Rental Yield in Malaysia 2026: 5 Numbers to Check Before You Buy
Property Lab editorial teamPublished 11 min read
Key points
- As at October 2026, no official average rental yield for Malaysian homes was found from NAPIC or JPPH; gross yield is the annual rent divided by the purchase price.
- In an illustrative example, a RM510,000 Kuala Lumpur condo let at an assumed RM2,000 a month gives a 4.71% gross yield and a 3.05% net yield after holding costs.
- Landlords in Malaysia pay tax on net rent at resident rates of 0% to 30%, or 30% flat if non-resident; the letting agent fee scale is 1.25 months' rent up to 3 years.
Contents
- How to check rental yield before you buy: the 5 numbers
- Number 1: Gross yield, the yearly rent over the price
- Number 2: Net yield after holding costs and empty months
- Number 3: Monthly cash flow after the loan instalment
- Number 4: Rental income tax, stamp duty and the agent's fee
- Number 5: Price-to-rent ratio and break-even rent
- Worked example: a RM510,000 Kuala Lumpur condo
- Frequently Asked Questions
- References
Rental yield in Malaysia is the rent a property earns in a year as a share of its price. As at October 2026, there are 5 numbers to check before you buy: gross yield, net yield, monthly cash flow after the loan, tax and letting costs, and the price-to-rent ratio with its break-even rent. In our illustrative example, a RM510,000 Kuala Lumpur condo let at an assumed RM2,000 a month gives a gross yield of 4.71%, a net yield of 3.05% and a shortfall of about RM794 a month on a 90% loan.
Gross yield = yearly rent ÷ price. Net yield = (rent actually collected − yearly holding costs) ÷ price. Then check cash flow, tax and the price-to-rent ratio. No official average yield for Malaysian homes was found.
Key numbers (as at October 2026)
- KL condo median, Q2 2026RM510,000
- Example gross yield4.71%
- Example net yield3.05%
- Non-resident tax on rent30% flat
- Letting fee, up to 3 years1.25 months
- Tenancy duty, 1–3 yearsRM3 per RM250
Also called: hasil sewa kasar (gross rental yield); hasil sewa bersih (net rental yield); cukai pendapatan sewa (rental income tax); DSR (debt service ratio); price-to-rent ratio (price divided by one year's rent).
How to check rental yield before you buy: the 5 numbers
Use the real asking price and a rent checked for the same building.
- Divide rent by price: twelve months of rent over the purchase price gives the headline return.
- Take off the running costs: subtract maintenance, sinking fund, quit rent, assessment, insurance, repairs and empty months.
- Test the monthly gap: compare the rent you collect with the instalment plus monthly bills, and see if you must top up.
- Count tax and letting fees: estimate the tax on net rent, the agent's fee and who pays the tenancy stamp duty.
- Compare price with rent: see how many years of rent the price equals, and the rent you would need to break even.
Number 1: Gross yield, the yearly rent over the price
For a Malaysian property, gross rental yield is one full year of rent divided by the purchase price, before any costs: a RM510,000 condo let at RM2,000 a month earns RM24,000 a year, a gross yield of 4.71%.
Formula: gross yield = (monthly rent × 12) ÷ price × 100.
The price in our example is real. In NAPIC's Q2 2026 residential price table, the median Kuala Lumpur condominium or apartment sold for RM510,000, across 523 recorded sales.
The rent is not: RM2,000 a month is our assumption. We found no official average rent or yield for Malaysian homes as at October 2026; NAPIC's recent publications include rental indices for offices and shopping centres only. Private estimates use different methods, so we quote none as a benchmark. Check rents signed recently in the same building.
Short stays follow other rules. National guidelines were still being drafted on 26 October 2026, and strata units stay bound by JMB or MC by-laws (Bernama); in 2020 the Federal Court upheld a house rule banning them. See Is Airbnb Legal in Malaysia?
Number 2: Net yield after holding costs and empty months
Net rental yield in Malaysia is the rent you actually collect in a year minus the owner's yearly holding costs, divided by the price; in our example it falls to 3.05%, against 4.71% before costs.
