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Phnom Penh offers some of Southeast Asia's highest rental yields, with gross returns ranging from 5% to 8.5% across different property types as of September 2025. The Cambodian capital's rental market provides attractive investment opportunities, though actual net yields after ownership costs typically settle 1.5-2.5% lower than gross figures.
If you want to go deeper, you can check our pack of documents related to the real estate market in Cambodia, based on reliable facts and data, not opinions or rumors.
Phnom Penh's rental yields range from 3% to 8.5% gross depending on property type and location, with condos averaging 6.96% and shophouses often exceeding 8%.
Net yields typically fall 1.5-2.5% below gross yields after accounting for management fees, taxes, and maintenance costs, resulting in actual returns of 2-4% for most properties.
| Property Type | Gross Yield Range | Net Yield Range | Best Areas |
|---|---|---|---|
| Condos | 5.0% - 8.5% | 3.0% - 6.0% | Russian Market, Chroy Changvar |
| Villas | 3.0% - 5.0% | 1.5% - 3.0% | BKK1, Tonle Bassac |
| Shophouses | 6.0% - 8.0% | 4.0% - 6.0% | Russian Market, Toul Kork |
| Apartments | 6.0% - 8.0% | 2.0% - 4.0% | Chamkarmon, Chroy Changvar |
| Studios | 6.5% - 9.0% | 4.0% - 6.5% | Riverside, BKK1 |
What are the current average rental yields in Phnom Penh by property type?
Phnom Penh's rental yields vary significantly across property types, with condos leading the market at gross yields of 5% to 8.5%.
Condos represent the most popular investment choice, averaging 6.96% gross yield citywide. Modern condominium developments in areas like Russian Market and Chroy Changvar consistently achieve the higher end of this range, particularly for well-maintained units with desirable amenities.
Shophouses and older apartments deliver competitive yields of 6% to 8% gross, often matching or exceeding condo performance due to strong local tenant demand. These properties benefit from established neighborhoods and typically require lower purchase prices relative to their rental income potential.
Villas generate lower yields of 3% to 5% gross, reflecting their higher purchase prices and more limited rental market. Most villa investors focus primarily on capital appreciation rather than rental income, as the luxury rental market remains relatively small in Phnom Penh.
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How do yields vary depending on the area or neighborhood within Phnom Penh?
| Area | Typical Gross Yield | Primary Tenant Profile | Investment Notes |
|---|---|---|---|
| Russian Market | 6% - 8% | Expats, professionals | High demand, established area |
| BKK1 | 5% - 7% | Senior expats, diplomats | Premium location, lower yields |
| Toul Kork | 5% - 7% | Families, long-term expats | Stable rental market |
| Chroy Changvar | 6% - 8% | Middle-income locals, expats | Emerging area with growth potential |
| Near AEON Mall | 5% - 6% | Professionals, students | Commercial hub benefits |
| Riverside | 4% - 6% | Tourists, short-term renters | Tourism-dependent market |
| Tonle Bassac | 5% - 6.5% | Business executives, diplomats | Premium district, stable demand |
What is the average rental yield based on property size or surface area?
Property size significantly impacts rental yields in Phnom Penh, with smaller units generally achieving higher yields per dollar invested.
One-bedroom condos deliver approximately 6.6% gross yield, based on typical purchase prices around $100,000 and monthly rents of $550. These units represent the sweet spot for many investors, balancing strong demand with manageable investment amounts.
Two-bedroom properties achieve lower yields around 5.03% gross, with average purchase prices of $238,600 and monthly rents of $1,000. The higher purchase price relative to rental income reduces the yield percentage, though total rental income remains attractive.
Three-bedroom units can reach 6.77% gross yield, with purchase prices around $354,600 and monthly rents of $2,000. Larger units (4+ bedrooms) may achieve yields of 7.8% to 9.3%, but face narrower demand and higher vacancy risks.
Studios often achieve the highest yields when targeting short-term rentals or single professionals, though success depends heavily on location and management strategy.
How much does the total purchase price, including fees and taxes, affect the actual net rental yield?
Total investment costs in Phnom Penh typically exceed the property purchase price by 10-15%, significantly impacting actual yields.
