How do you calculate rental yield in Malaysia?
Gross rental yield = (Annual Rent ÷ Property Price) × 100. Net yield deducts annual expenses first. True yield adds renovation, furnishing, vacancy loss, and transaction costs to the denominator. Most landlords who think their yield is "fine" have only calculated the gross figure.
Gross yield is the starting point, not the answer. A unit with RM2,400/month rent on a RM600,000 property shows 4.8% gross yield — but after management fees, maintenance, one month's vacancy, and quit rent, the net yield may be 3.2% or lower. If you spent RM30,000 on renovation and furnishing before tenanting, the true yield on your actual cash deployed is lower still.
Use this page alongside the SPEEDHOME true-yield calculator to work out all three numbers for your property.
The calculator
Use the SPEEDHOME Rental Yield Calculator to enter your monthly rent, purchase price, renovation cost, furnishing spend, vacancy months per year, and annual running costs. The tool outputs gross yield, net yield, and true yield side by side so you can see exactly where returns go.
Worked example: gross, net, and true yield
Take a 2-bedroom condo in Kuala Lumpur purchased for RM520,000 at RM2,200/month. Add real-world costs and the yield picture changes significantly from the headline figure.
| Item | Amount | Notes |
|---|---|---|
| Purchase price | RM520,000 | Property cost only |
| Renovation | RM18,000 | Paint, flooring, fixtures |
| Furnishing | RM12,000 | Bed, sofa, appliances |
| Agent commission (first tenant) | RM2,200 | Not deductible for tax — initial expense |
| Stamp duty on purchase | — | Separate cost; not deductible against rent |
| Total cost base (true yield denominator) | RM552,200 | |
| Monthly rent | RM2,200 | |
| Annual gross rent | RM26,400 | RM2,200 × 12 |
| Vacancy (1 month/year) | −RM2,200 | One month between tenants |
| Effective annual rent | RM24,200 | |
| Annual running costs | ||
| — Assessment + quit rent | RM900 | Deductible: verified LHDN PR 12/2018 |
| — Fire insurance | RM400 | Deductible |
| — Maintenance / minor repairs | RM1,200 | Deductible if to maintain existing state |
| — Management fee (if any) | RM0 | Deductible if self-managed by landlord for rent collection |
| Total deductible costs | RM2,500 | |
| Net income after costs | RM21,700 | RM24,200 − RM2,500 |
| Yield type | Formula | Result |
|---|---|---|
| Gross yield | (RM26,400 ÷ RM520,000) × 100 | 5.08% |
| Net yield (purchase price only) | (RM21,700 ÷ RM520,000) × 100 | 4.17% |
| True yield (full cost base) | (RM21,700 ÷ RM552,200) × 100 | 3.93% |
The gap between gross yield (5.08%) and true yield (3.93%) is over one percentage point — entirely from real costs every landlord faces. Ignoring renovation and furnishing in the denominator makes your property look better than it earns.
How each yield type is calculated
Gross yield measures rent against purchase price. Net yield deducts running costs. True yield adds renovation, furnishing, and vacancy loss to give the return on every ringgit you actually invested.
Gross rental yield
Gross Yield (%) = (Annual Gross Rent ÷ Purchase Price) × 100
Use this for a fast comparison between properties. Do not make final investment decisions from gross yield alone.
Net rental yield
Net Yield (%) = ((Annual Effective Rent − Annual Running Costs) ÷ Purchase Price) × 100
Annual Effective Rent = Monthly Rent × (12 − Vacancy Months)
Annual Running Costs include assessment, quit rent, fire insurance, loan interest (if any), and deductible maintenance. They do not include renovation or first-tenant agent commission — those are capital or initial expenses, not deductible against rent under LHDN Public Ruling 12/2018.
True yield (the SPEEDHOME model)
``` True Yield (%) = (Net Income ÷ Total Cash Deployed) × 100
Total Cash Deployed = Purchase Price + Renovation Cost + Furnishing Cost + Transaction Costs Net Income = (Annual Rent × Occupancy Rate) − Annual Running Costs Occupancy Rate = (12 − Vacancy Months) ÷ 12 ```
This is the only formula that tells you what you actually earned on the money you actually spent.
Malaysia rental yield benchmarks (2026)
Malaysia's gross residential rental yield averaged about 5.3% nationally in early 2026 (Kuala Lumpur approximately 4.9%, Johor Bahru approximately 5.3%, George Town approximately 3.7%), per Global Property Guide using PropertyGuru listing data. For comparison, the EPF dividend for 2025 was 6.15%, so a typical gross yield sits below EPF before costs — and net yield after maintenance, vacancy, and repairs is materially lower still.
| City / market | Gross yield (early 2026) | Source |
|---|---|---|
| Malaysia national average | ~5.3% | Global Property Guide (PropertyGuru data) |
| Kuala Lumpur | ~4.9% | Global Property Guide (PropertyGuru data) |
| Johor Bahru | ~5.3% | Global Property Guide (PropertyGuru data) |
| George Town, Penang | ~3.7% | Global Property Guide (PropertyGuru data) |
| EPF dividend (YA 2025, for comparison) | 6.15% | EPF/KWSP |
These are gross yields from listing data — they do not deduct vacancy, renovation, furnishing, or running costs. Net yields are materially lower. The EPF figure is the declared 2025 dividend; EPF announces rates annually and they change each year.
