Rental yield in Malaysia 2026: gross vs net vs true yield
Rental yield is annual rent divided by property value, expressed as a percentage. Gross yield is the headline number; net yield strips out running costs; and true yield is the only figure that matters for a real decision because it also deducts renovation, furnishing, vacancy and the transaction costs of buying. Use the calculator below, then read the worked example to see why two properties with the same gross yield can leave you with very different money in hand.
The calculator
This page runs SPEEDHOME's true-yield model — the only Malaysian landlord calculator that puts renovation, furnishing, vacancy and operating costs into the same denominator so you see the return on the total cash you actually put in.
True rental yield calculator
Gross yield: enter your numbers above.
Worked example: two units with the same gross yield
The point of this table is to show why gross yield is a marketing number, not a decision number. Two apartments can both show a gross yield around the national average and yet produce very different true returns once renovation, vacancy and running costs are accounted for.
| Input | Unit A — basic unit | Unit B — fully furnished |
|---|---|---|
| Purchase price | RM450,000 | RM450,000 |
| Renovation cost | RM10,000 | RM35,000 |
| Furnishing cost | RM5,000 | RM30,000 |
| Monthly rent | RM1,800 | RM2,200 |
| Vacancy (months/yr) | 2 | 1 |
| Annual operating costs | RM3,600 | RM4,200 |
| Gross yield | 4.80% | 5.87% |
| Annual rent collected (after vacancy) | RM18,000 | RM24,200 |
| Net income (after operating costs) | RM14,400 | RM20,000 |
| Net yield (on purchase price) | 3.20% | 4.44% |
| Total cash invested (price + reno + furnishing) | RM465,000 | RM515,000 |
| True yield (net income ÷ total invested) | 3.10% | 3.88% |
Unit B's headline gross yield looks nearly a full point higher, but once you add the furnishing spend to the denominator and the running costs to the numerator, the true-yield gap narrows to about 0.8 points. Whether that gap is worth it depends on how long you hold the unit and how often you have to refresh the furniture — the same reason a managed-landlord path that keeps vacancy low often beats chasing a higher headline rent.
How it's calculated
Gross yield = (monthly rent × 12) ÷ purchase price × 100. It is the only formula that ignores costs, which is why agents and listings quote it. Net yield deducts vacancy and operating costs from the rent and keeps purchase price as the base. True yield goes further: it adds renovation and furnishing to the denominator, because that money is gone from your pocket whether or not the tenant pays rent.
The full true-yield formula this tool runs is:
True yield % = ((Monthly rent × occupied months) − annual operating costs)
──────────────────────────────────────────────────────────── × 100
(Purchase price + renovation + furnishing)
Where occupied months = 12 − vacancy months, and annual operating costs means assessment and quit rent, fire insurance, management or maintenance fees, and the cost of repairs that keep the property in its existing state. Transaction costs at purchase (stamp duty, legal fees, agent commission for the first tenant) are real money too, but for the on-page model we keep the denominator to the costs a landlord most often forgets: renovation and furnishing. You can add transaction costs to the denominator in your own spreadsheet for an even stricter figure.
What goes into operating costs (and what does not)
Allowable running costs are the ones that produce the rental income — assessment and quit rent, fire insurance premium, loan interest, rent-collection and rent-enforcement costs, and repairs that keep the property in its existing state. Renovation, furnishing and capital improvements are not running costs for this calculation; they belong in the denominator as part of your total investment, not subtracted from rent.
The tax layer: rental income is taxable
Net yield is not your take-home return. Rental income is taxable in Malaysia, so a meaningful share of that net income goes to LHDN before you see it. For a non-resident individual landlord, the rule is fixed and verifiable: a non-resident individual is taxed at a flat 30% on net Malaysian rental income (with effect from Year of Assessment 2020), with no personal reliefs, rebates or graduated resident bands — though allowable rental expenses are still deducted first, so the 30% applies to the income after deductions, not the gross rent. Resident landlords pay at the normal graduated individual rates instead, so a resident and a non-resident landlord can hold the identical property and walk away with materially different after-tax yield.
