5.4% yield? Ask what's left after costs

An agent tells you a JB condo "yields 5.4%", and your FD pays 3%. Easy win? Not yet: 5.4% of what, and before which costs?

This guide is for owners and buyers of homes in Johor Bahru. The sums work for any home in Malaysia.

Use yield when you buy, when you compare 2 homes, or when someone quotes you one. It can't choose between Airbnb and a tenant for the home you already own. We'll show why.

How to calculate rental yield: your home's "FD rate"

Start small. Put RM100 in the bank at 3%, and a year later you have RM3 extra. Yield is your home's version of that 3%.

Now a home. Here is Unit B, made up for this guide: bought for RM400,000, let at RM1,800 a month.

• 1 month: RM1,800
• 1 year: RM1,800 × 12 = RM21,600
• Yield: RM21,600 ÷ RM400,000 = 5.4%

Gross rental yield equals a year's rent divided by the home's priceGross rental yield=a year's rentthe home's price

That's the 5.4% the agent quoted. It's called gross because nothing has come off yet.

Gross vs net yield: what's left after the costs

Your FD has no costs. Your home does, every month, tenant or not.

Think of a bucket: rent pours in, RM21,600 a year. Each cost is a hole. Net is what's left in the bucket.

Unit B: from rent to what's left

RM21,600 in. RM9,100 leaks out. RM12,500 stays.

1. Rent a year RM21,600RM1,800 × 12
2. Maintenance fee and sinking fund −RM4,200Your building's bill: RM350 a month
3. Quit rent and assessment −RM500The land office and council notices
4. Insurance −RM200Your policy
5. Repairs and worn items −RM600Last year's receipts, or a guess
6. 1 empty month between tenants −RM1,800If your tenant changes each year
7. Agent fee −RM1,800About 1 month's rent, if your tenant changes each year
8. What stays RM12,500Before tax

Gross yield

5.4%

RM21,600 rentRM400,000 price

Net yield

3.1%

RM12,500 leftRM400,000 price

Net rental yield equals (a year's rent − a year's costs) divided by the home's priceNet rental yield=(a year's rent − a year's costs)the home's price

Now put it next to the FD. RM400,000 in an FD at 3% pays RM12,000 a year, and Unit B leaves RM12,500. So 5.4% against 3% is really about 3.1% against 3%.

That small extra comes with a tenant to find, repairs to pay for and a price that can fall. The FD has none of those.

And that's all before tax. Rent from your home is taxed as income (LHDN Public Ruling 12/2018). Ask a tax agent how your FD interest is taxed, then compare both after tax.

"On what price?" Same money left, 3 yields

The same RM12,500 is a smaller % of a bigger price, just like the same interest is a lower rate on a bigger FD:

Unit B: same RM12,500, 3 prices

A bigger price makes a smaller yield.

• What you paidThe price on your sale and purchase agreement3.1% PriceYield RM12,500 ÷ RM400,000 = about 3.1%
• All-inThe price plus legal fees, stamp duty and furniture2.9% PriceYield RM12,500 ÷ RM430,000 = about 2.9%
• Today's valueWhat a similar home sells for now2.8% PriceYield RM12,500 ÷ RM450,000 = about 2.8%

None is wrong. Pick the price that fits your question:

• Thinking of buying? Use all-in: it's all the money that leaves your pocket.
• Checking how your buy has done? Use what you paid.

Thinking of selling? Work it out in RM. Sell Unit B at RM450,000 and put it in an FD: RM450,000 × 3% = RM13,500 a year. That beats the RM12,500 the home leaves, unless selling costs you more than about RM33,000.

This only counts rent. If you think the price will go up, add that before you decide.

Have a loan? Check 2 things

Does the loan pay for itself? Start small. Every RM1,000 of Unit B's price earns about RM31 a year.

If that RM1,000 is borrowed at 4%, it costs RM40. So you lose about RM9 a year on every RM1,000 you borrow.

Can you carry the gap each month?

Part of each instalment pays off your loan, like saving. But in the first years, most of it is interest, and that part is gone.

Airbnb or a tenant? Yield can't decide this one

Same home, same price. So whichever way leaves more RM also has the bigger %. The % tells you nothing new: just compare the RM.

Airbnb is less like an FD and more like opening a stall. You pay to set it up first, and what you take home changes every month.

So compare 3 things:

1. RM left a year after each way's own costs, including replacing worn items.
2. Setup money: under our agreement, an Airbnb home needs all of our Setup List, from beds to pots, while a tenancy can be let bare. Ask how many months it takes to earn this back. First check your building allows short stays: see Airbnb rules in Johor vs Penang.
3. Risk: a tenant's rent is fixed in a contract, but a tenant can fall behind. Airbnb income isn't fixed: it moves with bookings and prices.

