Individual Cambodians are responsible for personal income tax and foreign source income on Cambodians, while non-residents are subject to income tax on Cambodian sources of income only. Credit is allowed for foreign income tax paid as opposed to Cambodian income tax. The tax credit is calculated separately for each foreign country and is less than the foreign tax payable and the Cambodian tax payable on income from foreign sources. Employees need to withhold income tax from salaries and other benefits provided to employees. Salary is taxed at a development tax rate of 5% to 20%.
It can offer passive income and long-term wealth and even become a full-time career if you are dedicated to your skills. This is especially beneficial compared to other investment options.
Are you considering investing in real estate? Use this guide to understand the advantages and disadvantages of investing in real estate, as well as how to get started.
What is real estate investing?
There are several ways you can invest in Cambodia Real Estate. Buying, repairing and selling property also called house flipping is a common form of real estate investment.
Other investment strategy options include:
- Buying and renting out vacation houses or short-term rentals
- Crowdfunding real estate deals and developments.
When done right, Investing in Real Estate can offer some serious benefits. From equity and passive income to a more diverse portfolio, there are some ways that Cambodia Real Estate can benefit your financial situation.
Here are some major benefits that come with Investing in Real Estate.
You get to build equity for the future plans
As you repay your mortgage or the value of your home increases, you create equity, which you can later cash out. This could mean selling a property for a biggest retirement infusion, tapping equity into a cash out refinance or home equity line of credit (HELOC), or even buying another property and expanding your portfolio. To take advantage of it.
You get protection against inflation
Unlike other types of investment, real estate can offer a hedge against inflation. This is because as the prices go up, you get cash flow from the property. If home prices rise in your market, for example, rents are also natural meaning you are basically keeping pace with inflation.
You can impact your larger community
The markets in which you invest also have many benefits. You can help provide much-needed housing and stability for families, increase city tax revenue, support the local economy and more.
The best part? The more your community thrives, the more your assets will be appreciated. This is a self-feeding circle that can help you build wealth and long-term financial security.
You can diversify your portfolio
If you have already invested in stocks, bonds, gold and other securities, real estate offers a great way to diversify this investment portfolio and reduce risk. By distributing your funds across multiple vehicles, you can cover losses more efficiently, if they occur.
In the long run, this means that it is better to stand in front of market swings and, in many cases, to emerge with more cash as a result.
You qualify for valuable tax advantages
When you invest in real estate, you open yourself up to many tax benefits. Many of your expenses become deductible business expenses, you can write off your mortgage interest, and even avoid paying self-employment income tax on your rental income, depending on how you run your business. You also have the benefit of retiring another tax benefit that can save you money on your annual dues.
You can create regular income
Property can also provide immovable, reliable income, especially rental properties. If you’re still working 9 to 5, that means using it for extra vacations and vacations. And if you really build your portfolio, it can be the equivalent of a brand new career.
Once you retire, Cambodia Property Investment is also a great option, as it helps you with existing social security payments and other retirement funds.
Drawbacks and risks of real estate investing
Of course, there are some great benefits to investing in real estate. But what are the disadvantages?
It requires a lot of upfront capital
Buying an investment property is not cheap. You will need either a large amount of cash or an expensive mortgage loan. If you are financing the property, you will also need payment, expenses incurred and cash deposits. Above all, if you are renting out or renting out a property, you will also need funds to fix the space and market it.
It can be time consuming
Buying, selling and fixing real estate takes a lot of time and effort. And if you are a landlord over it? Although you can hire a property management company to handle some of the work, it’s an added expense and it will definitely cut you down.
It’s highly localized
Your return will depend on the specific Cambodia Property Market in which you buy, sell and rent your property. If you do not choose carefully, you could face serious losses. Investing in Cambodia requires a lot of research to make sure you are choosing the right property in the right place.
Properties require regular maintenance and upkeep
If you are holding and renting out your properties, you will need the funds to run them. This means repairing any faults in the property or system, doing seasonal maintenance in the home and yard, and cleaning and repairing the home among tenants.
There’s added liability
There is a lot of responsibility that comes with renting properties both short and long term. If there are accidents at home or you fail to comply with rental laws in your area, you may be held responsible. And if you are the sole landlord meaning you are not doing business as an LLC or a corporation these responsibilities can also be a threat to your personal wealth and assets.
You lose liquidity
When you put your money into a property, it becomes difficult to access. You have to fix the house, list it, market it, sell it, and wait for the mortgage to close before you see a penny of equity. While this is not a big deal under normal circumstances, if you find yourself in financial constraints and need immediate cash, your real estate holdings can make it difficult to get that amount.