Getting rental income from my rental property in Cambodia

August 14

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For new readers, I bought a SOHO property at The Bridge, Cambodia and I saved diligently each month in order to pay for the purchase.

After making my final payment for my SOHO apartment, I signed the tenancy lease agreement to officially allow the property developer manage the leasing of my apartment for the next 3 years. In the clause, included a free 3-month rental period for the property developer to renovate and secure a tenant for my apartment.

Last week, I finally received my first quarterly rental payment from the property developer. Woohoo!

Here's the breakdown of the charges involved in this rental property:

  • Withholding tax: US$161.03 (10% of my rental income for the quarter)
  • Sinking fund: US$180
  • Fixed admin fees: US$50
  • Remitting bank charges: US$18 (property developer's bank) + US$22.28 (my bank)
  • Total charges: US$431.31

After deducting the above charges, my quarterly rental works out to $1187.

That works out to around 4.42% rental yield for this property.

That's pretty average but given that my focus for this investment is on the potential capital appreciation, let's see what happens in the next few years.

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About the author 

Mickey J

Mickey is your typical white-collar Singaporean who works regular hours in a job with a strong passion on personal finance. He writes mostly about personal finance, investing, insurance and retirement planning. He also embraces the Financial Independence and Retire Early movement (FIRE), tweaking the FIRE concept to his lifestyle.

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  • Hi Mickey,

    Great to hear from your experience. I picked up a unit at the peak recently. I’ve asked the agent before but just want to clarify again how were you able to withdraw the money? Via TT and ATM is ok? Thanks!

    • Hi Edmund, I provided my DBS multi currency account to receive the rental income so I could easily withdraw the money in Singapore. However, I intend to set up a bank account in Cambodia to manage the money in future because their interest rates are much better.

  • Thanks for the advice. That’s odd I was told I’ve to head over to Cambodia to set up an account with one of the banks (Maybank being possibly one of them) for the rental income to be deposited. So I guess you face TT charges every quarter?

  • My agent for The Peak insisted the rental payment is nett, no tax. do you know why different from yours? and can i ask, progressive payment is better or full payment with some discount works better?

    thanks uoi

    • I’d advise to take a look at the contract to check the specific terms and conditions. For The Bridge, it’s definitely not nett 6% since there’s sinking funds, taxes, etc. to pay.

      You’ll need to calculate if the discount for full payment is high enough to be worth paying in full. I wasn’t given this option when I signed the sales agreement and I wouldn’t have the cash to pay in full anyway.

      I also feel that USD/SGD is at a high right now. Paying progressively allows you to change money when the rates are better.

  • the 3rd year rental for the Bridge is coming up next May 2021. Not sure if the developer will continue the rental for owners. Will you be planning to sell yours?

    • Hi Daphne,

      Thanks for asking. I think it’ll be interesting to see if the developer will renew the GRR agreement, given that we know that not 100% of the property was rented out. I know that quite a number of owners are also looking at talking to property agents in Cambodia to understand the process of renting their units through a property agent. It’ll be the alternative for most of us.

      One of the learnings I got from this investment is to always have an exit strategy. The disadvantage of overseas property investment is that the exit strategy is unclear and it’s not easy to liquidate the property. In the case of Cambodia, I don’t think there is sufficient demand for the property yet and I don’t know of anyone who has managed to sell their unit at a profit as of now.

      Personally, I’ll continue to hold on to it as a long term investment (hopefully I’ll be able to continue renting it out in the interim) because I bought this property with money I can afford to lose so I have strong holding power.

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