An Insider’s Quick Guide Into Malaysia’s Rental Market: Is Airbnb profitable in Malaysia? Find out with essential metrics and their legality, paving the way for lucrative opportunities in 2024!
Home > Resources > Airbnb Investment >
Is Airbnb profitable in Malaysia? Find out with essential metrics and their legality, paving the way for lucrative opportunities in 2024!
- Last updated January 1, 2024
Is Airbnb Profitable in Malaysia?
Key Takeaways
- The high influx of tourists, coupled with a growing economy and affordable cost of living, makes Malaysia an enticing prospect for property investors, especially in the short-term rental market.
- Explore the advantages and disadvantages of investing in Malaysia’s real estate market, as well as its legal framework.
- Dive into details of the MM2H Program in Malaysia, a gateway for foreigners seeking a second home. Discover the streamlined property purchase process and eligibility criteria.
- Utilizing the Airbtics Dashboard, we unveil the top 6 cities in Malaysia for short-term rental investments. This article offers valuable insights for property investors seeking to maximize their returns.
Malaysia’s Airbnb Potential: Exploring Profitability, Top Markets, and Legal Insights
Located in Southeast Asia, bordering Thailand to the north and Singapore to the south, Malaysia lies majestically as a beautiful destination with its ethnic and cultural diversity and impressive biodiversity. With its slogan “Malaysia, Truly Asia” this country combines a rich diversity and allure, thus, becoming an exceptional tourist destination
As of 2022, Malaysia welcomed around 10M overnight visitors and owns one of the highest number of tourist arrivals among all Southeast Asian countries! This already gives an overview of how profitable can a rental property be in this country, opening the doors to plenty of investment opportunities for property investors looking to cater to tourist accommodations.
Are you wondering “Is Airbnb profitable in Malaysia?” – We got you! This article highlights the short-term rental profitability in Malaysia, providing essential Airbnb metrics. Additionally, we explore the advantages and disadvantages of real estate investment, the top Airbnb markets along its legal aspects in Malaysia!
Why Invest in Property in Malaysia: Pros & Cons
Short-term rentals have proven to be a lifesaver for numerous property owners and landlords as they provide lucrative sources of income, especially in popular tourist destinations like Malaysia. Investing in Malaysia can come with many advantages but we should also consider what kind of downsides investors could face when stepping into this rental market.
Here are the pros and cons that you should keep in mind before buying an investment property in Malaysia:
Pros of Buying a Property in Malaysia
TRENDING AIRBNB DESTINATION
It’s widely known that Malaysia is a tourist destination that has gained the attention of national and international travelers over the past years. For this reason, it has been witnessing substantial growth in its Airbnb market. Consequently, this business model has become a reliable source of income for property owners looking for ways to combat rising living costs.
According to Airbnb, Malaysia is one of the trending Airbnb destinations as it recorded an increase in non-urban nights booked after the pandemic. Moreover, the country also stands out as a top winter destination worldwide by search and one of the best value destinations for Valentine’s Day! With that being said, venturing into Airbnb property investments in Malaysia presents the potential for substantial returns on investment as well as the opportunity to enjoy a fascinating culture coupled with striking natural wonders.
AFFORDABLE COST OF LIVING
With a relatively low cost of living and accessible housing market, Malaysia stands out as an affordable destination for investments compared to other countries in Southeast Asia. And while affluent cities like Kuala Lumpur can be more expensive, they remain a cheaper option compared to major cities in Singapore or Hong Kong.
On the other hand, the real estate demand in Malaysia is consistently growing, principally fueled by its population increase and urbanization. According to NAPIC, the average house price in Malaysia is currently around RM 355,000 ($75,992).
GROWING ECONOMY
While Malaysia’s economy faced many challenges due to the pandemic and a simultaneous government crisis, it’s now heading on the path to recovery. The country owns a diversified economy with a GDP of RM1,110 billion ($252 billion). It also features a strong labor market with an unemployment rate of 4%. Moreover, Malaysia ranks 1st in Southeast Asia for Foreign investment and 3rd as the most innovative upper middle-income economy!
Cons of Buying a Property in Malaysia
Aside from the pros of buying an investment property in Malaysia, let’s discuss some cons so you can know what to anticipate when investing and living in this country. Examining both sides of the coin is crucial for establishing realistic expectations!
PURCHASING A PROPERTY AS A FOREIGNER
While foreigners are allowed to purchase property in Malaysia, some requirements should be met. For instance, foreigners cannot own property if its value is less than RM1 million (around $215,000) or properties that are located within Malay Reserved land. The process of buying a house also involves many parties and can take up around 4 to 6 months.
