As the cost of living in Malaysia continues to rise, many individuals are looking for ways to generate passive income. One approach that’s become popular is to become a landlord and rent out properties. However, owning and putting up a property for rent cannot guarantee a steady stream of income.
To be successful in this venture, landlords need to have a solid rental strategy in place.
In this article, we explore four rental strategies that can help landlords increase their passive income.
4 Effective Strategies for Increasing Passive Income
1. Switch to Short-term Vacation Rentals
Offering short-term vacation rentals are one of the most popular rental strategies to generate a passive income. This is because, with the rise of platforms like Airbnb, it’s easier than ever to turn your property into a vacation rental.
All you need to do to succeed is to make your property stand out by providing high-quality amenities, such as:
- Comfortable bedding
- Modern appliances
- A well-stocked kitchen
However, turning your property into a short-term rental can be challenging. For instance, you’ll need to constantly ensure your unit is clean and habitable whenever you have a new tenant.
Additionally, advertising your unit effectively and consistently to secure a steady stream of occupants can be expensive and time-consuming.
One way to alleviate the time and effort required to manage a short-term rental is by hiring a property management company. They have the expertise to take care of everything, from advertising and booking to cleaning and maintenance, allowing you to enjoy the benefits of passive income without the added stress.
Therefore, while this option comes with a cost, it is worth it for landlords who cannot manage their property themselves.
2. Offer Long-term Leasing
Another rental strategy to generate a passive income is long-term leasing. This involves renting out your property for an extended period, usually a year or more. However, finding reliable tenants willing to commit to a long-term lease agreement can be challenging.
One way you can attract potential renters is by working with a real estate agent. They can help you promote your property to a wider audience and screen potential tenants. Furthermore, once you’ve found a tenant, it’s essential to maintain a good relationship with them. This means responding to their needs and concerns and promptly addressing any maintenance issues.
By providing good customer service, you can increase the chances of your tenants renewing their lease, which means a steady source of income for you.
Read More: Home Inspection Checklist: What to Ask and Inspect
3. Renting Out Each Room In Your Unit
Renting out individual bedrooms within a unit is a popular strategy for generating passive income, especially in cities or areas with high demand for affordable housing. With this approach, landlords rent out each bedroom in a unit to a different tenant, rather than renting the entire property to a single tenant or family.
Doing so allows them to earn more income from a single unit. It also provides an affordable housing option for renters who cannot afford an entire apartment on their own. However, landlords must first establish clear ground rules for their tenants. This may include rules regarding noise levels, cleaning responsibilities, and shared use of common areas.
It’s also essential to set clear expectations around payment, including the monthly rent and any additional expenses, such as utilities or internet service. Moreover, landlords should carefully screen potential tenants to ensure they are a good fit and can coexist harmoniously with other tenants in the unit.
4. Rent to Students
Lastly, renting to students is another rental strategy that can be highly profitable. This is because students typically rent for the academic year, resulting in a high occupancy rate. Thus, it provides landlords with a steady stream of passive income without constantly searching for new tenants.
However, it’s important to be flexible and understanding when renting to students as many of them are often first-time renters and may have limited budgets.
Read More: Sublet: What to Do if Your Tenant Sublets Your Property
Renting with Rumah-i
If you’re a landlord looking to generate a steady stream of passive income, Rumah-i can help. Download our Home Renting App on Google Play or the App Store to start listing your property for free!
It helps landlords:
- Easily manage their rental properties, including advertising vacancies, screening tenants, and more.
- Connect with potential renters who are looking for properties in their area.
- Access valuable resources and tools to help them succeed as landlords.