Authored by the expert who managed and guided the team behind the Malaysia Property Pack
Everything you need to know before buying real estate is included in our Malaysia Property Pack
Yes, foreigners can legally own and rent out residential property in Malaysia in 2026, though the rules vary by state and property type.
This guide covers everything you need to know about rental yields, tenant demand, short-term versus long-term strategies, and the real costs of being a landlord in Malaysia.
We constantly update this blog post to reflect the latest regulations, market data, and rental trends across Malaysia.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Malaysia.
Insights
- Malaysia's gross rental yields average 4.5% to 6.0% in 2026, but mid-market MRT-linked neighborhoods like Cheras and Ara Damansara often outperform prime areas by 1 to 2 percentage points.
- Kuala Lumpur has over 35,000 active short-term rental listings with only 51% average occupancy, signaling a competitive market where property quality and management make or break profitability.
- Non-resident landlords in Malaysia face a flat 30% withholding tax on rental income, which can cut net yields by nearly half compared to tax-resident owners.
- Malaysia has no nationwide rent control since the 1997 repeal, meaning landlords can freely set and increase rents based purely on market conditions and contract terms.
- Furnished apartments in Malaysia rent 15% to 25% faster than unfurnished ones, but landlords should budget for higher air-conditioning repair costs due to the tropical climate.
- George Town in Penang achieves higher average nightly rates (around RM260) than Kuala Lumpur (around RM230), despite having far fewer listings.
- The typical security deposit convention in Malaysia is two months' rent plus one month for utilities, though this is market practice rather than a legal cap.
- Short-term rental legality in Malaysia depends heavily on your building's strata by-laws, and recent Court of Appeal rulings have upheld management corporations' power to ban Airbnb-style rentals.
- Johor Bahru's short-term rental occupancy sits around 42%, lower than Kuala Lumpur and Penang, reflecting its reliance on cross-border Singapore demand rather than tourism.
Can I legally rent out a property in Malaysia as a foreigner right now?
Can a foreigner own-and-rent a residential property in Malaysia in 2026?
As of early 2026, foreigners can legally own residential property in Malaysia and rent it out, provided the property meets the state-specific price thresholds and receives the necessary state authority approval.
The main ownership structure available to foreigners is direct freehold or leasehold ownership in their own name, with some investors also using Malaysian-incorporated companies for larger portfolios.
The single most common restriction foreigners face in Malaysia is the minimum purchase price threshold, which varies by state but typically ranges from RM1 million to RM2 million depending on the location and property type.
If you're not a local, you might want to read our guide to foreign property ownership in Malaysia.
Do I need residency to rent out in Malaysia right now?
Malaysia does not require you to be a resident or live in the country to own and rent out property, so you can operate as a landlord entirely from overseas.
However, you should register with Malaysia's tax authority (LHDN) to obtain a tax identification number, which allows you to declare rental income properly and claim allowable deductions.
A local Malaysian bank account is not legally mandatory, but it makes collecting rent, paying maintenance fees, and handling repairs significantly easier than relying on international transfers.
Managing a rental property remotely in Malaysia is entirely feasible, though most foreign landlords hire a local property agent or manager to handle tenant communications, inspections, and emergency repairs.
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What rental strategy makes the most money in Malaysia in 2026?
Is long-term renting more profitable than short-term in Malaysia in 2026?
As of early 2026, long-term renting tends to be more profitable for most foreign landlords in Malaysia because it offers steadier income, lower operating costs, and fewer regulatory complications with building management.
A well-managed long-term rental in Kuala Lumpur typically generates around RM30,000 to RM45,000 per year (roughly USD 7,400 to USD 11,100 or EUR 6,900 to EUR 10,300), while a comparable short-term rental might earn RM40,000 to RM60,000 gross but loses 35% to 55% of that to platform fees, cleaning, and vacancy.
Short-term renting tends to outperform long-term financially in tourism-heavy locations like George Town in Penang, KLCC, and Bukit Bintang, where high visitor traffic and premium nightly rates can offset the higher operating costs.
What's the average gross rental yield in Malaysia in 2026?
As of early 2026, the average gross rental yield for residential property in Malaysia is approximately 4.5% to 5.5%, though this varies significantly by city, neighborhood, and property type.
The realistic range for most residential properties spans from around 3.5% in prime high-priced areas like KLCC and Mont Kiara to 6.5% in mid-market transit-linked neighborhoods like Cheras and Puchong.
Studios and smaller one-bedroom apartments typically achieve the highest gross rental yields in Malaysia because their lower purchase prices relative to rental rates create better return ratios than larger units.
By the way, we have much more granular data about rental yields in our property pack about Malaysia.