The 4% transfer tax represents the largest additional cost, while legal fees, closing costs, and initial furnishing add another $5,000-$15,000 depending on property value. For a $60,000 condo, total investment including $3,000 closing costs and $5,000 furnishing reaches $68,000, reducing net yield by approximately 1-2 percentage points.
These additional costs mean a property showing 6% gross yield on purchase price may deliver only 4-5% when calculated against total investment. Investors should budget for these expenses from the outset to avoid yield disappointment.
Some developers offer furniture packages or payment plans that can reduce upfront cash requirements, though buyers should carefully evaluate whether such arrangements truly improve investment returns.
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What are the common costs of ownership that reduce gross yield to net yield?
Ownership costs in Phnom Penh typically reduce gross yields by 1.5-2.5 percentage points, bringing net yields to 2-4% for most properties.
Management fees represent the largest ongoing cost at 5-10% of annual rental income. Professional property management becomes essential for foreign investors, particularly those managing properties remotely or dealing with short-term rentals.
Property tax applies at 0.1% of property value annually for homes exceeding $25,000 in value. Rental income tax hits foreign investors at 14% of gross rental income, while Cambodian citizens pay 10%.
Maintenance reserves should account for 2-3% of rental income annually. Common area fees range from $0.30-$2 per square meter monthly, while utilities typically cost $50-$150 monthly depending on property size and tenant usage.
Additional costs include building insurance, occasional repairs, and marketing expenses for tenant turnover. Successful investors factor these costs into their initial yield calculations rather than treating them as unexpected expenses.
How does financing with a mortgage impact rental yields compared to buying with cash?
Mortgage financing significantly impacts rental yields in Phnom Penh due to Cambodia's high interest rates of 8-12% annually.
Cash purchases preserve the full rental yield while avoiding financing costs, making them the preferred strategy for most successful property investors. With gross yields averaging 6-7%, mortgage interest rates of 8-12% can eliminate cash flow entirely.
Banks typically offer 70-80% loan-to-value ratios, requiring substantial down payments. Monthly mortgage payments often exceed rental income, particularly after accounting for ownership costs and vacancy periods.
Leveraged investments only make sense in rapidly appreciating areas where capital gains can offset negative cash flow. Most successful Phnom Penh property investors use cash purchases or developer payment plans to maximize rental yields.
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What are the typical rental rates today for different property types and sizes?
| District | Studio | 1-Bedroom | 2-Bedroom | 3-Bedroom |
|---|---|---|---|---|
| BKK1 | $600-900 | $800-1,400 | $1,200-2,000 | $1,800-3,000 |
| Tonle Bassac | $500-800 | $700-1,200 | $1,000-1,800 | $1,500-2,500 |
| Chamkarmon | $400-700 | $600-1,000 | $800-1,400 | $1,200-2,000 |
| Chroy Changvar | $350-600 | $500-900 | $700-1,200 | $1,000-1,800 |
| Russian Market | $450-750 | $650-1,100 | $900-1,500 | $1,300-2,200 |
| Toul Kork | $350-600 | $500-900 | $700-1,200 | $1,000-1,700 |
What are the vacancy rates across different property categories and areas?
Vacancy rates in central Phnom Penh have increased due to new supply entering the market, with occupancy rates settling around 62-65% for many developments as of September 2025.
Prime central locations face higher vacancy risks due to oversupply, particularly in the luxury condo segment. New developments continue launching faster than absorption rates, creating competitive rental markets that favor tenants.
Emerging areas typically show lower vacancy rates but carry higher risks if oversupply develops. Areas like Chroy Changvar and outer Chamkarmon maintain steadier occupancy due to more balanced supply-demand dynamics.
Successful investors focus on buildings with proven track records and professional management to minimize vacancy periods. Properties offering competitive pricing and modern amenities tend to maintain higher occupancy rates regardless of location.
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Who are the typical renter profiles in Phnom Penh, and what do they look for in a property?
Phnom Penh's rental market serves diverse tenant profiles, each with specific preferences that smart investors should understand.
Expat professionals represent the primary market for quality condos and apartments, typically seeking modern amenities, reliable internet, and proximity to business districts. These tenants prefer BKK1, Tonle Bassac, and Russian Market areas, valuing security, building maintenance, and professional management.
