Gross yield can look better than reality

A simple gross yield uses annual rent divided by purchase price. It is useful for comparing projects, but it is not your final return.

Build a more realistic model

Subtract recurring costs such as maintenance, expected vacancy, management, repairs and other property-specific expenses. Then consider financing costs and taxes separately.

Ask one more question

Instead of asking only “What is the rental yield?”, ask:

“Who will actually rent this unit, for how long, and why would they choose it over the alternatives?”

That question often reveals more about investment quality than a headline percentage.

FAQ

What is rental yield?

Rental yield is the yearly rent as a percentage of the property price. Gross yield uses the rent before costs; net yield uses the rent after costs.

What should I deduct to get a realistic net yield?

Deduct vacancy periods, agent or management fees, maintenance fee and sinking fund, quit rent, assessment tax, insurance and repairs. See owning property in Johor Bahru for the recurring bills.

Does tax affect my return?

Yes. Rental income may be taxable, and selling can trigger Real Property Gains Tax. See the RPGT guide and confirm your own position with a tax adviser.

Can a foreign owner rent out a Johor property?

Yes, in general. See renting out a Johor property as a foreign owner for the practical points.