What's the realistic net rental yield after costs in Malaysia in 2026?
As of early 2026, the average net rental yield after all operating costs in Malaysia is approximately 2.5% to 4.0% for long-term rentals and 2.0% to 5.0% for short-term rentals.
Most landlords in Malaysia realistically experience net yields between 2.0% and 4.5%, with the wide range reflecting differences in tax status, building fees, and vacancy rates.
The three main cost categories that reduce gross yield in Malaysia are condo maintenance and sinking fund fees (which can reach RM0.50 per square foot monthly), air-conditioning repairs and servicing (a recurring expense in the tropical climate), and income tax (especially the 30% flat rate for non-residents).
You might want to check our latest analysis about gross and net rental yields in Malaysia.
What monthly rent can I get in Malaysia in 2026?
As of early 2026, typical monthly rents in Malaysia's major cities range from around RM1,500 (USD 370, EUR 345) for a studio to RM2,500 (USD 615, EUR 575) for a one-bedroom and RM3,500 (USD 860, EUR 805) for a two-bedroom apartment.
A realistic entry-level monthly rent for a decent studio in Malaysia ranges from RM1,200 to RM1,800 (USD 295 to USD 445, EUR 275 to EUR 415), depending on whether you're in a secondary city or a central Kuala Lumpur location.
A typical one-bedroom apartment in Malaysia rents for RM1,900 to RM3,200 per month (USD 470 to USD 790, EUR 435 to EUR 735), with the higher end reflecting newer buildings near MRT stations or in expat-popular areas.
A two-bedroom apartment in Malaysia typically commands RM2,600 to RM4,500 per month (USD 640 to USD 1,110, EUR 600 to EUR 1,035), with furnished units in prime Kuala Lumpur neighborhoods reaching the top of this range.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Malaysia.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Malaysia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What are the real numbers I should budget for renting out in Malaysia in 2026?
What's the total "all-in" monthly cost to hold a rental in Malaysia in 2026?
As of early 2026, the total "all-in" monthly cost to hold a typical rental condo in Malaysia is approximately RM500 to RM1,200 (USD 125 to USD 295, EUR 115 to EUR 275), excluding mortgage payments.
A realistic low-to-high monthly cost range for most standard rental properties in Malaysia spans from RM400 for a basic apartment in a secondary city to RM1,500 (USD 100 to USD 370, EUR 90 to EUR 345) for a larger unit in a premium Kuala Lumpur building with high maintenance fees.
The single largest contributor to monthly holding costs in Malaysia is typically the condo maintenance fee plus sinking fund, which can reach RM400 to RM800 per month for a mid-sized unit in a well-maintained building with facilities like pools and gyms.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Malaysia.
What's the typical vacancy rate in Malaysia in 2026?
As of early 2026, the typical vacancy rate for rental properties in Malaysia is approximately 8% to 15%, which translates to roughly one to two months of vacancy per year for most landlords.
Landlords in Malaysia should realistically budget for 1.0 to 2.0 months of vacancy per year because tenant turnover, marketing time, and occasional slow seasons create gaps even in strong rental markets.
The main factor that causes vacancy rates to vary across Malaysia's neighborhoods is proximity to employment hubs and public transit, with MRT-linked areas like Bangsar South and Ara Damansara experiencing lower vacancy than isolated developments.
The highest tenant turnover in Malaysia typically occurs in January and February after Chinese New Year, when many tenants relocate for new jobs or return home, creating a brief spike in available units.
We have a whole part covering the best rental strategies in our pack about buying a property in Malaysia.
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Where do rentals perform best in Malaysia in 2026?
Which neighborhoods have the highest long-term demand in Malaysia in 2026?
As of early 2026, the top three neighborhoods with the highest overall long-term rental demand in Malaysia are Mont Kiara, Bangsar, and KLCC in Kuala Lumpur, all benefiting from strong expat populations, corporate proximity, and lifestyle amenities.
Families in Malaysia tend to concentrate their rental demand in neighborhoods like Desa ParkCity, TTDI (Taman Tun Dr Ismail), Bandar Utama, and Subang Jaya, where international schools, green spaces, and family-friendly facilities are abundant.
Students in Malaysia drive the strongest rental demand near universities, particularly in areas like Pantai Dalam and Kerinchi (near University of Malaya), Gelugor in Penang (near USM), and Skudai in Johor (near UTM).
Expats and international professionals in Malaysia favor Mont Kiara, Bangsar, Ampang Hilir, and parts of KLCC, where international schools, embassies, and corporate offices cluster together.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Malaysia.
Which neighborhoods have the best yield in Malaysia in 2026?
