Phnom Penh Net Rental Income Scenarios

A yield percentage is only useful when the denominator is clear, so this page works with one real property profile rather than a fictional “average Phnom Penh condo.” The worked example is a completed, fully furnished two-bedroom unit of 65 sqm at J Tower 2 in BKK1. At the verification date, Realestate.com.kh showed 65 sqm units around $180,000 for sale and $1,200 per month for rent, while IPS had a 65 sqm rental at $1,100 per month marked rented in August 2026. Those figures are current market signals, not proof of the price a buyer will close at or the rent the next tenant will sign.

The purchase price is not automatically the capital base for a net-yield calculation. A buyer may also have non-refundable transfer, legal, banking, fit-out or pre-letting costs. If those amounts were genuinely paid to get the property into an income-producing state, leaving them out makes the percentage look better without creating any extra cash. An existing owner should use the actual closing and setup records. A new buyer should build the denominator from the specific unit price plus the documented costs needed before the property is ready to rent.

For the worked arithmetic below, the model capital is set at $187,200: the current $180,000 asking price plus a $7,200 scenario allowance for non-refundable acquisition and setup costs. The $7,200 is deliberately labelled as an editable assumption, not as a statement of tax due on this transaction. Cambodia has stamp-duty relief measures in force during 2026 for qualifying purchases, so the real transfer cost can differ materially with the buyer, seller, transaction history and eligibility. The selected listing is fully furnished, so the worked model does not add a separate furniture package; a buyer who needs replacement furniture, legal work or other setup should add those amounts to capital before reading the yield.

This keeps two questions separate. The first is annual cash left after the costs included in the owner model. The second is the percentage of the capital committed to the property. A rental can remain cash-positive and still produce a modest return on capital if the entry price is high. Conversely, a lower acquisition cost can improve the percentage without changing the tenant economics. The three scenarios therefore use the same 65 sqm property and the same $187,200 model capital, while changing only rent, paid months and selected operating costs. That makes the stress test about the assumptions rather than about three different apartments disguised as one comparison. A buyer who already owns the unit can go one step further: replace the model capital with the original closing statement and add only later capital improvements that genuinely increased the money committed to the property. Revaluing the condo upward because a seller now asks more does not create new invested capital, while using only the original headline price and ignoring later non-refundable setup costs understates it. Keeping that distinction visible makes year-to-year rental comparisons much cleaner.

G=R×M; N=G−(G×V÷100)−F−(G×T÷100)−P−Q−O; Y=N÷K×100%.

Listings are neat because they quote one monthly number. A bank account is not. A lease can start halfway through a month, a tenant can leave before the next one is ready, an owner may grant a free period, or the property may be kept for personal use. Annual rental cash therefore starts with the months actually paid, not with an automatic multiplication by twelve.

For this property profile, $1,200 per month is a current asking figure visible on the portal, while $1,100 is a recent lower reference for the same 65 sqm format in the same building. The page does not call $1,200 an achieved rent or $1,100 a market average. They are two public data points that make a useful stress test. A signed lease could land above, below or between them. Once an owner has an actual lease and payment history, those documents should replace both public inputs.

The effect is immediate. At $1,200 with twelve paid months, gross rent collected is $14,400 before owner costs. Ten paid months produce $12,000, a $2,400 reduction even though the headline monthly rent has not moved. If the signed rent is $1,100 and only ten months are paid, collected rent falls to $11,000. Compared with a perfect twelve-month calendar at $1,200, the gap is already $3,400 before building charges, tax, management or repairs enter the model.

The twelve-month row is a calendar ceiling, not an occupancy claim for J Tower 2 or Phnom Penh. An owner can receive all twelve payments, lose only a few days between tenants, or face a much longer gap. Public listing counts cannot establish the probability of any of those outcomes: duplicate advertisements, stale cards and availability dates do not translate into a defensible condo occupancy rate. Paid months are therefore an editable scenario input rather than a disguised market statistic.

Concessions can also reduce cash without changing the number printed at the top of a lease. Two free weeks, a rent-free month, a landlord-funded furniture item or an early-period discount all reduce the money collected over the contractual period. From an owner’s perspective, the clean comparison is the cash that actually came in, regardless of how the concession was described in negotiation. That makes different leases comparable on the same basis.

The three rows below are consequently defined by conditions, not labels such as optimistic, base and downside. The first uses the current asking rent for a full twelve paid months. The second keeps the same rent but removes two payments and adds one owner repair cost. The third lowers the rent to the recent $1,100 reference and keeps ten paid months. None is presented as a forecast. Their purpose is to show how quickly the same apartment changes when two apparently simple inputs stop being perfect.

All three rows use the same $187,200 model capital, a $1,404 annual building fee, self-management and a 10% rental-tax line only for an owner profile to which that regime actually applies. Scenarios two and three add a $500 one-off repair; unverified annual property tax, banking and contract-specific costs are not invented and must be entered from documents.

Owner costs do not all behave the same way, which is why a blanket assumption such as “take 15% off for expenses” is a poor substitute for the actual cash flow. Some costs continue while the condo is empty, some are calculated only when rent is collected, and others appear only at turnover or after a repair. One fixed line can be identified for this property profile: J Tower 2 publishes a building management fee of $1.80 per sqm per month. For 65 sqm that is $117 a month, or $1,404 over twelve months. Unless the lease separately passes that charge to the tenant, it belongs in the owner model and does not disappear because the unit was vacant for two months.

