Short-Term vs Long-Term Rental
in Malaysia (2026 Guide)

Yield figures are indicative. Actual returns depend on location, unit type, occupancy rates, platform fees and management arrangements.

Defining short-term vs long-term rental in Malaysia

In the Malaysian context:

• Short-term rental (STR): Letting a property for periods of less than 30 days per stay, typically via platforms such as Airbnb, Agoda Homes or Booking.com. The occupant is typically a tourist, business traveller or temporary visitor.
• Long-term tenancy (LTR): A tenancy of 12 months or more (sometimes 6 months minimum) under a formal tenancy agreement. The tenant has exclusive occupation of the property and treats it as their home.
• Medium-term / flexible tenancy: 1–6 month stays, often used for corporate relocation or expat transition periods. Treated like long-term for regulatory and strata purposes in most buildings.

For detailed Airbnb-specific legal analysis, see our dedicated Airbnb short-term rental legal guide and Airbnb in condos guide.

Strata by-law restrictions on short-term rental

This is the most important practical constraint for Klang Valley landlords. Under the Strata Management Act 2013 (Act 757), a management corporation (MC) or JMB has the authority to make by-laws governing the use of parcels and common property. Many KL and Selangor strata buildings have by-laws that explicitly:

• Prohibit short-term letting of residential parcels (often defined as stays of less than 30 days).
• Restrict commercial use of residential units — operating a transient accommodation business from a residential unit may be considered commercial use.
• Require tenant registration with management, which creates a practical barrier for high-turnover STR guests.

Penalties for breaching strata by-laws include fines imposed by the MC, enforcement before the Strata Management Tribunal (SMT), or injunctions. A particularly significant risk: if the MC obtains an SMT order, the owner must cease STR operations and may face cost orders. The Tribunal has dealt with a number of STR-related disputes.

Is Airbnb legal in Malaysia?

Short-term rental via platforms like Airbnb is not prohibited by federal law in Malaysia for non-strata properties. However, several layers of regulation apply:

• Tourism Tax Act 2017 (Act 791): Operators of accommodation premises — including short-term rental hosts earning above the exemption threshold — must register with the Royal Malaysian Customs Department (RMCD) and collect Tourism Tax from foreign guests (RM10 per room per night as of the current rate). Registration is via the MyTTx platform.
• Business registration: Operating a rental business (as opposed to occasional rental of a personal property) may require business registration with the Companies Commission of Malaysia (SSM) depending on scale.
• Local authority licensing: Some local authorities have introduced or are developing requirements for STR registration. Check with the relevant local council (DBKL, MBPJ, MBSA).
• Strata by-laws: As discussed above, this is the primary practical barrier for condo and serviced apartment owners.

For a full breakdown, see our Airbnb short-term rental legal guide.

Gross income comparison: STR vs LTR

Illustrative example: a 2-bedroom furnished condo in Mont Kiara (Klang Valley), 2026.

At face value, STR generates ~53% more gross income. But the costs are very different.

Operating cost comparison: STR vs LTR

Net yield: the real comparison

This illustrative example shows that once operating costs are fully accounted for, a well-run long-term tenancy can produce a higher net yield than STR in the same unit. STR outperforms LTR net-net only in high-demand, premium-location units with strong occupancy rates and competent in-house management. For most landlords — especially those who rely on external management — long-term tenancy is the financially superior choice.

Management and time burden

• Long-term tenancy: Once set up (screening, agreement, key handover), the day-to-day management is minimal — rent collection, occasional maintenance coordination, renewal. A self-managing landlord might spend 2–4 hours per month.
• Short-term rental: Guest communication (pre-arrival, check-in, check-out, reviews), cleaning coordination, maintenance response, listing management, price optimisation, guest emergencies. Without a professional co-host or management service, this is a part-time job. Even with management, the landlord remains involved in major decisions and complaints.

Tenant risk and property damage

• STR guests are unscreened strangers with no long-term stake in the property. Parties, excessive noise, damage and theft are reported risks. Platform host protection schemes (e.g., Airbnb AirCover) provide some cover but have claim limits and exclusions.
• LTR tenants can be screened before signing. A security deposit (typically 2–3 months’ rent) provides financial protection. Damage disputes are handled through the Tribunal for Consumer Claims or civil courts. See our security deposit rules guide and deposit deductions guide.

Tax treatment: STR vs LTR

Both STR and LTR income is assessable under the Income Tax Act 1967 (Act 53). Key differences:

• Long-term rental income is assessed as statutory income from rents. Allowable deductions include mortgage interest, assessment rates, quit rent, insurance and property management fees. Declared via Form B.
• Short-term rental income is more likely to be assessed as business income (rather than passive rental income) if it involves active management (check-in, cleaning, marketing). This is an important distinction — business income may be subject to different deduction rules and potentially higher effective tax under certain scenarios. See our rental income tax guide.
• STR operators also have Tourism Tax obligations under the Tourism Tax Act 2017 if qualifying thresholds are met.

Which model is right for you?

Switching between models

Some landlords switch between STR and LTR depending on market conditions. Practical considerations:

• From LTR to STR: You must wait until the current tenancy ends (or negotiate an early exit). Check the strata by-laws before assuming you can switch. Re-furnish and deep-clean to hotel standard before listing.
• From STR to LTR: The unit may have higher-than-normal wear and some furniture replacement may be needed. Have the unit professionally cleaned. Market as a long-term rental with a solid inventory list.
• Renovation for LTR: LTR-ready renovations prioritise durability over aesthetics — vinyl plank flooring, semi-gloss paint, and quality appliances that can withstand tenant use. See our refurbish rental unit cost guide.

Sources & official references

• Strata Management Act 2013 (Act 757) — by-laws and Tribunal jurisdiction: www.laws.gov.my
• Tourism Tax Act 2017 (Act 791) — Royal Malaysian Customs Department (RMCD): www.customs.gov.my
• Income Tax Act 1967 (Act 53) — Inland Revenue Board (LHDN): www.hasil.gov.my
• Ministry of Local Government Development (KPKT): www.kpkt.gov.my