Real Rental Yield in Cambodia: A Genuine Calculation Using Time Square 5

TL;DR: The net rental yield on a 1BR unit (60 sqm) in Time Square 5, BKK1 (Phnom Penh) works out to approximately 7.9–8.5% per year after accounting for vacancy, property management, taxes, and service fees. Advertised "30% ROI" figures are cash-on-cash returns calculated on a partial down payment, with costs stripped out — not actual net yield.

Why "30% ROI" Claims Don't Hold Up

Nearly every developer or agent in Cambodia quotes rental returns of 20–30% per year. The mechanics behind this number:

  • The buyer puts down only 50% of the purchase price in an instalment plan
  • Gross rental income is divided by the invested half — not the full property value
  • Vacancy, management fees, taxes, and maintenance are excluded from the calculation

The result is a compelling headline that bears little resemblance to what actually lands in the owner's account.

Property Parameters: Time Square 5, 1BR, BKK1

This calculation uses real market data from a specific unit (current as of 2025–2026):

Parameter Value
Unit size 60 sqm
Purchase price $1,200/sqm = $72,000
Project completion December 2025
Rental range (listing) $700–$1,200/month
Base case $900/month
Owner profile Non-resident (under 183 days/year in Cambodia)

Transfer tax at purchase: - New build from developer: $72k falls in the $70–210k bracket → $70k deduction → 4% × $2,000 = $80 - Secondary market (resale): no relief → 4% × $72,000 = $2,880

Step-by-Step Net Yield Calculation

Base scenario: $900/month rent, non-resident owner.

Cost Item Annual Amount
Gross rental income +$10,800
Vacancy 15% (BKK1, high new supply) −$1,620
Property management 10% −$1,080
Building service charge (~$45/month) −$540
Rental income tax 14% (non-resident, on gross) −$1,512
Annual TOIP 0.1% × ($72k − $25k deduction) −$47
Maintenance & furniture reserve ~3% −$324
Net income ≈ $5,677
Net rental yield ≈ 7.9%

For a tax resident (10% rate): net ≈ $6,109 → ~8.5%.

Three Scenarios

Scenario Rent Vacancy Net Yield
Pessimistic $700/month 20% 5–6%
Base case $900/month 15% ~8%
Optimistic $1,200/month 10% 10–11%

Key Risks and What to Check Before Buying

Vacancy is the primary risk in BKK1. The district carries the highest volume of new residential supply in Phnom Penh. A 15–20% vacancy rate is a realistic assumption, not pessimism. Before committing, verify actual occupancy in comparable units in the same building — not the developer's projections.

Residency status matters. The difference between 10% (resident) and 14% (non-resident) rental tax works out to roughly $430/year on a single unit. Across a multi-unit portfolio, this adds up.

Capital Gains Tax (CGT). The 20% CGT on property sale proceeds has been officially deferred until 01.01.2027. If you're planning an exit, this is a critical date for net return calculations.

How to Calculate Total Return Honestly

The correct framework for Cambodia real estate investment:

Total return = Net rental yield + Capital appreciation

  • Net rental yield on Time Square 5: ~8%/year in the base case
  • Price appreciation: BKK1 has historically shown growth, but this is a separate risk factor, not a guaranteed component
  • CGT on sale: 0% until 2027, then 20% on the gain

The honest picture: ~8% net rent + potential capital appreciation is a competitive result for a frontier market — without the magic 30%.

FAQ

What is the realistic rental yield on Cambodia property? Based on independent assessments and actual unit-level calculations, net yields typically range from 6–10% per year. For prime locations like BKK1 in Phnom Penh, a realistic base case is around 8% net. Advertised 20–30% figures are cash-on-cash calculations on instalment plans with costs excluded.

What taxes do foreigners pay on rental income in Cambodia? Non-residents pay 14% tax on gross rental income. Residents (183+ days per year in Cambodia) pay 10%. Additionally, the annual TOIP property tax applies at 0.1% on value above $25,000. For new-build purchases, a deduction reduces the transfer tax base significantly.

When does Cambodia's Capital Gains Tax take effect? The 20% CGT on property sale gains has been deferred until January 1, 2027. Sales before this date are not subject to CGT. Post-2027, factor in 20% on profit when calculating final investment returns.

Is a 1BR in BKK1 a good rental investment in 2025–2026? The yield numbers are competitive (~8% net), but the primary risk is vacancy pressure from high new supply in the district. The essential due diligence step: verify real occupancy rates in the specific building, not developer-provided forecasts.