Investing, schools & living
Investing in JB: yield, supply risk and exit
Quick answerJudge JB investments on net yield, not gross: (annual rent − maintenance − assessment − quit rent − insurance − repairs − vacancy − tax) ÷ total outlay. JB has a large supply of serviced apartments, and NAPIC reports have long placed Johor among the states with the most unsold units, so rental competition is stiff. Pick real tenant demand (near RTS / checkpoints, industrial zones, universities, hospitals), estimate rent conservatively and plan your holding period and RPGT.
30-second summary
- Look at: Net yield, not gross
- Main costs: Maintenance, taxes, repairs, vacancy, rental tax
- Supply risk: Large serviced apartment supply
- Tenants: Singapore commuters, industry, students, medical staff
- Foreigners: 30% rental tax; 30% RPGT within 5 years
- Exit: Resell to locals? To foreigners (above the floor)?
Gross vs net yield
| Example: RM800k condo (local buyer) | Per year |
|---|---|
| Rent RM2,800 × 12 | RM33,600 |
| Gross yield | 4.2% |
| Less: maintenance + sinking fund | RM4,800 |
| Less: assessment + quit rent + insurance | RM1,500 |
| Less: repairs and furniture replacement | RM1,500 |
| Less: 1 month vacancy | RM2,800 |
| Net rent (pre-tax) | RM23,000 |
| Net yield (on price) | about 2.9% |
With a loan, deduct interest too; foreign owners also pay 30% rental tax. Many "6% yield" claims are gross or guaranteed returns.
Supply risk
- JB (especially the city centre and Danga Bay) has many serviced apartments; when several projects in one area complete together, rents fall and vacancies lengthen.
- NAPIC reports have long placed Johor among the states with the most overhang (unsold completed homes), especially serviced apartments.
- Demand near RTS is strong, but new supply is concentrated there too.
What is more resilient?
- Walking distance to RTS / checkpoints, or direct buses
- Near industrial zones, hospitals or universities (steady tenants)
- Well-managed projects with healthy sinking funds
- Practical layouts (2–3 bedrooms), not only studios
- Enough parking
- Actual transacted rents nearby, not asking rents
Exit strategy
- Who will buy it? Below RM1 million, foreigners generally can't buy, so resale is mainly to locals.
- When to sell? Foreigners pay 30% RPGT within 5 years, 10% from year 6; locals 0% from year 6.
- Fallback: the safest investment is one you'd happily live in if it doesn't rent.
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Frequently asked questions
What rental yield do JB condos give?
It varies widely by project, location and management. Deduct maintenance, taxes, repairs, vacancy and rental tax and look at net yield, not gross.
Is JB property oversupplied?
Serviced apartment supply is large, and NAPIC reports have long placed Johor among the states with the most overhang; some areas face stiff rental competition.
Will homes near RTS rent out?
Demand is strong, but so is new supply nearby. Compare actual transacted rents and the number of competing projects.
What should foreigners investing in JB watch?
The RM1m floor, 8% stamp duty and state levy, 30% rental tax, 30% RPGT within 5 years, and whether you can resell to foreigners later.