Rental Yield in Phnom Penh: 7-9% Gross in 2026

A two-bedroom apartment in a high-rise along Mao Tse Tung Boulevard in Phnom Penh costs around 78,000 USD today. At a monthly rent of 650 USD, that translates to a gross yield of roughly 10%. For investors accustomed to European markets where comparable properties generate 4-5% gross, this looks extraordinary. But the real picture emerges only after accounting for management fees, local taxes, vacancy periods, and currency risk. This article breaks down every component with concrete numbers.

Cambodia remains one of the few markets in Southeast Asia where foreigners can legally own a condominium on a strata title basis (from the first floor upward) and where the economy is heavily dollarised. That dollarisation effectively eliminates local currency risk for USD-based investors, though it introduces USD/home-currency exposure for those converting profits back to euros, pounds, or other currencies.

Quick answer

• Gross yield in Phnom Penh in 2026 ranges from 7-9% for mid-range units (60,000-120,000 USD) and 5-7% for premium units (above 150,000 USD)
• Net yield after management fees, local taxes, vacancy, and building charges falls to 5-7% in the mid-range segment
• Long-term leasing (12-month contracts with expats and corporate tenants) delivers more stable occupancy than short-term rental platforms
• Management fees charged by professional rental operators run 10-15% of gross rent for long-term lets and 20-25% for short-term arrangements
• Top districts for rental returns: BKK1, Tonle Bassac, Toul Tom Poung, and the emerging Chroy Changvar corridor
• Transaction costs on purchase total approximately 4.5-6% of the property price, including a 4% transfer tax and legal fees of 500-1,500 USD

Options and scenarios

Scenario A: Mid-range condo in BKK1, long-term lease

Purchase price: 85,000 USD (studio or one-bedroom, 45 sqm, new building). Monthly rent: 650 USD under a corporate lease where the employer covers rent. Annual gross income: 7,800 USD. Gross yield: 9.2%.

Annual operating costs:

• Building maintenance fee: 1,080 USD (2 USD per sqm per month)
• Property management fee: 780 USD (10% of rent)
• Vacancy allowance (one month per year): 650 USD
• Cambodian rental income tax (10% of net income): approx. 530 USD
• Insurance and minor repairs: 300 USD

Total costs: 3,340 USD. Net income: 4,460 USD. Net yield: 5.2%.

Investors based in higher-tax jurisdictions will need to account for their home-country tax obligations on foreign income, applying any applicable double-taxation treaty provisions to avoid being taxed twice on the same earnings.

Scenario B: Premium condo in Tonle Bassac, furnished short-term rental

Purchase price: 160,000 USD (two-bedroom, 80 sqm, pool, gym, sky bar). Short-term platform nightly rate: 70-90 USD, but realistic occupancy sits at 55-65% due to seasonality and growing competition. Average monthly income: approx. 1,400 USD. Annual gross: 16,800 USD. Gross yield: 10.5%.

Annual operating costs:

• Short-term management (cleaning, check-in, marketing): 4,200 USD (25% of revenue)
• Maintenance fee: 1,920 USD
• Taxes and tourism licensing: 1,700 USD
• Furniture and fixture depreciation: 1,500 USD

Total costs: 9,320 USD. Net income: 7,480 USD. Net yield: 4.7%.

The counterintuitive result: a more expensive unit generating higher gross revenue actually delivers a lower net yield than a cheaper studio on a straightforward long-term lease. Higher gross numbers do not automatically mean better returns.

Scenario C: Off-plan with developer-guaranteed rental return

Multiple Phnom Penh developers market units with 'guaranteed rental return' schemes of 6-8% gross for two to three years. Off-plan price: 70,000 USD. Guaranteed annual income: 4,900 USD (7%).

The structural issue: the guarantee is typically priced into the unit itself, with the off-plan purchase price inflated by 10-15% above comparable secondary market values. Once the guarantee period expires, actual market rents may fall short of the promised figure. In the worst case, if the developer encounters financial difficulties, enforcement through Cambodian courts is slow and expensive. Treat guaranteed return schemes as a marketing mechanism, not a contractual certainty.

Comparison table

Parameter	Phnom Penh mid-range	Phnom Penh premium	Bangkok mid-range	European savings account
Purchase price	85,000 USD	160,000 USD	120,000 USD	n/a
Gross yield	9.2%	10.5%	6.0%	3.5%
Net yield (pre home-tax)	5.2%	4.7%	4.0%	2.8% (after withholding)
Occupancy	90-95%	55-65%	85-90%	100%
Rental type	Long-term	Short-term	Mixed	n/a
Currency risk	USD/home currency	USD/home currency	USD/home currency	None
Exit liquidity	Low to medium	Medium	Medium to high	Full
Estimated annual appreciation	3-6%	2-4%	3-5%	0%

Risks and mistakes

1. Overestimating short-term occupancy. Brokers frequently quote 85-95% occupancy for short-term rentals. Actual figures in Phnom Penh, where leisure tourism is still recovering, run closer to 55-65%. The difference between 90% and 60% occupancy reduces income by approximately one third.

