Phnom Penh ROI Calculator: Real Returns on Condo Investment 2024

Why ROI in Phnom Penh Must Be Calculated 'Cold,' Not from Sales Presentations

The apartment and condo market in Phnom Penh is one of the most poorly analyzed markets in Southeast Asia. The reason is simple: too many projects are sold on the narrative of "high ROI," while very few investors calculate the actual net returns after costs, vacancies, and time.

Phnom Penh isn't a tourist market like Phuket or a lifestyle destination like Bali. It's a functional, long-term market driven by administration, NGOs, corporations, banking, and international operational companies. If you calculate ROI as you would in a resort market, your results will always be inflated.

Phnom Penh in 30 Seconds: The Most Important ROI Fact

The most important fact is this:

Stable ROI in Phnom Penh comes from long-term rentals, not from maximum monthly rates.

How ROI in Phnom Penh Differs from Thailand and Tourist Markets

In Phnom Penh:

there's no tourist seasonality in the traditional sense,
demand is more stable but less price-elastic,
tenants negotiate lease terms and cost packages,
vacancies result from location and standard, not from "lack of tourists."

This means that ROI is rarely spectacular on a gross basis, but when properly calculated, it can be predictable on a net basis.

ROI Calculation Model – Base Assumptions (Without Marketing Spin)

The model we use in Varsovia Estate analyses consists of five elements:

purchase price + entry costs (CAPEX),
realistic market rent,
average occupancy (including vacancies),
fixed and variable costs (OPEX),
risk and depreciation reserve.

We don't calculate ROI "based on the best month."

Sample Property – Starting Point for Calculations

Type: 1-bedroom condo

Location: Tonle Bassac / Chamkarmon

Size: 55 sqm

Purchase price: $140,000 USD

Price per sqm: ~$2,550 USD

This is a typical investment segment in Phnom Penh – neither premium nor budget.

Entry Costs (CAPEX) – Numbers You Need to Know

When purchasing a condo in Phnom Penh:

transfer tax: 4% of value → $5,600 USD,
legal and registration costs: $800–$1,500 USD,
furnishing for rental: $8,000–$12,000 USD (realistic standard),

Total initial capital:

≈ $155,000–$160,000 USD

This is the base for calculating ROI, not the listing price.

Income – Real Market Rent, Not 'Asking Price'

For a 1-bedroom in a good location:

monthly rent: $650–$900 USD,
realistic market average: $750 USD,
lease terms: 6–12 months.

Gross annual income:

≈ $9,000 USD

Occupancy and Vacancies – The Most Overlooked Element

In Phnom Penh, you must account for:

on average 1–1.5 months of vacancy per year,
time for renegotiations and tenant relocations.

Effective annual income:

≈ $7,900–$8,300 USD

Fixed Costs (OPEX) – Hard Numbers

Typical annual costs:

maintenance fee: $1.5–$2.2 USD / sqm / month
→ $1,000–$1,400 USD / year,
rental management: 8–10% of rent
→ $650–$800 USD,
minor repairs and service: $400–$600 USD,
depreciation reserve: $300–$500 USD.

Annual OPEX:

≈ $2,400–$3,200 USD

Net Result – The Moment of Truth

Net income after vacancies: ~$8,100 USD

Minus OPEX: ~$2,800 USD

Net income:

≈ $5,300 USD annually

Net ROI – Calculated Correctly

Total capital: ~$158,000 USD

Net income: ~$5,300 USD

Net ROI:

≈ 3.3–3.6%

This is a realistic, honest result for a stable, functional project in Phnom Penh.

Why Phnom Penh Still Makes Sense Despite Lower ROI

Because:

no capital gains tax on long-term holds,
lower maintenance costs vs Thailand,
stable institutional demand,
undervalued market in narrative terms.

ROI in Phnom Penh isn't aggressive, but it's predictable.

The Most Common Myth About ROI in Phnom Penh

"You can achieve 7–8% without risk."

No. Such numbers require:

purchasing below market value,
an excellent location,
low CAPEX,
self-management.

Otherwise, it's marketing projection.

3 Facts You Must Know About ROI

Gross ROI doesn't matter – net ROI does.
Vacancy is a cost, not an exception.
The best investments are "boring."

Investor Checklist: Phnom Penh ROI (5 Points)

Is the ROI calculated after all costs?
Are vacancies included?
Is the rent market-rate, not asking price?
Will maintenance fees increase over time?
Will the project hold value with tenant turnover?

Summary: ROI Is a Process, Not a Percentage

In Phnom Penh, investors who understand operations win, not those chasing the highest number in Excel. This is a market for those who want to control risk, not maximize narrative.