As of early 2026, the top three neighborhoods with the best rental yield in Malaysia are Cheras (MRT-linked pockets), Setapak, and Puchong, where moderate property prices combine with solid tenant demand to create attractive returns.
The estimated gross rental yield in these top-yielding neighborhoods ranges from approximately 5.5% to 7.0%, compared to the 3.5% to 5.0% typical in prime but expensive areas like KLCC and Mont Kiara.
The main characteristic that allows these neighborhoods to achieve higher yields is their lower entry price relative to rent, meaning landlords pay less per square foot to buy but collect rents comparable to pricier areas thanks to strong working-class and young professional tenant pools.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Malaysia.
Where do tenants pay the highest rents in Malaysia in 2026?
As of early 2026, the top three neighborhoods where tenants pay the highest rents in Malaysia are KLCC, Bangsar, and Mont Kiara in Kuala Lumpur, where prime locations and lifestyle amenities command significant premiums.
A standard two-bedroom apartment in these premium neighborhoods typically rents for RM5,000 to RM10,000 per month (USD 1,230 to USD 2,460, EUR 1,150 to EUR 2,300), with luxury units exceeding these ranges.
The main characteristic that makes these neighborhoods command the highest rents is their concentration of high-end amenities, walkable lifestyle offerings, and proximity to both major business districts and international schools, creating a "live-work-play" premium that tenants willingly pay for.
The typical tenant profile in these highest-rent neighborhoods includes senior expatriate executives on corporate housing allowances, embassy staff, and wealthy local professionals who prioritize convenience and prestige over value.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Malaysia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
What do tenants actually want in Malaysia in 2026?
What features increase rent the most in Malaysia in 2026?
As of early 2026, the top three property features that increase monthly rent the most in Malaysia are reliable air-conditioning with inverter technology, high-speed fiber internet connectivity, and walkable proximity to an MRT or LRT station.
Proximity to an MRT station adds an estimated 10% to 20% rent premium in Malaysia, as tenants increasingly prioritize avoiding Kuala Lumpur's notorious traffic congestion.
One commonly overrated feature that landlords invest in but tenants do not pay much extra for in Malaysia is a swimming pool, since most condos already have one and tenants rarely consider it a differentiating factor.
One affordable upgrade that provides strong return on investment for landlords in Malaysia is installing a quality water heater and ensuring the air-conditioning units are recently serviced, as these directly address tenant comfort in the tropical climate.
Do furnished rentals rent faster in Malaysia in 2026?
As of early 2026, furnished apartments in Malaysia typically rent 15% to 25% faster than unfurnished ones because the primary tenant pool of expats, young professionals, and students prefers move-in-ready units.
Furnished apartments in Malaysia command a rent premium of approximately 10% to 20% over unfurnished equivalents, though landlords should factor in higher maintenance and replacement costs for furniture and appliances.
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How regulated is long-term renting in Malaysia right now?
Can I freely set rent prices in Malaysia right now?
Landlords in Malaysia have full freedom to set initial rent prices at whatever the market will bear, as the country has no nationwide rent control system following the repeal of the old rent control laws in 1997.
Rent increases during a tenancy in Malaysia are not capped by any regulation and are instead governed entirely by the terms negotiated in your tenancy agreement, meaning you and your tenant agree upfront on any renewal terms or increase mechanisms.
What's the standard lease length in Malaysia right now?
The standard lease length for residential rentals in Malaysia is 12 months, though 24-month leases are also common when landlords and tenants want more stability.
There is no legal cap on security deposits in Malaysia, but the market convention is two months' rent as security deposit plus one month as utilities deposit, totaling around RM4,500 to RM9,000 (USD 1,110 to USD 2,215, EUR 1,035 to EUR 2,070) for a typical apartment.
Security deposit returns in Malaysia are governed by the tenancy agreement terms, with landlords typically required to return the deposit within 14 to 30 days after the tenant vacates, minus any legitimate deductions for damages or unpaid bills.
We made this infographic to show you how property prices in Malaysia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
How does short-term renting really work in Malaysia in 2026?
Is Airbnb legal in Malaysia right now?
Airbnb-style short-term rentals are generally legal in Malaysia, but their practical legality depends heavily on your building's strata by-laws and whether your local council requires registration or permits.
Some local councils and the Ministry of Tourism (MOTAC) have registration pathways for tourist accommodation, and recent policy signals suggest that Airbnb-style operators may soon need permits and insurance in more areas.
Malaysia does not have a nationwide annual night limit like some European cities, though individual strata buildings can impose restrictions or outright bans through their by-laws and management corporation rules.
The most common consequence for operating a non-compliant short-term rental in Malaysia is enforcement action by your building's management corporation, which can include fines, legal action, and pressure to cease operations based on recent Court of Appeal precedents.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Malaysia.