Tax impact on your true yield
Tax reduces your effective net return. Resident landlords pay income tax on net rental income at their marginal rate under Section 4(d). Non-resident individual landlords pay a flat 30% on net rental income with effect from Year of Assessment 2020 — no personal reliefs, no graduated bands, but deductible expenses still apply before the rate is applied.
What reduces your taxable rental income
Under LHDN Public Ruling 12/2018, allowable deductions for Section 4(d) rental income include:
| Expense | Deductible? | Notes |
|---|---|---|
| Assessment + quit rent | Yes | Annual charges |
| Fire insurance premium | Yes | On the rented property |
| Loan interest | Yes | On the loan used to buy the property |
| Repairs (maintenance, not improvement) | Yes | To maintain the property in its existing state |
| Agent commission — renewal or replacement tenant | Yes | Not the first-tenant commission |
| Agent commission — first tenant | No | Initial expense: creates the income source |
| Renovation cost | No | Capital in nature: goes in the true-yield denominator, not a tax deduction |
| Furnishing cost | No | Capital; not deductible under Section 4(d) |
| Mortgage principal repayment | No | Capital repayment, never deductible |
Renovation cost is one of the most common points of confusion: it is a real cost that should appear in your true-yield denominator, but it is not a tax deduction against rental income. These are different calculations and both matter.
Non-resident landlords: the 30% flat rate
A non-resident individual landlord is taxed at 30% on net Malaysian rental income (after allowable deductions). Non-residents get no personal reliefs, rebates, or access to the graduated resident rates. If you are a Malaysian citizen living abroad, confirm your tax residency status with a licensed tax agent before filing.
There is no special income-tax relief for being a landlord. Allowable deductions under PR 12/2018 reduce the income; ordinary personal reliefs for residents apply to total income in the normal way. Non-residents get no personal reliefs at all.
The SPEEDHOME angle: why managed landlords track yield differently
Untracked costs are invisible yield destroyers. A maintenance job paid in cash with no receipt fails as a tax deduction — and the true cost of that repair never appears in your yield calculation.
Three practical differences between landlords who track true yield and those who do not:
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Vacancy is the biggest yield killer. One month without a tenant on a RM2,200 unit costs RM2,200 — more than most landlords spend on maintenance in a year. Managed properties that reduce average vacancy by even half a month recover the management cost many times over.
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Furnishing raises yield — when it is right. A fully furnished unit at a higher rent may produce a higher true yield than an unfurnished unit at a lower rent, even after accounting for the furnishing cost in the denominator. The SPEEDHOME SPEEDRENO furnishing service exists for this: durable, rental-grade fittings that raise rent without inflating maintenance cost. See the rental income strategy guide for the full furnishing-vs-yield framework.
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Receipt-less repairs destroy deductibility. Every cash payment to a handyman without an official receipt is a deduction that will not survive scrutiny. See what happens when your handyman has no receipt for the tax risk and how SPEEDHOME's managed records solve it.
For landlords who want the yield calculation done at the property level — with maintenance records, vacancy tracking, and deductible expense logs — the SPEEDHOME managed landlord service keeps your yield calculation honest from the first tenancy.
Frequently asked questions
What is a good rental yield in Malaysia in 2026?
Malaysia's gross residential rental yield averaged about 5.3% nationally in early 2026 (Global Property Guide, PropertyGuru data). Net yield — after vacancy, costs, and renovation — is materially lower. A property with true net yield above 4% after all costs is generally considered reasonable in the current market.
What is the difference between gross and net rental yield?
Gross yield divides annual rent by purchase price. Net yield deducts annual running costs (assessment, insurance, maintenance, loan interest) from rent first. True yield also adds renovation, furnishing, and transaction costs to the denominator — it is the return on every ringgit you actually deployed.
How does renovation cost affect my rental yield?
Renovation cost goes into the true-yield denominator, not the deduction column. A RM20,000 renovation on a RM500,000 property adds 4% to your cost base, reducing true yield before any other change. It is a capital cost — not deductible against rental income for tax.
Does rental income tax reduce my effective yield?
Yes. For resident landlords, net rental income is added to total income and taxed at the marginal rate. For non-resident individual landlords, a flat 30% applies on net rental income after allowable deductions. On a 4.5% net yield, a 30% non-resident tax reduces the after-tax yield to approximately 3.15%.
Why is my yield lower than I thought?
Most landlords calculate gross yield using full-year rent and purchase price only. True yield falls once you include vacancy months, renovation and furnishing in the denominator, and running costs as deductions. A 5% gross yield property can return 3.5–4% true net once all costs are counted.
Is my rental yield better than EPF?
The EPF dividend for 2025 was 6.15%. Malaysia's gross residential yield averaged about 5.3% nationally in early 2026 — below EPF before costs. Net yield is typically 1.5–2 points lower than gross. Whether property outperforms EPF depends on your costs, leverage, and capital appreciation — not a general rule.
Verify the current EPF declared dividend rate each year before making any comparison — it changes annually.