The Reality Airbnb Investment

Recently I was asked about investing in Airbnb / short-term stay in Melaka.
Here’s my honest take in no hype, just reality.

1️⃣ First, about Melaka as a property market

Based on the Malaysia Property Market Report, Melaka is consistently ranked among the weakest property markets in the country because:
  • Lowest average house prices
  • Oversupply issues
  • Several underperforming / failed developments
This doesn’t mean no opportunities but it does mean higher risk and slower recovery compared to major urban centres.
A key factor is population and economic activity. Melaka doesn’t have the same depth of demand as Klang Valley, so capital appreciation and rental resilience are naturally weaker.

2️⃣ Now, about Airbnb / short-term stay risks

Short-term stay has structural and regulatory risks many investors overlook:

a) Government & state intervention

Tourism is a sensitive industry. Governments tend to protect licensed hoteliers because hospitality represents the country indirectly service quality, safety, and national image.
We’ve already seen this happen:
  • Penang: Residential units are banned from operating Airbnb after repeated complaints. The state government stepped in to regulate and control the situation.
  • Selangor: Discussions and policy talks have already surfaced around stricter controls, especially in high-density residential areas.
  • Singapore: A clear example, short-term stays in private residential properties are fully banned. No ambiguity.
Melaka can implement similar controls if complaints increase or if residential living quality is affected. Once regulation comes in, returns can change overnight.

b) Building management control (JMB / MC)

Even if the state allows it:
  • JMB (Joint Management Body) or MC (Management Corporation) can vote to allow or disallow Airbnb
  • In KL, many MCs now require huge deposits (RM50k–RM100k) to operate short-term stays. This filters professional operators and reduces noise & havoc but also kills returns for casual investors

c) Low barrier = inconsistent quality

Anyone can become an Airbnb host:
  • No clear differentiation between professional vs part-time
  • Creates friction with residents
  • Leads to complaints → regulation → shutdown risk

3️⃣ Short-term macro risks (often ignored)

Personally, I’m bullish on Malaysia tourism long term. It has been doing well over the years.
But we must acknowledge short-term shocks:
  • Tourism slowdown
  • Policy changes
  • Pandemics / lockdowns (we’ve lived through this)
Short-term stay gets hit first and hardest.

4️⃣ If you STILL want to invest in Melaka

My suggestion:
  • Landed properties > high-rise
  • If high-rise, go for larger units (better family demand)
Even then:
  • Don’t expect the same appreciation or rental yield as KL
  • Treat it as a situational or opportunistic play, not a core portfolio asset
Personally, I would still say NO for most people.

That said when stigma appears, that’s also when opportunities can arise, especially from distressed or desperate sellers. But this requires experience, capital buffer, and patience.

5️⃣ My real recommendation: KL / Selangor (especially subsale)

If your goal is certainty + risk management, sub-sale in Klang Valley wins.
Why?
  • You know the actual transacted prices
  • You know rental rates
  • You know who your neighbours are
  • You know how much others bought, sold, and rented
  • You can calculate your exact instalment
You can compile real data and make informed decisions, not projections.
Compared to new launches:
  • Less marketing fluff
  • Less unknowns
  • Higher certainty
Honestly, you shouldn’t lose money in sub-sale unless you:
  • Overpay
  • Or don’t do your homework

6️⃣ Simple framework to make informed decision (quick steps)

  1. Get your intent right — own stay or invest
  1. Know how much loan you can qualify for
  1. Within that budget, view at least 20 projects
      2. (Yes, 20. Patterns will reveal themselves and you will learn along the way. Collect and look at the data)

7️⃣ Golden rule of investing

DO NOT invest in things you do not understand.
Understand the rules of the game.
Then take calculated risks, not emotional ones.
I’ve been in the property market since 2018 and have successfully built portfolios within our community.This is not advice, just my 2 cents from real experience.
As usual, I’ll be announcing personal finance coaching for 2026 soon likely opening for a month in KL. If you want to meet, ask questions, clarify doubts, or walk through your numbers, I’m always happy to share and guide where I can. Stay tune.

Sat Nam 🙏