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Rental as an investment
Guide on buying a property for rental income
Complete guide on the steps and procedures.
- Check eligibility
- Post on Carousell, Gumtree, Ohmyhome, etc
- Get HDB Approval ($18 for whole flat, or $9 per bedroom)
- Sign Tenancy Agreement & collect deposit
- Pay stamp duty to IRAS (guide) within 14 days of signing
- For HDB, register your tenants particulars
- Move in & inventory list
- Re-contract (repeat step 3-5)
Paying Stamp Duty
For every tenancy agreement, you need to stamp the document and pay the stamp duty for the lease. For more information on how to pay IRAS the stamp duty, refer to this guide.
Who can rent
- PR owner or flat under MOP cannot sublet the whole flat; but renting out bedrooms OK
- Non-malaysian Non-citizen (NC) quota for whole flat
- Max Neighbourhood 8%
- Max Block 11%
- Work Permit holders have further restrictions on their work sector. Only applicable to WP, not to others.
- Construction, marine, and process sectors must be Malaysians; other nationalities cannot rent a flat/bedroom
- Manufacturing sector must also be Malaysians, if renting whole flat; other nationalities can rent bedrooms only
- Minimum 6 months lease
- Pass must be valid for 6 months
How many occupiers
There was a change in 2024, and here are the current maximum number of occupiers.
| Sublet Flat | Max unrelated tenants |
|---|---|
| <= 2rm | 4 |
| 3rm | 6 |
| >= 4rm | 8 |
If all the occupiers are a family, that is they are related, then the max cap doesn’t apply. A foreign domestic helper counts as a family too.
Register Foreign Workers
If your tenants are foreign workers, they have to be registered with MOM. This can be done by the foreign workers or their company. If so, homeowners will receive an SMS to alert that their address is being registered.
Homeowners can also register or remove foreign workers tenants.
Income Tax
Rental income is taxed under your personal income. If the property is owned by multiple owners, then you can assign a % during declaration.
You can declare rental expenses. For simplicity, you can declare 15% of the gross rental as expense.
On top of the 15%, you can include the mortgage interests that you pay for. That is another reason why housing loan is a good debt.