💰 Investment

Calculating rental yield correctly — most people get this wrong

Asha Pillay

9 Mar 2026

I see so many investors quote 5-6% yield but they're calculating it wrong.

Gross yield (the easy but misleading one):
Annual rent ÷ Purchase price × 100
RM1,500/month = RM18,000/year on a RM400k property = 4.5% gross

Net yield (the real one):
(Annual rent - Annual expenses) ÷ Purchase price × 100

Expenses to include:
- Maintenance fee: RM200/month = RM2,400/year
- Property tax (quit rent + assessment): ~RM600/year
- Insurance: ~RM400/year
- Vacancy provision (assume 1 month empty): RM1,500
- Annual repair budget: RM1,000

Total expenses: ~RM5,900/year
Net rental: RM18,000 - RM5,900 = RM12,100
Net yield: 12,100 ÷ 400,000 = 3.0%

Always calculate net, not gross.

#rental-yield #investment #calculation #property

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