Third-party property management behaves differently. IPS publicly describes tenant sourcing, rent collection, lease administration, inspections, maintenance coordination and owner reporting, but it does not publish one universal percentage that can be applied to every managed condo. The calculator therefore leaves external management open. Zero is valid only when the scenario genuinely assumes self-management. If a manager is appointed, use the actual percentage or fixed charge from the current agreement and apply it to the correct base. A fee charged as a percentage of rent collected should not be calculated on twelve months and then vacancy deducted again.

Utilities also depend on the lease, not on a general rule. Electricity, water, internet and parking may be paid directly by the tenant, included in rent, or reimbursed through the owner. J Tower 2 listings publish separate utility and parking rates, but those tariffs only matter to owner cash flow when the owner is contractually responsible for them. A tenant-paid electricity bill is not an owner expense. An owner-funded internet package or parking space is. The model should follow the payment obligation in the lease instead of copying every charge shown on a building information page.

Tax needs its own line. Cambodia’s General Department of Taxation continues to list Tax on Property Rental and describes a 10% charge on gross rent under the relevant regime. The same official material also distinguishes cases involving self-assessment taxpayers and withholding, so the rule cannot be reduced to “every foreign owner loses 10%.” The 10% line used in the scenario table is therefore intentional but conditional: it illustrates a profile to which that rental-tax treatment applies. Before keeping the percentage, the owner’s status, the tenant’s tax status and the current treatment of the lease need to match the rule.

Annual property tax is separate again. It should not be estimated by simply multiplying a listing price by a convenient percentage because the official property-tax base follows its own valuation rules. No unit-specific 2026 assessment for the selected condo is available in the public listing data used here, so the calculator leaves that amount open. Insurance, bank charges and other mandatory owner payments follow the same principle. A blank input means the amount has not been established. Entering zero would make the stronger claim that the cost does not exist.

The $500 repair used in scenarios two and three is an editable stress assumption, not a Phnom Penh maintenance benchmark. A real year may contain no unusual repair, a damaged appliance, an air-conditioning issue, turnover cleaning or several separate invoices. A cash-flow model should deduct money actually spent by the owner in the period. A future replacement reserve can be shown as an additional conservative assumption, but it should not be disguised as a payment that has already happened.

A tenant deposit is also not rent when it is received. While it remains refundable under the lease, it is a liability to the tenant, not owner income. Loan principal is kept outside this property-level operating model as well, because the page is testing the asset before leverage. Separating fixed charges, rent-linked deductions, one-off costs and capital prevents two common distortions: deducting the same fee twice or making a genuine owner expense disappear from the model entirely.

Operating break-even answers a narrower question than investment return: how many paid months are needed before the selected annual costs stop making cash flow negative. If monthly rent is R, rent-linked deductions are a share v of collected rent, fixed annual costs are F, paid-month costs are M and one-off costs for the year are O, the conditional equation is: months × (R × (1 − v) − M) ≥ F + O. The expression only works when each expense sits in the right category. If a real management or tax agreement behaves differently, the equation should follow the document.

In the first worked case, R is $1,200, the conditional rental-tax share v is 10%, the fixed building charge F is $1,404, external management is zero because the scenario assumes self-management, and there is no other cost tied to each paid month. A paid month therefore contributes $1,080 before fixed costs. Dividing $1,404 by $1,080 gives 1.30, so the smallest whole number of paid months that produces non-negative cash under those included lines is two. Add a $500 one-off repair and the amount to cover becomes $1,904; $1,904 divided by $1,080 is 1.76, which still rounds up to two paid months.

That low threshold does not mean the condo “pays back in two months.” It only says that two $1,200 payments, under this deliberately limited cost set, exceed the annual building fee, the conditional tax on those receipts and the $500 repair. External management, unit-specific property tax, bank fees, insurance or other owner obligations can raise the threshold once they are known. More importantly, operating break-even says nothing about the quality of the return on $187,200 of model capital.

A simple mathematical hurdle makes the distinction clearer without turning it into an investment recommendation. A 5% net result on $187,200 is $9,360 a year. At $1,200 rent, a 10% tax line and a $1,404 building fee, reaching $9,360 requires roughly ten fully paid months when there is no one-off repair: ($9,360 + $1,404) ÷ $1,080 = 9.97. Add the $500 repair and the equation becomes 10.43 months, so the model needs eleven fully paid months to clear that chosen hurdle. Five percent is used only as an arithmetic benchmark; the page is not calling it a normal, target or acceptable Phnom Penh yield.

At $1,100 the sensitivity is more obvious. After the same conditional 10% deduction, each paid month contributes $990 before fixed costs. With the $1,404 building fee and the $500 repair, operating break-even still occurs in the second paid month, but the same 5% mathematical hurdle needs ($9,360 + $1,904) ÷ $990 = 11.38 months — effectively a full year of payments. A $100 change in signed rent combined with two unpaid months can therefore move the return on capital much more than the monthly headline suggests.

That is the purpose of the stress test. If a conclusion flips because of one empty month, a modest rent reduction or one repair, the model is relying heavily on perfect conditions. This is not a prediction that the unit will be vacant or that a repair will happen. It is a way to identify the inputs that actually control the outcome, then replace the scenario figures with the owner’s lease, management statement and invoices.