All posts by Mickey J

Expense Report: December 2014

Third month into my expense tracking and I already missed doing it on time! I got caught up with the holidays and celebrations that I forgot to update my blog. Luckily I continued to enter my expenses conscientiously on my mobile phone.

My total expenses for December is up to $4397.53 (including fixed expenses of $1900.99). That’s crazy high and above my salary! You must be thinking, ‘How could you overspend your budget like that?’ Well, fortunately I made a decent fortune in the mahjong sessions over the past month so a good portion of my expenses were covered by the winnings.

Party party party! I indulged in several gatherings with my friends this month and shopping expenses definitely hit an all time high this month. I look forward to reducing all these expenses next month. I started planning a bicycle commuting route to my new workplace making use of the Park Connector Network (PCN). While transportation costs form a small percentage of my overall expenses, I hope to see it get reduced and get myself fitter with the physical exercise from all that cycling.

January Challenge: Clock 175 kilometers mileage on my bicycle.

Transportation: $124.19

Commuting charges on the B.M.W (bus, MRT, walk) went up this month because I took a few more taxi rides at nights.

Food: $655.81

I was surprised I didn’t spend more than $700 in December considering the fact that I was out with friends a lot more. Awesome!

Groceries: $41.07

Groceries went up compared to last month because I was back on my regular diet and cooking more often.

Shopping: $1587.29

My only excuse was that it’s Christmas so I spent more money shopping online and pampering myself. Time to cut that down after December.

Entertainment: $32.58

Entertainment expenses was pretty mild considering the festive season.

Miscellaneous: $55.70

I bought Christmas presents for the gift exchange at parties but I did not splurge on expensive presents.

The Buyer’s Guide for Cambodia property investment

I have received a request from a reader who was interested in finding out more about buying a property in Cambodia as a foreigner and what are the charges and taxes involved.

Below is a summary of the charges and taxes involved in my purchase of a SOHO unit in The Bridge Cambodia.

Upon selection of property

  • Booking Fee USD1000/S$1250 (one-time payment)

Sale & Purchase Agreement (SPA) will be provided to you within 14 days

  • Upon signing SPA, 10 % of the Purchase Price (minus Booking Fee) to be paid to developer
  • Legal fees of around S$50 – S$150 to be paid if using Notary Public Fee for Witnessing Signature
  • Legal fees of >US$300 to be paid if using a Cambodian lawyer (optional)

Deferred Payment Scheme

For my property purchase, I will have to pay 10% of the Purchase Price every 6 months in cash until I have completed paying 50% of the Purchase Price. Upon completion, I will need to pay the remaining 50% of the Purchase Price (either in cash or mortgage loan) and Stamp Duty Fees (Transfer Fee for Hard Title) of 4% of property value.

Taxes

  • 0.1% per annum tax on Immovable Properties (value determined by Immovable Property Assessment Committee)
  • 10% per annum tax on Gross Rental Income
  • Capital Gain Tax not applicable for individuals and 20% for corporates
  • 10% VAT (one-time) is absorbed by Developer
  • VAT On Resale (one-time) applicable only for VAT registered companies

If you have more questions about investing in properties in Cambodia, please feel free to contact me.

My first investment in overseas property and it’s in Cambodia!

Last week, I made a downpayment for my very first property investment in a country that most investors in Singapore have probably never considered before – Cambodia. My property of choice was a  freehold small office/home office, also known as SOHO in a 45 storeys tall mixed residential and commercial development mixed development in Phnom Penh called The Bridge Cambodia.

Why Cambodia?

Cambodia is one of the countries that I have shortlisted as a potential destination for retirement. The country has a rather impressive average of 7.8% GDP over the last 12 years. With 100% foreign ownership, competitive wages and tax incentives, Cambodia is ready for business. While most Singaporean investors are looking at investing in properties in Australia, Malaysia and the United Kingdom, I decided to jump on the Cambodia wagon to capitalise on first mover advantage and the low property prices in Cambodia.

How I selected my investment property in Cambodia?

When I was doing my research about investing in properties in Cambodia, I learnt that many property developments were
badly hit during the global financial crisis and some of them remained uncompleted to date. While this did not scare me away from investing in Cambodia, it was clear that the selection of a trusted property developer is of utmost importance.

Looking at the list of property developments that are in the market, I shortlisted The Bridge Cambodia because it is jointly developed by two prominent property developers – Singapore-based Oxley and Cambodia-based Worldbridge Land. Oxley Holdings Pte Ltd has a strong track record as a property developer and is listed in Stock Exchange of Singapore.

I went for the cheapest unit available

Coming from a low income family, I didn’t have a lot of capital in the bank. While I want to begin my first foray in the world of property investment, I don’t want to lose everything in one go.

After examining the entire development, I decided on a SOHO unit that costs around 110,000 USD that is able to house a small room for the Director and 2-3 office tables for Executives. This set up is perfect for foreign companies who are coming in with a small footprint to establish their presence in Cambodia.

6% guaranteed rental yield is a good start

One of the reasons why I was interested in The Bridge Cambodia is because the developer  offered a guaranteed rental yield of 6% for the first 3 years. While 6% rental yield is quite decent, the average rental yield in Cambodia is around 10%. It makes me wonder if I could get a higher rental income if I rented it myself or had a local property agent rent the property out on my behalf. That said, with no connections to trusted local property agents, I would play it safe and let the property developer manage the property for me.

How does this property investment change my investment strategy?

Previously, I have been making regular investments into the Nikko AM Singapore STI ETF with a good portion of my monthly income. With this property investment, I will stop making the regular investments in the equities market and hold on to the cash to meet the deferred payment required for the property.

My plan is to try to complete the property purchase with cash and try not to take a mortgage loan because the interest rates charged by Cambodian banks for mortgage loans are too high for my comfort.

Are you looking to invest in properties in Cambodia?

Are you also interested in investing in Cambodia properties and would like to get more information?

Please contact me with your questions and I’ll try my best to answer them and connect you to my trusted property agent to get you started.

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