodia is perfectly positioned to take advantage of all of this and attract more and more foreigners in the coming years. In fact, the country is one of the easiest in the work when it comes to visas, and offers basically any foreigner who can pay $300 a one-year business visa (without having to document that you run any business!).
In the next article, I will show you exactly how you can get started with investing in real estate in the Cambodian capital of Phnom Penh, including specific neighborhoods to look out for, how much you should expect to pay, and some simple strategies for making money.
Featured image from Pixabay.