Gross and net rental yield after recurring charges.
Net rental yield
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Gross yield
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Annual rent
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Net annual income
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Annual expenses
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Your breakdown
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Item
Amount
Worked example
Take a RM500,000 condo let at RM1,800 a month, with RM4,000 a year of quit rent, assessment, and maintenance. Annual rent is RM1,800 times 12, or RM21,600. Gross rental yield is that annual rent divided by the price, so RM21,600 over RM500,000 is 4.32 percent. Net yield subtracts the running costs first: RM21,600 less RM4,000 is RM17,600 of net income, and dividing by the RM500,000 price gives 3.52 percent. The roughly 0.8 percentage point gap between the two is what the recurring charges quietly take off your return. Many Malaysian residential properties produce a gross yield in the 3 to 5 percent range, with net yield lower, so this example sits around the middle of the market before any financing costs.
Item
Amount
Annual rent (RM)
21,600
Annual expenses (RM)
4,000
Gross yield
4.32%
Net yield
3.52%
How it is calculated
Gross rental yield is the annual rent divided by the property price, where annual rent is the monthly rent times 12. It is the headline figure agents usually quote, and it ignores costs. Net yield is more honest: it subtracts the annual running costs, such as quit rent, the local assessment rate, maintenance or service charges, and any management fee, before dividing by the price. The tool reports both alongside the annual rent and net income, so you can see exactly how much the charges erode the return. Neither figure includes loan interest, income tax on the rent, vacancy periods, or one-off repairs, all of which lower the real return further. Comparing net yields across properties is a fairer guide than comparing gross yields, since two units with the same gross yield can differ sharply once charges are counted.
Frequently asked questions
What is a good rental yield in Malaysia?
Gross rental yield is annual rent divided by the property price. Net yield subtracts annual expenses such as quit rent, assessment rate, maintenance, and management before dividing by the price. Many Malaysian residential properties produce a gross yield in the region of 3 to 5 percent, with net yield lower after charges.
What costs should I include in net rental yield?
Include all recurring annual charges: quit rent (cukai tanah), the local-council assessment rate (cukai pintu), maintenance or service charges for strata properties, a property-management fee if you use an agent, and any building or fire insurance. One-off costs like legal fees and stamp duty on purchase are not included here but reduce your overall return on investment.
How does rental yield differ from capital growth?
Rental yield measures the income a property generates relative to its price. Capital growth is the increase in the property value itself over time. A property with a 4 percent net yield and no price appreciation gives a 4 percent total return. Combining both figures, and deducting financing costs, gives the true picture of a property investment.
Does rental income affect my income tax in Malaysia?
Yes. Net rental income, meaning rent received less allowable expenses, is taxable under the Income Tax Act for Malaysian residents. Allowable deductions include interest on a property loan, quit rent, assessment, and maintenance. The rental income tax calculator on this site walks through the deduction and rate calculation in detail.