Today the word “investment” has been used in many ways. Some people invest in their education, their cars, furniture, arts, or hobbies etc. What do you invest in?
The original definition of investment is “to allocate money in the expectation of some benefit in the future”, and the basic types of investment are; stocks, business, and real estate. Global investors come to Bodaiju to look for investment properties, but
why do they choose “real estate” as an investment?
The main reason for choosing to invest into real estate is because it provides several ways to make money. Real estate produces steady income gain by receiving rent from the tenants who lease the building. Real estate can also go up in value over time and produce capital gain when it is sold.
The other reason people like real estate is because they prefer to make an investment portfolio, which is made up of multiple assets, such as stocks, bonds, and real estate. Investing money only in one of these assets is more risky than dividing it into more than one. Diversification, which means investing in a variety of assets, is the key to the successful investment strategy. Real estate is also a very good hedge against inflation so when the price of goods is going up, real estate rents usually will go up as well and the investor can benefit.
What is capital gain?
When investors choose countries like Cambodia to invest in property, they often expect more capital gain than in their home countries. When they sell the property, they have the opportunity for a capital gain. This happens when the sales price is higher than the original purchase price. However, if the selling price is lower then the original purchase price, investors can incur a capital loss. Investors can also gain stable income which is provided by rent from tenants, which is called income gain.
Ok now, why do they choose Cambodia to invest?
Strong GDP growth is one of the main reasons to be considered that Cambodia has high investment opportunity. Cambodia has the average annual GDP growth at 7.0% for the last 6 years, and the growth is projected to be stable. Cambodia has a high proportion of working people in the total population, and it indicates that more people have the potential to be productive and contribute to growth of the economy. The working population grows so as the economy and consumer activities. More parents choose to have fewer children and spend more money on their children’s health and education. This can add fuel to its rapid economic growth. Cambodia is also a partially dollarized country, and has economic and trade benefits as a member of ASEAN and its strategic location between Vietnam and Thailand. For other advantages, read Invest Phnom Penh.