2. Relying on unsecured developer guarantees. Cambodian law does not provide investors with instruments equivalent to bank guarantees or registered security interests over the developer's assets. If the developer fails, a rental guarantee clause in a sales contract offers limited practical protection.

3. Currency conversion costs. Every bank transfer from a Cambodian account to an overseas account carries a fee of 25-50 USD plus a foreign exchange spread. On monthly rents of 600-800 USD, routine transfers can erode 0.5-1% of annual yield.

4. Illiquid secondary market. Selling a condominium in Phnom Penh on the secondary market typically takes 6-18 months. In the premium segment it can take longer. This is not comparable to liquid urban markets in Europe or even Bangkok. Investors must be comfortable with capital being locked in.

5. Title verification is non-negotiable. Strata title for individually owned units has existed in Cambodia since 2010, but not every building has properly registered individual titles. Independent verification by a qualified Cambodian lawyer costs 500-1,500 USD and is an essential pre-purchase step.

6. Regulatory changes are a real risk. Cambodia introduced a revised tax code in 2021. Future reforms could raise the property tax rate (currently 0.1% of value above 25,000 USD) or increase the rental income tax rate. Emerging markets carry regulatory uncertainty as a structural feature.

7. Off-plan price inflation. Units sold with guaranteed return packages are routinely priced 10-15% above equivalent secondary market units. Buyers are effectively pre-paying the guarantee out of their own purchase price.

FAQ

What is the realistic net rental yield in Phnom Penh in 2026?

For mid-range units in the 60,000-120,000 USD bracket on long-term leases, net yield (after local costs and taxes, before home-country tax) runs 5-7%. Premium units on short-term platforms typically deliver 4-5% net due to higher operating expenses.

Can a foreigner own a condominium in Cambodia?

Yes. Since 2010, foreign nationals can hold freehold strata title to condominium units from the first floor upward. Foreign ownership within any single building is capped at 70% of total floor area.

In what currency are rental transactions conducted in Phnom Penh?

In practice, US dollars. Cambodia is heavily dollarised. Lease agreements, rent payments, and building maintenance fees are all denominated in USD. The Cambodian riel (KHR) circulates primarily as small change.

Are developer rental guarantees a safe income source?

No guarantee of this kind is institutionally secured. Developers typically fund guaranteed payments from sales margins or from subsequent buyer deposits. Once the guarantee period ends, market rents may be lower than the promised figure. Treat any guarantee as a conditional marketing incentive rather than a reliable income commitment.

How much does property management cost in Phnom Penh?

Professional rental management operators charge 10-15% of gross rent for long-term leases and 20-25% for short-term arrangements. Services typically include tenant sourcing, lease administration, monthly property inspections, and maintenance coordination.

Which Phnom Penh districts offer the best rental yields?

BKK1 and Tonle Bassac generate the strongest demand from expats, international companies, and NGO staff. Toul Tom Poung offers lower entry prices with solid yield. Chroy Changvar is an emerging zone with greater appreciation potential but higher occupancy risk.

How long does it take to sell a Phnom Penh condo on the secondary market?

Expect 6-18 months for a standard secondary market sale. Liquidity is considerably lower than in Bangkok or major European cities. Off-plan assignment (selling before project completion) can be faster but requires developer approval and an assignment fee of 1-3% of the purchase price.

What are the total purchase costs beyond the property price?

Budget for a 4% transfer tax (frequently shared with the developer on new builds), legal fees of 500-1,500 USD, and title registration of approximately 100 USD. Total transaction costs typically amount to 4.5-6% of the purchase price.

How does Phnom Penh compare to Thailand as an investment destination?

Phnom Penh currently offers higher gross yields than Bangkok or Phuket, where gross returns run 5-7%. However, Thailand offers more mature legal infrastructure, greater market liquidity, and a significantly larger international tourism base. Cambodia compensates with higher yield potential and carries higher regulatory and liquidity risk.

What is the property tax rate in Cambodia?

An annual immovable property tax of 0.1% applies to property values above 25,000 USD. This rate is low by regional standards but is subject to legislative change, and investors should monitor Cambodian fiscal policy as part of ongoing portfolio management.

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