Top Cities in Malaysia with the Highest Rental Yields

Jun 18, 2025

Rental yield is a significant indicator that property investors must use to gauge returns in their investments. In Malaysia, the general property sector has experienced various setbacks in recent years, but this has not stopped the strong rental returns that continue to be available in specific cities in the country, where it is much desired by either a local or overseas investor.

This blog reveals the best cities in Malaysia with the best rental pays in 2025 according to the market data, economic activity, the needs of the tenant, and investments.

Best Cities in Malaysia with the Highest Rental Yields

1. Kuala Lumpur

Average Rental Yield: 4% – 6%

Malaysia Kuala Lumpur, which is the capital city, is still the best place to invest in real estate. Its robust economy, city life, and expatriate population fuel the need for rented houses.

Best Areas for Yield:

Bangsar South
Mont Kiara
KLCC
Cheras

Why It Ranks High:

Considerable base of expatriates and professional tenants
Connection and infrastructure are good
High demand for condos and serviced apartments

2. Johor Bahru

Average Rental Yield: 5% – 6.5%

Johor Bahru, which borders Singapore, also has the benefit of cross-border business and tourism. It has emerged as one of the hotspots of rentals, and more so with the availability of educational areas and manufacturing areas.

Best Areas for Yield:

Nusajaya (Iskandar Puteri)
Mount Austin
Taman Molek

Why It Ranks High:

Close to Singapore
Cheap prices of houses
Increasing the education and health industries

3. Penang (George Town & Bayan Lepas)

Average Rental Yield: 4.5% – 6%

The state of Penang has a combination of heritage, tourist sites, and a great industrial base. Local professionals, students, and medical visitors are the source of the rental market.

Best Areas for Yield:

George Town
Bayan Lepas
Tanjung Tokong

Why It Ranks High:

A lot of tourism inflow
Successful electronics and manufacturing industries
Retirees and expats like it

4. Kota Kinabalu

Average Rental Yield: 5% – 6%

Kota Kinabalu is the capital of Sabah, which is developing fast as a business and tourist centre. This is particularly profitable in short-term rentals and holiday homes.

Best Areas for Yield:

Likas
Api-Api Centre
Sutera Harbour

Why It Ranks High:

The footfall of tourists is high
The rising demand for short-term rentals
The natural beauty of the place is in a burgeoning urbanisation scenario.

5. Cyberjaya

Cyberjaya is the tech city of Malaysia, which is appealing to young people, learners, and technology companies. The prices of the property here are fairly low and they have glimpsing prospects of rental.

Best Areas for Yield:

Shaftsbury Square
Tamarind Square
Lakefront Residences

Why It Ranks High:

Availability of universities and MNC offices
New trend of co-living and student housing
Smart city potential for growth in the future

Conclusion

To get the highest rental yields, investors must select a mixture of the three factors: location, property type, and tenant demand in Malaysia. Although most cities like Kuala Lumpur and Johor Bahru have remained dominant, new clusters like Cyberjaya and Kota Kinabalu offer great prospects of solid and sustainable returns.

Always do thorough market research and weigh your financial objectives, get advice regarding property locally, and then make investment decisions.