Phnom Penh Rental Yield 2026: 7-9% Gross

A 45 sqm studio in the BKK1 district, purchased for USD 95,000. Monthly rent: USD 650. Annual gross income: USD 7,800. Gross yield: 8.2%. This is not a developer's projection - it is a typical scenario that repeats across hundreds of transactions in the Cambodian capital in 2026.

Phnom Penh remains one of the few Asian markets where a foreign investor can legally own a residential unit (from the second floor upward) and achieve rental returns two to three times higher than in Western European capitals. According to data from CBRE Cambodia and Knight Frank, average gross yields in the mid-range condominium segment range between 7% and 9% per year. For comparison, long-term rentals in major European cities currently generate around 3-5% gross, while bank deposits in most developed markets offer 3-4.5% before tax.

But gross is not net. Between the purchase price and real profit lies a chain of costs that every international investor must understand before transferring funds to an account in Phnom Penh.

Quick answer

Average gross yield in Phnom Penh (mid-range segment, 2026): 7-9% per year
Net yield after management costs, vacancies, and taxes: approximately 5.5-7%
Rental tax in Cambodia: 10% withholding tax for non-residents (legal entities); individuals are taxed under general rules with potentially lower effective rates
Property management fee: typically 8-12% of rental income
Occupancy rate in prime locations (BKK1, Tonle Bassac, Toul Tom Poung): 85-92%
Minimum entry point (studio or 1-bedroom off-plan): from approximately USD 60,000
Capital appreciation: estimated 3-6% per year in central districts (indicative data, 2022-2026)

Options and scenarios

Scenario A: Long-term rental in BKK1

BKK1 is Phnom Penh's most prestigious residential district - the equivalent of London's Kensington or Singapore's River Valley. Purchase prices for a 1-bedroom unit (40-55 sqm) range from USD 85,000 to USD 130,000. Long-term rental rates (annual lease): USD 550-800 per month. Primary tenants include NGO expatriates, embassy staff, and senior management from Japanese and Korean corporations.

Calculation breakdown (indicative figures, 2026):

Purchase price: USD 100,000
Annual gross rent: USD 700 x 12 = USD 8,400
Management fee (10%): -USD 840
Building maintenance and sinking fund: approx. -USD 600 per year
Vacancy allowance (1 month per year, approx. 8%): -USD 700
Estimated rental income tax: -USD 400
Annual net income: approx. USD 5,860
Net yield: 5.86%

This is nearly double what a standard bank deposit in most developed markets delivers after tax.

Scenario B: Short-term rental (Airbnb) in Tonle Bassac

Tonle Bassac attracts tourists and digital nomads. Nightly rates in high season (November to March): USD 35-55 for a studio. Off-season: USD 20-35. At 65-70% annual occupancy, gross annual income from a 1-bedroom can reach USD 10,000-12,000 - but costs rise sharply: cleaning, linen, higher wear and tear, and more intensive management (15-20% combined platform and manager commission).

Gross yield: up to 10-12%. Net yield after costs: 6-8%, but with significantly higher operational involvement and regulatory risk. Cambodia does not yet have strict short-term rental regulations, though the Ministry of Tourism began registering short-stay properties in 2025.

Scenario C: Off-plan purchase with rental guarantee

Cambodian developers commonly offer rental guarantees of 6-8% per year for 2-3 years. The mechanism: you purchase a unit off-plan for USD 70,000, and the developer commits to paying USD 420 per month (7.2% gross) for 24 months after completion.

Risks of rental guarantees:

The guarantee is built into the price - the unit typically costs 10-15% more than a comparable unit without the guarantee
The developer's solvency is not backed by any state guarantee scheme or regulatory authority
After the guarantee expires, market rents may be lower than the promised rate
In the event of developer insolvency, recovering funds is extremely difficult

For any investor accustomed to regulated property purchase frameworks, this represents a fundamental difference in risk exposure.

Comparison table

Parameter	Phnom Penh (BKK1)	Warsaw (prime)	Phuket (condo)	Bank deposit (USD)
1-bedroom price (USD)	85,000 - 130,000	120,000 - 180,000	100,000 - 160,000	n/a
Gross yield	7 - 9%	4.5 - 5.5%	5 - 7%	4 - 5%
Net yield (est.)	5.5 - 7%	3 - 4%	3.5 - 5%	3.2 - 4%
Occupancy rate	85 - 92%	95%+	60 - 75% (seasonal)	n/a
Management fee	8 - 12%	0 - 8%	10 - 30%	0%
Annual appreciation	3 - 6%	5 - 8%	4 - 8%	0%
Entry barrier	Low	Medium to high	Medium	Very low
Exit liquidity	Limited	High	Medium	Instant
Income currency	USD	Local currency	THB	USD
Double taxation risk	Yes (no DTT for many countries)	No	Partial (DTT available)	No

Risks and mistakes

1. Absence of double taxation treaties for many investors. Many countries do not have a bilateral tax treaty with Cambodia. Rental income earned in Phnom Penh is subject to Cambodian tax, and a tax resident elsewhere must declare it at home as well. The effective combined tax burden can be higher than in markets covered by double taxation agreements (DTTs). Investors should consult a tax advisor familiar with both jurisdictions before committing capital.