TROPICAL WEATHER AND CLIMATE CHANGE
Malaysia features a tropical climate, which means that most days of the year are either hot and humid or hot and dry with some rain showers. Yet, climate change heavily affects the country as in recent years it has confronted disasters like drought, landslides, soil erosions, and floods.
The majority of its losses can be attributed to flooding, which is prone to happen during the monsoon season. Malaysia’s climate is characterized by two monsoon regimes: the Southwest Monsoon, which happens from April to September, and the Northeast Monsoon which goes from October to March.
Airbnb Regulations in Malaysia
Before starting an Airbnb business in Malaysia, knowing the essential Airbnb key metrics in your target market, such as their occupancy rates and revenue, is vital. Yet, there are also other factors that investors should consider like the legality of operating a rental property or Airbnb listing.
So let’s get to the point – Owning an Airbnb or STR listing in Malaysia is legal. While the country has been looking into regulating STR, there are currently no specific rules regulating short-term rentals. However, investors should keep in mind that this business activity is subject to local council regulations in specific zones.
Additionally, in following, Malaysia’s Tourism Tax Act 2017, Airbnb hosts are obligated to register with the Malaysian government and remit a tourist tax of RM10 per room per night. In the case that a host doesn’t comply with this requirement, it may lead to penalties, including fines of up to RM50,000 or imprisonment for up to three years.
On the other hand, the island of Penang introduced a ban on short-term rental accommodations in residential units. This ban was chosen in response to residents’ complaints about the inappropriate conduct of tourists. But, commercial properties are not part of the ban.
MM2H Program: Buying a Property in Malaysia as a Foreigner
The MM2H Program (Malaysia My Second Home) is a government initiative designed to encourage foreign property investment in the country. This involves offering a renewable 10-year visa to foreigners who meet specific criteria. Some of the requirements include:
- Demonstrating proof of offshore income
- Depositing a fixed sum in a Malaysian bank as required
- Covering immigration fees and a security bond
- Visa holders are required to spend a minimum of 90 days in the country throughout the year
- Be sponsored by a Malaysian citizen (in Peninsula Malaysia, a registered MM2H agent can replace a citizen sponsor).
Just a note: Sarawak has its own rules and requirements, but applicants should be 50 years or older.
Holding an MM2H visa provides certain advantages in the property purchase process, including varying price limits and streamlined loan facilitation. The application procedure is not complicated and can be completed through the official government website
Best Place to Invest in Property in Malaysia: Top Markets for 2024
After weighing the pros and cons of investments in Malaysia, you may think this is an attractive destination to invest in STRs. But now, we should answer our most important question: Is Airbnb Profitable in Malaysia? – In a nutshell, Airbnb listings in Malaysia can be a profitable business venture that can help you generate a nice passive income and even allow you to expand your portfolio.
For instance, a 1-BR STR apartment in Kuala Lumpur can generate up to RM54,883 ($11,746) annually as confirmed by Airbtics’ Airbnb Income Calculator.
Now, let’s go further and explore the best places to invest in property in Malaysia:
Location | Airbnb Listings | Best Number of Bedrooms | Airbnb Annual Revenue | Median Property Price | GRY |
---|---|---|---|---|---|
Petaling Jaya | 1,658 | 2 bedrooms | RM515,000 | RM49,627 ($10,621) | 9.64% |
Johor Bahru | 3,717 | 2 bedrooms | RM360,000 | RM41,894 ($8,966) | 11.64% |
Kota Kinabalu | 2,145 | 1 bedroom | RM545,000 | RM40,067 ($8,575) | 7.65% |
Shah Alam | 1,372 | 2 bedrooms | RM380,000 | RM36,684 ($7,851) | 9.65% |
Ipoh | 1,595 | 2 bedrooms | RM230,000 | RM36,212 ($7,750) | 15.74% |
Malacca | 3,448 | 2 bedrooms | RM340,000 | RM28,044 ($6,002) | 8.25% |
Location
Airbnb Dataset
- Total Airbnb Listings: 1,658
- Best Number of Bedrooms: 2 bedrooms
- Median Property Price (2 bedrooms): RM515,000
- Airbnb Annual Revenue: RM49,627 ($10,621)
- Gross Rental Yield: 9.64%
- Total Airbnb Listings: 3,717
- Best Number of Bedrooms: 2 bedrooms
- Median Property Price (2 bedrooms): RM360,000
- Airbnb Annual Revenue: RM41,894 ($8,966)
- Gross Rental Yield: 11.64%
- Total Airbnb Listings: 2,145
- Best Number of Bedrooms: 1 bedroom
- Median Property Price (1 bedroom): RM545,000
- Airbnb Annual Revenue: RM40,067 ($8,575)
- Gross Rental Yield: 7.65%
- Total Airbnb Listings: 1,372
- Best Number of Bedrooms: 2 bedrooms
- Median Property Price (2 bedrooms): RM380,000
- Airbnb Annual Revenue: RM36,684 ($7,851)
- Gross Rental Yield: 9.65%
- Total Airbnb Listings: 1,595
- Best Number of Bedrooms: 2 bedrooms
- Median Property Price (2 bedrooms): RM230,000
- Airbnb Annual Revenue: RM36,212 ($7,750)
- Gross Rental Yield: 15.74%
- Total Airbnb Listings: 3,448
- Best Number of Bedrooms: 2 bedrooms
- Median Property Price (2 bedrooms): RM340,000
- Airbnb Annual Revenue: RM28,044 ($6,002)
- Gross Rental Yield: 8.25%
Source: Airbtics Dashboard
A Quick Guide to Find Out the Best Locations to Invest in Airbnb
Identifying promising rental markets can be a time-consuming endeavor. That’s why it’s wise to leverage advanced resources available to property investors to hasten this process.
