Short-Term or Long-Term? A Phnom Penh Rental Yield Guide

A furnished two-bedroom in Toul Tom Poung can advertise a gross yield near 11 percent on a short-stay platform, while the same unit on a twelve-month lease returns closer to 7. The three-point spread looks like a question of how much effort you are willing to put in. It is not. It is the difference between three separate businesses that happen to share an address.

Owners tend to treat short-term, mid-term, and long-term letting as three settings on one dial. It is more useful to treat them as distinct operating models, each with its own cost structure, labor load, tenant type, and risk. Gross yield tells you what a unit grosses. It does not tell you which business you have signed up to run, and the business is where the money is made or lost.

Short-term letting is hospitality, not property

A nightly or weekly listing is a small service company run out of a residential unit. The headline yield is real, but it arrives before a long list of costs that long-term owners never see. Furnishing and fit-out are a capital requirement, not an option, and they wear out on a hospitality cycle rather than a residential one. Cleaning, linen, restocking, and guest messaging run on every turnover, platform commissions come off the top, and professional short-stay management in Phnom Penh runs toward the higher end of the 10 to 30 percent range precisely because the operator is doing hotel work. Occupancy decides everything, and it is never the advertised number. A unit priced for 11 percent at full occupancy delivers materially less once void nights, seasonality, and the constant cost of finding the next guest are counted. The model can outperform, but as a business that is actively run, not an asset passively held.

The mid-term model sits in the gap

Between nightly churn and the annual lease is a segment most owners underuse: stays of roughly one to three months. The tenants are relocation cases, corporate assignments, project teams, medical stays, and buyers testing a district before they commit. They pay a premium over an annual lease because they need furnished space on flexible terms, but they commit in weeks rather than nights. That changes the math. Turnover costs fall sharply, because one tenant covers thirty to ninety nights instead of three, guest acquisition slows to a manageable pace, and management intensity drops toward the middle of the fee range. The unit still needs furnishing and still carries some void risk between tenants, but the operator is no longer running a front desk. For the right building in the right district, mid-term captures much of the short-stay premium while shedding a large share of its operational drag.

Long-term letting is the yield floor

The twelve-month lease is the least glamorous and the most predictable. Furnishing is lighter or absent, turnover is rare, and management sits near the bottom of the fee range, around 10 percent, because the operator collects rent and handles maintenance rather than servicing guests. The gross yield is the lowest of the three, and the net yield is the most stable. One cost is common to all three and easy to overlook when comparing headline numbers: rental income carries withholding of 10 percent for residents and 14 percent for non-residents, whichever model produces it. The model changes the operating costs. It does not change the tax base.

Where the yields actually converge

Stack the three net rather than gross and the spread compresses in a way the marketing rarely shows. Take the short-stay unit advertised at 9 to 11 percent. Subtract management at the high end, furnishing spread over its real life, utilities and service the owner absorbs, and the void nights that never make the brochure. What survives often lands within reach of the 6 to 7 percent a long-term BKK1 lease produces with almost none of the work. The gross yield sells the unit. The net yield runs the business, and they are not the same document. A higher gross is not a higher return. It is a higher revenue line attached to a heavier cost line and a heavier time commitment.

Match the model to the building and to yourself

The building decides more than the owner does. Executive-grade stock is built for long-stay and corporate tenants, which pushes it toward the mid-term and long-term models where those tenants live, and the numbers punish an owner who runs such a unit as a nightly rental. Then the owner decides the rest:

• Short-stay rewards presence and an appetite for operations.
• Long-term rewards patience and a preference for clean, low-touch cash flow.
• Mid-term rewards owners who want most of the premium without the front-desk life.
• A managed co-ownership structure, which historically carries rental income at the resident 10 percent rate and has returned around 8 percent gross, suits owners who would rather hold diversified district exposure than operate any single unit at all.

The opportunity in a Phnom Penh unit is rarely the gross yield on the listing. It is the match between the model, the building, and the person holding the keys. Choose the model before you buy and you spend far less time correcting the decision afterward. This is general guidance, not advice on your circumstances, and no return is ever certain. If you want help mapping a specific unit to the letting model it is actually built for, the investinphnompenh.com team is happy to run the numbers with you before you commit, with no pressure either way.