Formula: net yield = (annual rent − lost rent while empty − yearly holding costs) ÷ price × 100. Example: (RM22,000 − RM6,470) ÷ RM510,000.
- Maintenance fee and sinking fund: the owner pays both, even with a tenant. Under section 25(4) of the Strata Management Act 2013, the sinking fund is 10% of the Charges unless a general meeting sets more. We assume RM350 plus RM35 a month, or RM4,620 a year.
- Quit rent and assessment: we assume RM100 and RM600 a year. See Quit Rent vs Assessment Tax.
- Insurance: under section 93 the management body insures the building, so owners add only their own cover; we assume RM150 a year.
- Repairs: we assume RM1,000 a year for wear and small fixes.
- Empty months: we assume one month a year without a tenant.
Holding costs total RM6,470 a year. With no empty month, net yield would be 3.44%. Loan interest belongs to the next number. See Maintenance Fee vs Sinking Fund.
Number 3: Monthly cash flow after the loan instalment
Monthly cash flow is the rent you collect each month minus the loan instalment and the monthly share of holding costs; on our RM510,000 condo with a 90% loan at an assumed 4.2% over 35 years, it is about −RM794 a month, or RM9,523 a year from the owner's pocket.
Formula: cash flow = (monthly rent × months let ÷ 12) − instalment − (yearly holding costs ÷ 12). Example: RM1,833 − RM2,088 − RM539.
- Loan: 90% of RM510,000 is RM459,000. At 4.2% over 35 years the instalment is RM2,087.76. The rate is our assumption.
- Rate test: at 3.7%, the gap narrows to RM656 a month; at 4.7%, it widens to RM935.
- Equity: of RM25,053 paid in year one, RM19,166 is interest and about RM5,887 repays principal.
- Margin: Bank Negara caps a borrower's third housing loan at 70% loan-to-value; our 90% assumes a first or second home.
Banks also check your debt service ratio (DSR), all monthly debt repayments divided by net monthly income; CIMB's DSR guide says most banks prefer below 60%. Ask whether the bank counts expected rent. If you might live there instead, see Rent vs Buy in Kuala Lumpur 2026.
Number 4: Rental income tax, stamp duty and the agent's fee
Landlords in Malaysia pay income tax on net rent after allowed expenses, at the resident scale of 0% to 30% or a flat 30% for non-residents, and letting a unit adds two more costs: stamp duty on the tenancy agreement and the agent's fee.
Tax. LHDN Public Ruling No. 12/2018 (paragraph 8.2) gives examples of deductible expenses: assessment and quit rent, interest on the purchase loan, fire insurance, the cost of collecting rent, spending to renew a tenancy or change tenant, and ordinary repairs. Costs of getting the first tenant, such as advertising, the agreement's legal fee, its stamp duty and the agent's commission, are not deductible (paragraph 8.3).
In our example, RM22,000 of rent less RM21,016 of those expenses (mostly the RM19,166 of interest) leaves RM984 taxable. For a resident with RM60,000 of other chargeable income, that adds about RM108 of tax, using the resident rates in PwC's Malaysia tax summary (reviewed 16 June 2026). A non-resident would pay 30%, about RM295. As interest falls, taxable rent rises. Maintenance charges are not among the ruling's examples, so we leave them out. See Rental Income Tax in Malaysia 2026.
Stamp duty. Item 49(a) of the Stamp Act charges duty on every RM250, or part of RM250, of yearly rent: RM1 for a tenancy of up to 1 year, RM3 for over 1 to 3 years, RM5 for over 3 to 5 years and RM7 above 5 years. A two-year tenancy at RM2,000 a month needs 96 × RM3 = RM288. LHDN's stamp duty guideline says the tenant pays on the main agreement and the landlord pays on the copy. See Stamp Duty on Tenancy Agreements.
