Payment Options in Cambodia
If you're looking to invest in Cambodia's real estate or curious about payment processes for renting properties there, this guide aims to simplify the basics and assist in smoother transactions.
Buying:
Firstly, obtaining a mortgage or home loan in Cambodia can be challenging for foreigners. As a potential buyer, it's crucial to select the simplest payment methods for your property investment, keeping in mind the fees associated with international transactions.
Cambodia is particularly attractive for USD transactions, as most property dealings are conducted in this currency. Here's a breakdown of common payment methods for property purchase in Cambodia:
Monthly Installment Payments: This option allows buyers to pay in regular installments over time, rather than a lump sum, making purchases more manageable.
Payments Based on Construction Progress: Often used in the construction industry, this method involves paying installments tied to specific construction milestones, as outlined in the contract (also my personal favourite!).
Full Payments: The total amount is paid usually within 30 days of signing the sales agreement, often preferred for securing the best investment prices.
Bank Financing: Mostly available to Cambodian citizens, this involves traditional bank or credit union loans. However, an increasing number of banks are extending loan services to international investors and long-term foreign residents who can prove their income and work history in Cambodia.
Renting:
Rental agreements in Cambodia typically cover security deposits, obligations, utilities, and other details. Security deposits, usually one to two months' rent, safeguard landlords against damages or contract breaches. For longer-term rentals, deposits may be negotiable.
Tenants are usually required to pay rent in advance for each month of their tenancy and on a regular date. Tenants should be aware of this schedule to ensure timely payments and a good landlord-tenant relationship for a healthy relationship.
It should be clarified how the utilities will be paid - utility fees such as water, electricity, and sometimes garbage collection are often paid separately (and quite easily in 2023 as many banking apps make it very convenient to do so). Some landlords might include utility fees in the rental payment to simplify the payment process for tenants
Rental fees might not encompass all amenities such as for Wi-Fi, cable TV, and parking, could be separate from the base rent.
Collecting Rental Income Overseas:
As an overseas investor it’s very important to be able to access your hard earned rental income even though you may be on the other side of the world. Thankfully it is very easy!
Most foreign investors will utilize the services of a property management company or individual. The property manager will collect the rent each month and remit the money directly into your overseas account via approved intermediaries, such as local banks, Western Union, World Remit or MoneyGram.
International Money Transfers to Cambodia:
Sending money to Cambodia is generally a smooth and simple process, but it's essential to have the proper documents and adhere to the applicable laws.
According to the Law on the Foreign Exchange from September 1997, there are no limits on foreign exchange activities conducted via approved intermediaries. This includes buying and selling foreign currency, making transfers, conducting international settlements, and managing capital flows in foreign or local currency, both into and out of Cambodia and between residents and non-residents.
In our experience the first transfer to Cambodia is usually a little more time consuming to get set up, however all future payments are a simple rinse and repeat and take minutes.