Thinking Airbnb? 5 costs owners often leave out

The manager's fee, cleaning and the platform's fee are usually set before you start. These 5 are holes we often see missing from an owner's sums when we take on a home.

With a tenancy, the tenant usually pays the electricity, water and internet. On Airbnb, under our agreement, you do.

Electricity follows the guests. At 1 home we manage, the bills from Mar to Jul 2026 ran 375 to 538 kWh a month. Then a family came for a long stay in Aug.

The next full month's bill was 1,175 kWh, about RM607. The month before, with only their first 6 days in it, was about RM302. A month like that isn't usual, but on Airbnb the owner pays it.

Internet. Our agreement says 100 Mbps or more, as guests work and stream. You pay the monthly bill.

The full setup. You buy, deliver and install everything on our Setup List: furniture, fixtures, appliances and equipment. If the home was lived in or used before, you first clear it to our Keep / Remove List. We supply the soap, toilet paper and cleaning things.

Aircon and appliances. You supply and replace every permanent fixture and appliance, and keep them and the furniture fit for guests. Check your tenancy agreement: who pays to service the aircon? On Airbnb, no guest will.

Small repairs. We can arrange small repairs without asking you first: up to RM150 each time, and RM300 a month.

The cost comes off the money we send you each month until it's covered. If it's urgent for safety or to keep the home fit to live in, like a burst pipe, we can spend more. We tell you within 24 hours, and the cost comes off with the receipts.

Is a 4% gross yield good?

Probably not, if 4% is gross and your costs are like Unit B's. It's a smaller tap, and most of the holes stay the same size.

4% of RM400,000 is RM16,000 a year, about RM1,333 a month.

Take off Unit B's other costs (RM5,500), plus 1 empty month and 1 month's agent fee at that lower rent.

About RM7,833 stays. That's about 2.0% net. A 3% FD pays more, even before tax.

So before you call any yield good, ask:

• Gross or net? 4% gross can shrink to about 2% net.
• Better than your FD? Compare net, after tax on both.

Yield also leaves out changes in the price. Homes can sell for more or less than you paid, so yield is never your whole return.

Calculate your own yield in 2 minutes

Have these ready: your maintenance bill, quit rent and assessment notices, insurance policy and tenancy offer.

Work out your own yield

It starts on Unit B, our made-up example. Type in your own numbers.

The home

The home's priceWhat you paid, all-in, or today's valueRM Rent a monthThe tenancy offerRM

Costs

Maintenance fee and sinking fund, a monthYour building's billRM Quit rent and assessment, a yearThe land office and council noticesRM Insurance, a yearYour policyRM Repairs and worn items, a yearLast year's receipts, or a guessRM Empty months, a yearBetween tenants; 0 if they renewmonths Agent fee, a yearYour agent's quote; 0 if there's no new tenant to findRM

To compare with (leave blank to skip)

Your FD rateYour bank's rate for the same money% Loan instalment, a monthYour loan statementRM

Gross yield

5.4%

RM21,600 rent ÷ RM400,000

Net yield

3.1%

RM12,500 left ÷ RM400,000, before tax

Left a year, before tax

RM12,500

RM21,600 rent − RM9,100 costs

If the price sat in an FD

RM12,000

RM400,000 × 3%, before tax

Each month, after the instalment, before tax

−RM658

About RM1,042 left a month − RM1,700 instalment

Thinking about Airbnb too? To see what a manager takes off before you're paid, read how to read your manager's monthly statement.

It's number 3 of our 3 Airbnb numbers every owner should know.

Questions owners ask

Is rental yield the same as ROI?

No. ROI (return on investment) also counts what you gain or lose on the price when you sell. With a loan, you can work it out on just your own cash, once you take off the loan interest.

Which costs can I take off for tax?

Our reading of LHDN Public Ruling 12/2018: what you pay to earn the rent, like quit rent and assessment, can come off. The agent fee and stamp duty for your first tenant can't, but those for a later tenant or a new lease can. Ask a tax agent for your own case.

Sources: Rent from letting a home is taxed as income: under paragraph 4(d) of the Income Tax Act 1967 when the owner does not give maintenance or support services comprehensively and actively, or as business income under paragraph 4(a) when they do (LHDN Public Ruling 12/2018, paragraphs 4 and 5). For rent under 4(d), assessment and quit rent are allowed costs (paragraph 8.2), and the costs of getting the first tenant are not (paragraph 8.3). Owner costs: RoomGuru's current standard house management agreement, Sep 2026 version, articles 5.1, 5.2, 5.4 and 5.5; older or custom agreements may differ. Electricity case: TNB bills for 1 home we manage, sent to us by its owner, 2026. Unit B, its prices, rent, costs, loan rate, instalment and the FD rate are made-up examples. Simon runs RoomGuru, which has managed homes in Johor Bahru on Airbnb since 2023. This is general information, not financial or tax advice.