Agent's fee. The LPEPH scale of fees (the board that registers estate agents) sets a maximum of 1.25 months' gross rent for a tenancy of up to 3 years (minimum one month); the scale excludes serviced apartments. On RM2,000 a month that is up to RM2,500, plus service tax if the agency charges it. Spread over a two-year tenancy, it cuts our net yield from 3.05% to about 2.80%. See Property Agent Fee in Malaysia 2026.
Number 5: Price-to-rent ratio and break-even rent
The price-to-rent ratio is the purchase price divided by one year's rent, so a RM510,000 condo let for RM24,000 a year has a ratio of 21.25: the price equals about 21 years of rent before costs.
Formula: price-to-rent ratio = price ÷ (monthly rent × 12). It equals 100 divided by the gross yield, so a higher ratio means a lower yield.
The break-even rent is the monthly rent that brings cash flow to zero. Formula: break-even rent = (instalment + monthly holding costs) ÷ (months let ÷ 12). In our example, RM2,627 of monthly outgoings ÷ (11 ÷ 12) gives RM2,866 a month, or RM2,627 if the unit is never empty.
If similar units rent for far less than the break-even rent, you are relying on price growth, which no one can promise. To check sale prices, see How to Check Property Value in Malaysia.
Worked example: a RM510,000 Kuala Lumpur condo
Only the price is sourced (NAPIC, Q2 2026); every other input is our assumption, computed in Python.
| Input | Value | Basis |
|---|---|---|
| Price | RM510,000 | NAPIC median |
| Rent | RM2,000/mo | Assumed |
| Empty months | 1 a year | Our estimate |
| Maintenance + 10% | RM385/mo | Assumed fee |
| Assessment, quit rent | RM700/yr | Illustrative |
| Insurance, repairs | RM1,150/yr | Assumed |
| Loan | 90%, 4.2%, 35 yrs | Not an offer |
| Number | Calculation | Result |
|---|---|---|
| 1. Gross yield | 24,000 ÷ 510,000 | 4.71% |
| 2. Net yield | 15,530 ÷ 510,000 | 3.05% |
| 3. Cash flow | 1,833 − 2,088 − 539 | −RM794/mo |
| 4. Tax, resident | Extra on RM984 | RM108/yr |
| 4. Tax, non-resident | 30% of RM984 | RM295/yr |
| 5. Price-to-rent | 510,000 ÷ 24,000 | 21.25 |
| 5. Break-even rent | 2,627 ÷ (11/12) | RM2,866/mo |
Illustrative, in RM, year one. NAPIC's figure comes from Form 14A transfers sent by LHDN to JPPH, covering new and subsale units. Resident tax assumes RM60,000 of other chargeable income, first-year interest and the RM150 insurance as fire insurance. Agent's fee and tenancy stamp duty are excluded. Not a forecast of rents, prices or returns.
In this example the rent covers the building's running costs but not the loan: the owner still adds about RM794 a month. A larger deposit, a lower rate or a higher signed rent would change that, so test each before paying a booking fee.
Frequently Asked Questions
What is a good rental yield in Malaysia?
There is no official benchmark to measure against. We found no NAPIC, JPPH or DOSM average yield for homes as at October 2026, and private estimates disagree, so compare a unit with similar units nearby and with your own loan cost.
How do I calculate net rental yield?
Start with the rent you expect to collect in a year, after any empty months. Subtract the maintenance fee, sinking fund, quit rent, assessment, insurance and repairs, then divide what is left by the price and multiply by 100.
What is the difference between gross and net rental yield?
Gross uses the full rent; net removes running costs and lost rent between tenants, so it is lower.
Is rental income taxable in Malaysia?
Yes. Residents add net rent to their other income and pay the normal scale of up to 30%, while non-resident individuals pay 30% of their taxable income, rent included.
Is the maintenance fee tax deductible for landlords?
LHDN's ruling on letting income does not list it among its examples of deductible expenses, so ask a tax agent before claiming it.
How much does an agent charge to find a tenant in Malaysia?
Under the Board's scale, up to one and a quarter months' rent for a tenancy of three years or less, and at least one month's rent. Service tax may be added.
Who pays stamp duty on a tenancy agreement in Malaysia?