What's the average short-term occupancy in Malaysia in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Malaysia is approximately 45% to 55%, varying significantly by city and property quality.
The realistic low-to-high occupancy range for most short-term rentals in Malaysia spans from around 35% for average listings in competitive markets to 65% for well-reviewed properties in prime tourist locations.
The highest occupancy months for short-term rentals in Malaysia are typically November through February (covering school holidays, Christmas, and Chinese New Year) and June through August (summer travel and mid-year school breaks).
The lowest occupancy months typically fall in March through May and September through October, when tourism slows between peak seasons and business travel provides the main demand.
Finally, please note that you can find much more granular data about this topic in our property pack about Malaysia.
What's the average nightly rate in Malaysia in 2026?
As of early 2026, the average nightly rate for short-term rentals in Malaysia is approximately RM230 to RM280 (USD 57 to USD 69, EUR 53 to EUR 64), depending on the city and property type.
The realistic low-to-high nightly rate range for most short-term rental listings in Malaysia spans from around RM120 (USD 30, EUR 28) for budget studios to RM500 (USD 123, EUR 115) for premium apartments in prime locations.
The typical nightly rate difference between peak season and off-season in Malaysia is around RM50 to RM100 (USD 12 to USD 25, EUR 12 to EUR 23), with well-managed properties adjusting prices dynamically to capture holiday premiums.
Is short-term rental supply saturated in Malaysia in 2026?
As of early 2026, the short-term rental market in Malaysia shows moderate saturation in major cities, with Kuala Lumpur having over 35,000 active listings but only around 51% average occupancy, indicating competitive conditions.
The number of active short-term rental listings in Malaysia has been growing steadily, with Kuala Lumpur in particular seeing continued supply additions that put downward pressure on occupancy rates for average properties.
The most oversaturated neighborhoods for short-term rentals in Malaysia are KLCC, Bukit Bintang, and parts of Bangsar in Kuala Lumpur, where high listing density means only top-reviewed properties achieve strong occupancy.
Neighborhoods that still have room for new short-term rental supply in Malaysia include emerging areas like Sentul in Kuala Lumpur, parts of Bayan Lepas in Penang near the tech corridor, and selected Iskandar Puteri townships in Johor that benefit from Singapore spillover demand.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Malaysia, we always rely on the strongest methodology we can … and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| National Property Information Centre (NAPIC) | Malaysia's official government property data hub run by JPPH. | We used it as our ground truth for official property market publications and definitions. We also used it to anchor discussions around market supply and official price indices. |
| National Land Code (Act 828) | Official consolidated land law published via Malaysia's legal portal. | We used it to ground the state consent and foreign ownership concepts in actual statute. We used it to explain why rules differ by state even when the framework sounds national. |
| Strata Management Act 2013 | Core national law governing condos, apartments, and serviced residences. | We used it to explain why building management and by-laws matter for short-term renting. We used it to frame STR legality as a strata plus local authority question. |
| Inland Revenue Board (LHDN) Non-Resident Page | Official definition and guidance for tax residency status. | We used it to explain why tax residency is about days in country, not citizenship. We used it to set expectations for foreign owners renting out remotely. |
| Inland Revenue Board (LHDN) Tax Rate Page | Malaysia's official tax authority stating rates by year of assessment. | We used it to anchor the tax rate framework in an official source. We used it to support the point that non-resident taxation differs significantly. |
| AirDNA (Kuala Lumpur) | Widely used STR data provider covering Airbnb and Vrbo performance. | We used it for occupancy and daily rate benchmarks in Malaysia's largest market. We used it as the platform performance layer, then validated with official tourism stats. |
| Tourism Malaysia Statistics Dashboard | Official stats dashboard for visitor arrivals and tourism indicators. | We used it to connect short-term rental demand to the underlying tourism engine. We used it as the official demand-side reality check for STR seasonality. |
| The Malaysian Bar Tenancy Primer | National bar association's public-facing legal education content. | We used it for plain-language details like typical deposits and rent payment conventions. We used it to keep advice practical and legally aligned. |
| Control of Rent (Repeal) Act 1997 | Repeal statute that removed Malaysia's old rent control regime. | We used it to explain why Malaysia has no modern nationwide rent cap. We used it to support the rent is mostly market plus contract reality. |
| MOTAC Tourist Accommodation Licensing | Federal ministry responsible for tourism with official licensing information. | We used it to show that tourist accommodation can involve registration pathways. We used it to frame STR compliance as potentially involving more than just the platform. |
We have made this infographic to give you a quick and clear snapshot of the property market in Malaysia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.