Young Malaysians turn to ‘rent-vesting’ to enter property market early

Mar 5, 2026

A GROWING number of young Malaysians are choosing to rent the homes they live in while buying investment properties in other states, a strategy known as “rent-vesting”, according to new insights released by property group Juwai IQI.
Juwai IQI co-founder and group CEO Kashif Ansari said the approach reflects a shift in mindset among younger buyers seeking flexibility and earlier access to the property market.
“Just because you live in a rental doesn’t mean you can’t afford to own real estate.

“‘Rent-vesting’ is a way to build wealth by owning good investment properties while renting the home you live in. Some rent-vestors still live with their parents,” he said in a statement.
Rent-vesting typically involves purchasing a property in a location with strong rental yields and growth prospects, renting it out, and separately renting a home in a preferred location.
For example, a young professional may rent near their workplace in Kuala Lumpur (KL) while owning an investment property in Johor or Selangor.
Kashif said this structure allows buyers to enter the market with a smaller down payment, especially in states where property prices are lower but yields are higher.
“It gives you flexibility if you’re not ready to settle down in one place for the long term. On the financial side, it enables you to invest anywhere in the country, regardless of where you live,” he said.
He added that first-time buyers could also benefit from existing government incentives, such as stamp duty exemptions and income tax relief on mortgage interest, while these measures remain available.
However, he cautioned that certain affordable housing schemes — including PR1MA, Residensi Wilayah (Rumawip), Perumahan Penjawat Awam 1Malaysia (PPA1M) and Selangorku — generally prohibit owners from renting out their units.
Comparing the Numbers
To illustrate the potential financial impact, Juwai IQI modelled a 10-year scenario comparing a typical renter with a rent-vestor.
The assumptions include a monthly rent of RM2,000; a RM400,000 investment property; gross rental yield of 6.36%; a RM360,000 mortgage at 4% interest over 30 years; and 100% occupancy and no additional expenses factored in.
Under this scenario, a renter would spend about RM240,000 over 10 years with no asset accumulation.
By contrast, a rent-vestor would incur combined rent and mortgage payments, but rental income from the investment property would lower net housing costs to roughly RM192,000 over the same period — about 20% less than a pure renter.
Over 10 years, the rent-vestor could also build more than RM260,000 in accumulated equity and capital gains, assuming steady appreciation.
“Renters pay money out every month but build no equity. If they’ve invested wisely, rentvesting can help them build financial security,” Kashif said.
Location is Key
Kashif stressed that location plays a decisive role in determining whether the strategy succeeds.
In prime areas of KL, gross rental yields typically range between 3% and 4%, often comparable to or below prevailing mortgage rates. In such cases, investors rely more heavily on capital appreciation than rental income.
In contrast, parts of Johor and Perak offer gross yields of 5% to 6%, which may generate rental income that more comfortably offsets financing costs.
Recent state-level data also show divergence in price growth. Johor recorded house price growth of over 5% in 2024, compared to around 2% in KL, while Penang saw growth of approximately 3%.
“In different states, property prices increase at different rates. Choose an area with high price appreciation, high yields, low vacancy and low new supply,” Kashif said.
In KL, rental yields range between 4% and 6%, while Johor Bahru stands out with stronger recent price growth of 5.3%.
Kashif said younger Malaysians appear increasingly focused on accelerating wealth accumulation, even if that means separating where they live from where they invest.
“Young people today seem even more eager to get ahead quickly than their parents’ generation. One thing hasn’t changed, though. Investing wisely is the surest way to build your wealth.
“Remember what they say: ‘Sikit-sikit, lama-lama jadi bukit’ (Small amounts, when accumulated consistently, eventually become something big). Rentvestors seem to have taken it to heart,” he said. — TMR