By law the tenant pays on the main agreement, and the landlord pays on the duplicate copy, according to LHDN's guideline on the Stamp Act.
What does the price-to-rent ratio tell me?
It shows how many years of gross rent would add up to the price. A ratio of 25 means a 4% gross yield; a ratio of 20 means 5%.
References
- NAPIC: Residential Prices Quarterly Update, Q2 2026 (Excel, published 25 September 2026)Used for the Kuala Lumpur condominium/apartment median (RM510,000), mean and sample size.
- NAPIC: latest publications list (read 29 October 2026)Used to check which rental indices NAPIC publishes (purpose-built offices and shopping centres).
- LHDN: Public Ruling No. 12/2018, Income from Letting of Real Property (19 December 2018; copy hosted by CCS & Co)Used for deductible expenses (paragraph 8.2) and non-deductible first-tenant costs (paragraph 8.3).
- PwC Worldwide Tax Summaries: Malaysia, taxes on personal income (reviewed 16 June 2026)Used for the resident tax scale and the flat 30% for non-resident individuals.
- LHDN: Garis Panduan Pengenaan Duti Setem, First Schedule, Stamp Act 1949Used for the Item 49(a) tenancy rates and who pays (Third Schedule item 8).
- LPEPH: Scale of feesUsed for the letting fee scale, the one-month minimum and the serviced apartment exclusion.
- Strata Management Act 2013, section 25 (LawPlayer)Used for the 10% sinking fund rule.
- Strata Management Act 2013, section 93 (LawPlayer)Used for the management body's duty to insure the building.
- Bank Negara Malaysia: Measures in promoting a stable and sustainable property market (3 November 2010)Used for the 70% loan-to-value cap on a third housing loan.
- CIMB: Understanding DSR (debt service ratio) in MalaysiaUsed for the DSR formula and the 60% preference.
- Bernama: short-term rental accommodation guidelines (26 October 2026)Used for the status of national short-term rental rules and strata by-laws.
- Skrine: Federal Court, management body can stop short-term rentals (23 October 2020)Used for the Federal Court decision on house rules.
Tax rates, stamp duty and fee scales change, so check the latest wording with LHDN, Bank Negara, the LPEPH board and your management office before you rely on a figure.
General information only, not investment, tax, legal or financial advice. The worked example uses an assumed rent and assumed costs; it does not predict rents, prices or returns, and no return is promised. Check the real rent, fees and loan offer for the unit you plan to buy, and speak to a licensed adviser or tax agent if you need advice.
Sources
- Residential Prices Quarterly Update Q2 2026 — NAPIC (JPPH)
- Public Ruling No. 12/2018: Income from Letting of Real Property — Lembaga Hasil Dalam Negeri Malaysia (LHDN)
- Garis Panduan Pengenaan Duti Setem, First Schedule, Stamp Act 1949 — Lembaga Hasil Dalam Negeri Malaysia (LHDN)
- Scale of Fees — Board of Valuers, Appraisers, Estate Agents and Property Managers (LPEPH)
- Malaysia: Individual - Taxes on personal income — PwC Worldwide Tax Summaries
- Measures in promoting a stable and sustainable property market — Bank Negara Malaysia
General information only, not legal, tax or investment advice. Rules and rates change; check the official source linked below before you act.
Related news
MBSB Backs Sunway REIT For 2027 Despite 3Q26 Profit Dip
IOIPG Malaysia REIT IPO Offers 12.5% Upside At RM1.08 Fair Value Ahead Of Nov 25 Listing
Hektar REIT Cancels EGM For Proposed International School Acquisition
YNH Says Resolving Funding Priorities, After MARC Places RM170 Million Sukuk Rating Under Negative Watch
Related guides
Property Agent Fee in Malaysia 2026: How Much Commission Is Normal?
Renting in Malaysia as an Expat 2026: 8 Things to Know First
Is Airbnb Legal in Malaysia? Short-Term Rental Rules 2026
Property Viewing Checklist Malaysia: 10 Things Buyers Miss
9 Checks When Choosing a Condo in KL: MRT Access, Management and Flood Risk