NGO and embassy staff form a stable tenant base, often with housing allowances that support premium rents. They prioritize security features, backup power, and locations convenient to diplomatic areas.
Local middle-class families increasingly rent rather than buy, particularly in Toul Kork and Chroy Changvar. These tenants value practical layouts, good schools nearby, and reasonable pricing over luxury amenities.
Digital nomads and short-term visitors seek flexible lease terms, furnished units, and locations with cafes and coworking spaces. Riverside and central BKK1 properties serve this growing market effectively.
All tenant segments prioritize reliable WiFi, modern kitchenettes, and access to building amenities like gyms and pools when available.
What are the differences in rental yield potential between short-term and long-term rental strategies?
Short-term rentals can generate 1-2% higher yields than long-term leases in optimal Phnom Penh locations, though success requires careful location selection and active management.
Riverside, BKK1, and Tonle Bassac areas show the strongest short-term rental performance, benefiting from business travelers and tourists. Studios and one-bedroom units typically perform best for short-term strategies due to broader market appeal.
Long-term rentals offer more stable income with easier management requirements, making them suitable for investors seeking passive income. Tenant turnover costs remain lower, and seasonal fluctuations have minimal impact on annual yields.
Many condominiums restrict short-term rentals through building bylaws, limiting strategy options. Investors should verify rental policies before purchase to avoid strategy conflicts.
Management intensity differs significantly between strategies, with short-term rentals requiring constant attention while long-term leases allow for quarterly check-ins.
How have rental yields and rents changed compared to 5 years ago, and compared to 1 year ago?
Phnom Penh rental yields have declined from peak levels of 8-10% in 2019 to current averages of 6-7% in 2025, primarily due to increased supply and slower absorption rates.
Rental rates stabilized in 2025 following a significant 30% price decline between 2019-2024. This correction eliminated much of the speculative premium while establishing more sustainable market fundamentals.
Compared to one year ago, yields have remained relatively stable as both purchase prices and rental rates found equilibrium. New supply continues entering the market, but absorption has improved with returning business activity.
Vacancy rates remain elevated in the city core compared to pre-pandemic levels, though outer neighborhoods show more stable occupancy patterns. The market now favors tenants with increased choice and competitive pricing.
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What are the smartest investment choices today, and how do Phnom Penh rental yields compare to other major regional cities?
The smartest Phnom Penh property investments in 2025 focus on emerging areas with infrastructure development, mid-range condos with proven occupancy, and properties allowing flexible rental strategies.
Areas near the new airport and major infrastructure projects offer the best combination of current yields and future appreciation potential. Mid-range condominiums priced competitively show stronger occupancy than luxury developments.
Properties permitting short-term rentals in high-demand neighborhoods like Riverside and BKK1 can achieve premium yields for active investors. Buildings with professional management and modern amenities consistently outperform older developments.
Regionally, Phnom Penh's 6-8% gross yields significantly exceed Bangkok's 3-4%, Ho Chi Minh City's 4-6%, and most other Southeast Asian capitals. Cambodia offers one of the best yield-growth-risk combinations in Asia for property investors.
Forward-looking investors should consider that Phnom Penh's yields may gradually compress toward regional norms as the market matures, making current entry points particularly attractive for long-term investors.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Phnom Penh offers some of Southeast Asia's most attractive rental yields, with gross returns of 5-8.5% across different property types as of September 2025.
Success requires understanding local market dynamics, accounting for all ownership costs, and choosing the right property type and location for your investment strategy and management capabilities.
Sources
- Global Property Guide - Cambodia Price History
- Global Property Guide - Cambodia Rental Yields
- Dabest Properties - Cambodia Condo Trends
- IPS Cambodia - Phnom Penh Condo Market Trends 2025
- BambooRoutes - Phnom Penh Property
- InvestAsian - Cities Highest Rental Yields
- The Wandering Investor - Phnom Penh Real Estate Guide
- Cambodia Condo For Sale - Rental Yield Investment Potential
- RealEstate.com.kh - Cambodia Condominium Report
- LinkedIn - Why Phnom Penh's Rent 7th Highest Asia