Reason foreigners cannot own ground floor: Naïveté

Visitors evinced keen interest in new developments at the Cambodia Real Estate Show.

Foreigners in Cambodia are barred from owning the ground floor of any building in the Kingdom of Wonder.

I finally found out the origins of the prohibition early this month when I attended one of 16 presentations at the Cambodia Real Estate Show, a well organized two-day event that attracted numerous potential developers along with buyers of luxury apartments and buildings.  (Hey, you can take the broker out of real estate, but you can’t take real estate. . .)

It was not until 1989 and then in 2001 that government decrees defined the possession and subsequently, in 2001, full ownership rights of residential property.

Like most other countries in the region, Cambodia does not want foreigners to own a piece of the nation, no matter how small, as codified in Article 8 of the Land Law.

According to presenter Matthew Rendall — a lawyer who holds a Cambodian passport and is managing partner at SokSiphana & Associates in Phnom Penh — the stricture resulted from

Moral dilemma inescapable if investing in microfinance

An ATM owned by Prasac Microfinance Institution in use at a branch in Cambodia’s Kampong Speu province.  Source: Phnom Penh Post

Imagine that you could earn 4.75% interest for a term deposit of only one month.  Might you prefer a one-year term?  That would get you 9.75% per annum, and shorter or longer terms also are available at commensurate rates.

Do those rates sound too good to be true?  They are not.

With such returns offered by Prasac, one of Cambodia’s leading microfinance institutions (MFIs), the wise investor can

So you want to be a landlord. Think twice.

I take no responsibility for my tenant’s interior design choices.

When I lived in Washington, D.C., I was fortunate to have owned a townhouse for a virtual song.  The apartment downstairs basically covered my mortgage and other costs.

The one-bedroom unit with access to a patio that my tenants shared with me rented quickly during my ten years of ownership.

Each of my tenants but one was great, not making too many demands, too much noise or really any problems at all.  It was the last one that, had I the choice, I probably would have

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Part 2 of 2

(Flickr photo by allie_caulfield)

Foreign buyers who successfully cross financing hurdles then need to consider the most prudent way to hold title to real estate.

Lawyers often advise investors — whether foreign or domestic — to purchase property as a limited liability corporation (LLC).

The chief advantage is that LLCs shields their members from financial claims in excess of the value of the real estate.  In other words, an individual’s others assets are protected.

However,