A RM500K condo in Bukit Bintang rents long-term at RM2,200/month. The same unit on Airbnb lists at RM200/night. At 60% occupancy, that is RM3,650/month — 66% more gross income. This is the pitch that drives property investors toward short-term rentals. And the gross number is not wrong. But gross is the only number where Airbnb wins cleanly.
Once you subtract cleaning fees, platform commissions, higher utility bills, furnishing costs, management time, and regulatory risk, the net yield gap shrinks dramatically — and in many cases reverses. The question is not which strategy earns more gross income. It is which strategy puts more cash in your account after every real cost, every vacant night, and every potential fine.
The Legal Landscape — Can You Airbnb in Malaysia?
Malaysia does not have a national law explicitly banning or permitting short-term rentals. The regulatory framework is fragmented across multiple layers:
Strata management by-laws. Individual condominiums can restrict or ban short-term rentals through their Management Corporation (MC) by-laws. A growing number of KL and Penang condos have passed by-laws prohibiting stays under 30 days. If your MC has such a by-law, operating an Airbnb is a breach that can result in fines, legal action, or both.
Service residences vs condominiums. Properties classified as "service residences" or "serviced apartments" generally allow short-term stays because they were designed and approved for transient accommodation. Condominiums classified as residential may face restrictions. Check the development's title category and MC rules before committing to an Airbnb strategy.
Local authority licensing. Some local councils (DBKL in KL, MBPJ in Petaling Jaya, MPPP in Penang) have introduced or proposed licensing requirements for short-term rental operators. Compliance requirements vary and enforcement is inconsistent — but the trend is toward more regulation, not less.
Tourism tax. Operators of short-term accommodation are technically required to register with the Malaysian Commissioner of Tourism and collect tourism tax (RM10/night for foreign guests). Most individual Airbnb operators do not comply. This is a regulatory risk that could result in back-dated assessments if enforcement tightens.
The practical reality: Thousands of units across Malaysia operate as Airbnbs with minimal enforcement. But "everyone does it" is not a risk mitigation strategy. A single MC by-law amendment or local council crackdown can make your short-term rental strategy non-viable overnight.
Revenue Comparison — The Gross Numbers
For a RM500,000 condo (1,000 sqft, 3 bedrooms) in an established KL location:
| Metric | Long-Term Rental | Airbnb |
|---|---|---|
| Monthly rate / nightly rate | RM2,200/month | RM200/night |
| Occupancy | 11 months/year (1 month vacancy) | 60% average (219 nights/year) |
| Gross annual revenue | RM24,200 | RM43,800 |
| Gross yield | 4.84% | 8.76% |
At the gross level, Airbnb generates 81% more revenue. The 60% occupancy assumption is realistic for well-managed listings in prime KL locations — data from AirDNA and similar platforms shows KL averages between 55-65% for professionally managed units. Tourist areas like Bukit Bintang and KLCC trend higher; suburban locations like Bukit Jalil or Cheras trend lower.
Airbnb gross revenue can be 60-100% higher than long-term rental income on the same property. But gross revenue is a vanity metric. The operating cost differential is where the story changes.
Cost Comparison — Where Airbnb Gets Expensive
This is the table that Airbnb enthusiasts rarely build before buying:
| Cost Item | Long-Term (Annual RM) | Airbnb (Annual RM) | Notes |
|---|---|---|---|
| Furnishing (amortized over 5 years) | 2,000 | 6,000 | Airbnb needs hotel-quality furnishing, full kitchen setup, linens |
| Cleaning | 0 | 8,760 | RM40/clean x 219 turnovers (assuming average 1-night = 1 clean) |
| Platform commission | 0 | 1,314 | Airbnb host-only fee: 3% of booking value |
| Utilities (electricity, water, internet) | Tenant pays | 4,800 | RM400/month — host pays all utilities for short-term stays |
| Linen & consumables replacement | 0 | 2,400 | Towels, bedsheets, toiletries, kitchen supplies |
| Property management / co-host | 0 | 8,760 | 20% of gross revenue if using a co-host service |
| Insurance (short-term rental rider) | 0 | 1,200 | Standard home insurance may not cover transient guests |
| Agent fee (tenant sourcing) | 2,200 | 0 | 1 month rent per new tenancy |
| Maintenance & repairs (above normal) | 500 | 2,400 | Higher wear from frequent guest turnover |
| Total operating costs | 4,700 | 35,634 |
Net Yield — The Real Comparison
Now subtract operating costs from gross revenue:
| Metric | Long-Term | Airbnb (Self-Managed) | Airbnb (Co-Hosted) |
|---|---|---|---|
| Gross annual revenue | 24,200 | 43,800 | 43,800 |
| Operating costs | (4,700) | (26,874) | (35,634) |
| Net revenue before financing | 19,500 | 16,926 | 8,166 |
| Net yield (on RM500K) | 3.90% | 3.39% | 1.63% |
The long-term rental nets RM19,500/year at 3.90% yield. Self-managed Airbnb nets RM16,926 at 3.39%. Co-hosted Airbnb — the realistic option for investors who do not want to manage guest communications, check-ins, and cleaning coordination themselves — nets a meager RM8,166 at 1.63%.
Self-managed Airbnb comes close to long-term rental net yield, but requires 15-20 hours per week of active management: responding to guest inquiries, coordinating cleaners, handling check-in issues, managing reviews, restocking supplies, and dealing with the occasional problem guest. That time has a value.
