The day you collect the keys to your new property is definitely a significant day in your life, especially if it’s your first property. Now, you will wish to fasten the renovation process and get it rented out immediately so you don’t have to bear your loan instalment. However, do keep your expectations lower as renting out your properties can be challenging. We will share with you in this article on a few tips which may be useful for you before and after renting out your property!
Before renting out your property
#1 Survey around the properties around your area to determine a fair market rental price that you should charge your tenant. If your property is a condo, you can easily ask your neighbours.
#2 Do survey if your property is in an area where unfurnished or furnished units are highly sought before you proceed with any renovation.
#3 While engaging a property agent to help you find a tenant, you should also advertise your property on all available online platform. A few of the popular sites are Mudah, Speedrent, ibilik and Hostelhunting. It would be favorable if you are able to find a tenant through these sites as they only takes a % cut of your 1st month rental income or even none. On the other hand, property agents generally charges you the whole 1st month of rental income.
#4 Screen your potential tenant carefully – after all, this person is a stranger! Below are a few steps you can consider:
a) Get to know more about your tenant’s background, employment status, current address and more.
b) You may call his/her previous landlord to understand him/her more as a tenant.
c) You may call his/her employer to verify on the employment details given to you.
d) You may obtain a free credit report on your potential tenant through CTOS to ensure he/she is free from any litigation & bankruptcy.
#5 Ensure you protect your rights with a Rental Agreement. The cost of the rental agreement is usually borne by the tenant. The market price charged by property agents or lawyers to draft a rental agreement can reach up to a good RM 700. However, you are actually allowed to write your rental agreement. All you need to do is to get the agreement stamped at LHDN which will cost your tenant less than RM 100/tenancy year. Exact calculation can be found here.
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After renting out your property
#1 Always ensure to increase your rents to keep up with inflation. Otherwise, this will hinder your property from appreciating in value which eventually affects your Return on Investment (ROI) upon selling your property.
#2 There must be a line between your relationship with your tenant. As a landlord, you have to be all ears to their request but you must also not be afraid to say NO to any unreasonable requests.
#3 Do not be stingy in keeping your property in good condition. This ensures higher occupancy and good rental income.
#4 Always request your tenants to deposit their rents into your bank account for easy collection and record keeping purpose.
#5 You have the right to inspect your property during the tenancy period. This is to ensure that your tenant takes care of your property and does not misuse the premise.
There you go! We hope that this post gives you some new insight and tips! Stay tuned for the next exciting post! On a site note, do subscribe to our site for free weekly money tips and a done for you rental agreement template!