This is the gap the calculator above does not close for you: it gives net yield, and you then apply your own tax rate to the net income to get after-tax yield. A resident landlord on a low marginal band and a non-resident landlord paying a flat 30% will read the same net-yield line and keep very different amounts. For the full declare-and-deduct workflow — what you can deduct, how Borang B e-Filing works, and the handyman-receipt risk that erodes your real yield — see the rental income tax Malaysia guide.
Renovation cost in the yield calculator vs renovation for tax
This is the single most common confusion in the cluster, and it is worth one explicit line: renovation and furnishing are a cost in the true-yield denominator, but they are not deductible against rental income for tax. They raise your yield denominator and lower your percentage return, while producing no tax deduction in the year you spend them. A landlord who reads "put renovation in the yield calculator" and concludes "renovation is deductible" will both overstate the tax benefit and understate the real cost base. The two concepts are separate by design.
Vacancy is the biggest single yield killer
Two vacant months a year on a unit renting at RM1,800 is RM3,600 of rent that never arrives — roughly the same as a full year of operating costs on a mid-range apartment. Vacancy compounds because the months a unit sits empty are also the months it still incurs assessment, insurance and management fees with no rent to offset them. This is the structural reason a managed-landlord approach — tenant vetting, renewal chasing, honest listing photos that reduce early move-outs — often lifts true yield more than a rent increase would. The true rental yield calculator that underpins this page is built around that insight, and the managed-landlord tools at SPEEDHOME for landlords exist to keep that vacancy number down rather than to chase a higher headline rent.
Why most "good yield" figures you read are not comparable
The reason the SERP is full of conflicting national yield averages is that the number changes depending on whether you cite gross or net, whether vacancy is included, and which data source you draw from. Listing portals report gross yields implied by advertised asking rents; that figure is almost always higher than achieved rents after negotiation and vacancy. A few rules to keep your own comparisons honest: always state whether a figure is gross or net; always state the year and source; and never compare a gross figure from one source to a net figure from another. If a benchmark does not say gross or net, or does not carry a date, treat it as a marketing number, not a decision input.
FAQ
What is a good rental yield in Malaysia in 2026?
There is no single verifiable national figure that this page is willing to assert as current; published averages vary by source, year, and whether they are gross or net. The decision-grade test is your own true yield after renovation, vacancy and operating costs, compared against the return you could get on the same capital elsewhere. If your true yield after tax is below the return on a low-risk alternative, the property is not earning its capital.
What is the difference between gross and net rental yield?
Gross yield is annual rent divided by purchase price and ignores every cost. Net yield deducts vacancy and annual operating costs from the rent before dividing by purchase price. Net yield is always lower than gross yield, typically by one to two percentage points once assessment, insurance, management fees and vacancy are included.
How does renovation cost affect my rental yield?
Renovation and furnishing go into the denominator of true yield as part of the total cash you invested, which lowers your percentage return even when they let you charge higher rent. They are not deductible against rental income for tax, so they are a real cost base that produces no same-year tax benefit — the higher rent has to clear that cost over the hold period.
How do vacancy periods reduce my real return?
Every vacant month is rent that never arrives while operating costs still accrue, so vacancy lowers both the numerator (rent collected) and the effective return. Two vacant months on a RM1,800 unit is RM3,600 of lost rent, roughly equal to a full year of operating costs on a mid-range apartment.
How is true yield different from gross yield?
True yield divides net income (rent after vacancy and operating costs) by the total cash invested — purchase price plus renovation plus furnishing — instead of by purchase price alone. It is the only one of the three figures that reflects the return on the money you actually put in, which is the number a buy decision should be made on.
Does rental income tax reduce my effective yield?
Yes, and materially for non-resident landlords. Net yield is a pre-tax figure; rental income is taxable, so a portion of net income goes to LHDN before you keep it. A non-resident individual landlord pays a flat 30% on net Malaysian rental income, while a resident landlord pays graduated individual rates — so after-tax yield differs by tax status even on the identical property.