Co-hosted Airbnb — where you pay a management company 20% of gross — barely covers financing costs on most properties. The 8.76% gross yield compresses to 1.63% net, which is below the current fixed deposit rate.
The bottom line: for a RM500K condo in KL, long-term rental delivers better net cashflow than Airbnb unless you are willing to self-manage and can sustain occupancy above 65%.
The Seasonality Problem
Long-term rental income is predictable: RM2,200 arrives every month. Airbnb revenue follows a seasonal curve that varies significantly by location:
Peak seasons (higher occupancy, higher nightly rates):
- Chinese New Year (January/February)
- School holidays (March, May/June, November/December)
- Major events (F1, concerts, conferences)
- Year-end holiday season
Low seasons (lower occupancy, rate pressure):
- February-March (post-CNY lull)
- September-October (minimal tourism drivers)
- Ramadan period (variable dates, reduced domestic travel)
In KL, the difference between a peak month and a trough month can be 40-80% in revenue. A unit earning RM5,000 in December might earn RM2,000 in September. This volatility makes cashflow planning difficult — particularly if you are servicing a mortgage that demands the same installment every month.
Long-term rental income does not fluctuate with tourist seasons, school holidays, or the conference calendar.
Popular Airbnb Locations in Malaysia
Not every location supports short-term rental demand. The viable Airbnb markets in Malaysia are concentrated:
| Location | Guest Profile | Average Nightly Rate (RM) | Avg Occupancy | Key Risk |
|---|---|---|---|---|
| KL — Bukit Bintang / KLCC | Tourists, business travelers | 180-350 | 60-70% | MC restrictions increasing |
| KL — Bangsar / Mont Kiara | Expats, medical tourists | 200-400 | 50-60% | Premium furnishing expected |
| Penang — Georgetown | Tourists, digital nomads | 150-280 | 55-65% | Heritage zone regulations |
| Johor Bahru | Singapore day-trippers, business | 120-200 | 45-55% | Lower demand depth |
| Melaka | Weekend tourists | 130-250 | 40-55% | Heavy weekend bias, weak weekdays |
| Cameron Highlands | Domestic tourists | 150-300 | 50-65% | Seasonal, limited pool |
| Langkawi | Resort tourists | 200-450 | 45-60% | Duty-free zone competition with hotels |
Bukit Bintang and KLCC are the highest-volume Airbnb markets in Malaysia. The concentration of tourists, business travelers, and medical tourists creates year-round demand. But this is also where MC restrictions are spreading fastest — several major condos in the KLCC area have already banned short-term stays.
The Hybrid Approach
Some investors attempt a middle path: long-term rental for 9-10 months, Airbnb during peak demand periods (December, CNY, major events). In theory, this captures the base income stability of long-term rental plus the premium pricing of short-term during high season.
In practice, it is messy:
- Most long-term tenancy agreements in Malaysia run for 12 months with a 2-month deposit. You cannot ask a tenant to vacate for December and return in January.
- Furnishing requirements differ: long-term tenants bring their own furniture; Airbnb guests expect a fully equipped unit. You would need to maintain Airbnb-grade furnishing year-round.
- Tenant quality: the kind of tenant who accepts a 10-month lease with a mandatory break clause expects a discount — eroding your base rental income.
The hybrid model works better for units in dedicated service residences where the operator handles the switching between long-stay and short-stay modes. For individual condo investors, pick one strategy and commit.
Risk Assessment — Why Long-Term Often Wins
Beyond the net yield numbers, the risk profiles of the two strategies differ fundamentally:
Regulatory risk. An MC by-law change can end your Airbnb operation with 30 days notice. Long-term rental is never at risk of being prohibited — it is the intended use of residential property.
Neighbor complaints. Frequent guest turnover, noise, unfamiliar faces in lifts — these generate complaints that escalate to MC action. A single persistent complainant can trigger a by-law vote. Long-term tenants are neighbors; Airbnb guests are strangers passing through.
Platform dependency. Your Airbnb income depends on Airbnb's algorithm, review system, and commission structure. A policy change, a bad review, or an algorithm shift can cut your visibility and bookings overnight. Long-term rental depends on a bilateral contract between you and one tenant.
Insurance gaps. Standard home insurance policies often exclude coverage for short-term rental use. Airbnb's host protection insurance has limits and exclusions. A guest causing significant damage or injury can create liability exposure that your existing insurance does not cover.
Tax complexity. Short-term rental income may trigger business income classification (rather than rental income), which changes your tax treatment. Business income is subject to different deduction rules and potentially requires business registration. Long-term rental income taxation is straightforward and well-established.
For the majority of Malaysian property investors — particularly those with a single investment property who want predictable monthly cashflow — long-term rental is the lower-risk, higher-net-yield strategy. The numbers confirm what the risk assessment suggests.
Airbnb can outperform in specific scenarios: purpose-built service residences in prime tourist locations, self-managed by operators who treat it as a business rather than passive income, with no MC restriction risk. For everyone else, the siren song of double-digit gross yields masks a net reality that rarely beats a good tenant on a 12-month lease.
Model the full cost stack for your specific property using our cashflow calculator, and understand where your gross yield actually lands after deductions — our breakdown of gross yield vs net cashflow applies to both rental strategies. If you are still deciding between property types, our comparison of condo vs apartment vs flat covers which formats work best for each rental strategy.
All figures in this post are based on publicly available information and market data as of February 2026. Airbnb occupancy rates and nightly rates are estimates based on third-party data platforms and may vary significantly by property and season. Consult a tax advisor regarding income classification for short-term rental operations.