2. Currency risk is limited but not zero. Cambodia operates a de facto dollarised economy - over 80% of real estate transactions are conducted in USD. International investors therefore carry USD exposure against their home currency rather than risk in the Cambodian riel (KHR). USD exchange rate volatility over a 5-7 year horizon can meaningfully amplify or reduce real returns when repatriated.

3. Exit liquidity. Reselling a condominium in Phnom Penh typically takes 6-18 months. The secondary market is considerably thinner than in Bangkok or major European capitals. Off-plan units can be assigned before completion, but developers charge a transfer fee of 1-3%. Title transfer is processed through Cambodia's Ministry of Land Management, Urban Planning and Construction (MLMUPC), not through a notarial system.

4. Developer due diligence. Cambodia's property development sector does not have regulatory oversight comparable to mature markets. Before transferring any funds, investors must verify: the building permit, strata title status, the developer's financial track record, and obtain a legal opinion from a licensed member of the Bar Association of the Kingdom of Cambodia.

5. Hidden transaction costs. Transfer tax (4% of property value, payable at registration), legal fees (USD 500-1,500), international SWIFT transfer fees (USD 15-45), and currency conversion spread (0.5-1.5%). These line items combined can reduce the effective yield in year one by 3-5 percentage points.

6. Regulatory change risk. In 2026, the Cambodian government is working on a new real estate law that may modify the rules governing foreign ownership. Investors should monitor communications from the Council for the Development of Cambodia (CDC) and seek periodic legal updates.

FAQ

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

Indicative gross yield in the mid-range condominium segment is 7-9% per year. After deducting management fees, vacancy periods, maintenance charges, and taxes, net yield falls to approximately 5.5-7%. These figures apply to prime locations such as BKK1, Tonle Bassac, and Toul Tom Poung.

Can foreigners legally own property in Cambodia?

Yes. Foreign nationals may purchase units in multi-storey condominium buildings from the second floor upward, provided that foreign ownership does not exceed 70% of the total floor area of the building. Foreigners cannot purchase land or ground-floor units.

How is rental income taxed in Cambodia for foreign investors?

Rental income is subject to Cambodian tax at the point of source. Investors must also declare this income in their country of tax residence. Where no double taxation treaty exists between Cambodia and the investor's home country, there is a risk of full double taxation. The effective rate depends on the investor's individual circumstances and should be confirmed with a qualified tax advisor.

In which currency is rental income received in Phnom Penh?

Practically all rental income is received in US dollars (USD). Cambodia's economy is heavily dollarised - over 80% of real estate transactions and rental agreements are denominated in USD. The Cambodian riel (KHR) is used primarily for small cash transactions.

Are developer rental guarantees safe?

They are not guaranteed by any government body or insurance scheme. Their reliability depends entirely on the financial health of the developer. The guarantee (typically 6-8% for 2-3 years) is usually embedded in a higher purchase price. Once the guarantee period ends, actual market rents may be lower than the guaranteed figure. Independent legal and financial due diligence is essential before committing.

How long does it take to resell a condo in Phnom Penh?

On average, 6-18 months on the secondary market. The market is significantly less liquid than in Bangkok or major European cities. Off-plan units can be assigned before completion, but developers typically charge a transfer fee of 1-3% of the property value.

How does Phnom Penh rental yield compare to other markets?

Phnom Penh leads in gross yield (7-9%) and net yield (5.5-7%) compared to most European capitals (3-5% gross) and even Phuket (5-7% gross). The trade-off is lower exit liquidity and higher legal and regulatory risk. Phnom Penh suits investors prioritising current cash flow over capital liquidity.

Which districts of Phnom Penh offer the highest rental returns?

The highest gross yields (8-9%) are typically found in Toul Tom Poung (Russian Market area) and Tonle Bassac, where purchase prices are lower. BKK1 offers slightly lower yields (7-8%) but greater tenant stability, more consistent demand from expatriates, and stronger long-term capital appreciation prospects.

Do I need a Cambodian bank account to collect rental income?

It is not a legal requirement, but it significantly simplifies property management and income collection. Accounts at ABA Bank or ACLEDA Bank can typically be opened within 1-2 business days with a passport and proof of address. Accounts are operated in USD.

What are the total transaction costs when buying in Phnom Penh?

Investors should budget approximately 5-6% of the property value to cover transfer tax (4%), legal fees, international transfer fees, and currency conversion costs. These upfront costs reduce the effective yield in year one and must be factored into any investment model.

Ready to invest in Thailand or Cambodia property? Send us a request - our experts will find the best options for you.

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