First, go ahead and explore real estate forums and conduct research on search engines to discover which locations are piquing significant interest among investors. This approach will allow you to sort your list. You should also utilize analytical tools to identify profitable STR markets, especially those that provide dynamic data.
Airbtics Dashboard allows users to explore a city and gain valuable insights, such as important Airbnb KPIs, to simplify their investment research. This dashboard provides users with precise data sets that showcase metrics such as average revenue, occupancy, nightly rates, seasonality, and more.
Sometimes, your target location might not appear in the search results, but you can easily create your own custom market.
Now that you have a clearer perspective of your target market. Feel free to experiment with the filters to identify the results that fit your needs. You can use filters to find what type of property offers the most appealing profit in your chosen area.
One of the greatest advantages of dynamic data is that if you move and zoom in and out of your map, the data will also change accordingly.
You can repeat this process until you find which property type makes a sound investment choice in your target area. By comparing data across various property types, you can pinpoint the option that aligns best with your preferences and goals.
Malaysia’s Property Landscape: A Strategic Outlook for Thriving in the Airbnb Market
Malaysia stands as a captivating investment destination with its diverse cultural tapestry, booming tourism industry, and advantageous real estate market. The nation’s Airbnb landscape is thriving, presenting an enticing prospect for property investors seeking to venture into the lucrative short-term rental market.
We explored the pros and cons of investing in Malaysian property, highlighting the country’s appeal as a trending Airbnb destination. Malaysia’s affordability, coupled with its growing economy, positions it as an attractive option for property investments. However, for foreigners, the revenue may not be as captivating compared to other major investment destinations. Yet, considering Malaysia’s low cost of living, Airbnb can be a profitable investment business that can help individuals and families to sustain their economies.
In the dynamic world of real estate investments, staying informed and leveraging available resources is crucial. Whether in Malaysia or other promising locations, we encourage property investors to conduct thorough research so as to not miss better opportunities as they must consider factors like market trends, legal requirements, and potential returns. And Airbtics is here to help you make data-driven decisions with accurate metrics! Ultimately, a well-informed approach, coupled with strategic decision-making, can unlock the doors to successful property investments!
Short-Term Rental Data
Short-Term Rental Data
-
Quick Links
Annual Airbnb Revenue in Providence rhode island, USA
Providence, Rhode Island| Airbnb Market Data & Overview | USA Providence, Rhode Island Airbnb Market Data & Overview USA Is it profitable to do Airbnb …
Top Property Management Companies Cancún mexico
Top 15 Property Managers in Cancún, Mexico Top 15 Property Managers in Cancún, Mexico Last updated on: 5th July, 2024 This list aims to provide …
Annual Airbnb Revenue in Eufaula oklahoma, USA
Eufaula, Oklahoma| Airbnb Market Data & Overview | USA Eufaula, Oklahoma Airbnb Market Data & Overview USA Is it profitable to do Airbnb in Eufaula, …
Annual Airbnb Revenue in Santa fe new mexico, USA
Santa Fe, New Mexico| Airbnb Market Data & Overview | USA Santa Fe, New Mexico Airbnb Market Data & Overview USA Is it profitable to …
Annual Airbnb Revenue in Lakewood colorado, USA
Lakewood, Colorado| Airbnb Market Data & Overview | USA Lakewood, Colorado Airbnb Market Data & Overview USA Is it profitable to do Airbnb in Lakewood, …
Annual Airbnb Revenue In Jakarta Indonesia
Jakarta| Airbnb Market Data & Overview | Indonesia Jakarta Airbnb Market Data & OverviewIndonesia Is it profitable to do Airbnb in Jakarta, Indonesia? What is …