As a homeowner looking to rent out your unit, a feared reality for most landlords is untenanted homes because it means negative cash flow. Thus, our renting guide for landlords aims to help you prevent that feared reality. Renters occupy most housing properties in Malaysia. Rental property is one of the most stable assets to have in your portfolio as it has little to no risks. Some benefits to owning a household include regular cash flow from tenants, real estate establishment, and tax benefits. If you’re looking for long term investment potential, buying property is the way to go and we’ve prepared a simple renting guide for landlords. Rumah-i also offers rental services that cover property makeover, management and maintenance, making renting easy for landlords.
A lot of benefits come with owning a rental unit. That said, the rental business requires a great deal of continuous hard work, as does any business. If you thought being a landlord meant easy cash flow, think again. In this article, we aim to help you to achieve your goals of being a landlord by covering some key features to ease your way into landlord-‘ship’.
1. UNDERSTAND WHAT YOU’RE GETTING INTO – PROPERTY INVESTING IS A LONG-TERM PLAY
Being a landlord is a big responsibility. To partake on this opportunity, as a potential landlord, you must first assess if you are willing to add another responsibility in your life. Being a landlord means a lot more than receiving your tenant’s rent every month. Repairs, maintenance, additional home insurance policy expenses and keeping an eye on your tenant are among the many responsibilities that come with the title of a landlord. On top of that, you are responsible for choosing the best tenant for your unit. Typically you’ll search for someone who is both responsible for their finances and can keep a clean home. It may seem like a lot, but once you welcome the tenant of your choice, it will be all worth it.
2. MAKE YOUR HOUSE A HOME
In less concentrated areas, you’ll notice it will be slightly tougher to attract renters, and this will be worse when the market is slow. During market slopes, potential tenants tend to be more picky and attentive to details in their potential homes due to the increase in the availability of rental properties. So, it’s your job to make your house as homely as possible for your future tenants. Most of the times landlords forget the most essential part of showcasing a unit – cleaning it! On a landed property, make sure to clean out the tall grass (that’s probably taller than you), while in apartments, clean up those nasty cobwebs in the corners of your ceiling. Do not underestimate the power of a gleaming, sparkling clean property to boost the energy of your housing unit- a clean house will help rein in even the pickiest of tenants.
3. MAINTENANCE? THAT’S ON YOU.
When leasing out your unit, you have to be aware that you are in charge of maintenance fees or any related property taxes. Therefore, make sure all your ducks are in a row and have a checklist ready and updated to the year you plan to rent out your unit. If you’re leasing out a fully-furnished unit, do an inventory check and change faulty items. More times than not, you tend to accept your properties flaws as the norm over time. A whole group of potential tenants may be wavered by a detail you didn’t notice (like that dim light in the hall area), and you may be wondering why you’re still tenant-less. So it’s best to bring in a pair of fresh eyes to assess your unit and point out the obvious that you may be oblivious to.
4. KNOW WHAT YOU WANT
This point is crucial for every homeowner looking to rent out their unit. When advertising your home, focus on key features that may attract the renters you want. For example, if you plan on having a long-term and stable income from your unit and plan to rent to a family, then sell the features of your house to them! If your unit is nearby a school, make sure to mention that. You have extra yard space for the family to have outdoor activities? Highlight this point. On the other hand, if you’re looking to rent out your unit to urban, fast-paced individuals cater your home description towards them. Mention the nearby public transport they can use. Talk about the malls near your unit. Picture your ideal renter and target them in your ad. Do everything in your power to attract the perfect renter to you. They may come rare, but when they do be sure to try your best and keep them interested.
5. THE PROFESSIONALS ARE ALWAYS THERE
If you’re ever feeling overwhelmed with all the laws that come with being a landlord or find yourself frustrated at the fact that you can’t secure a tenant, seek help from the professionals. For the latter, there are tons of agents everywhere ready to take on the challenge of your unit. They will help find the perfect tenant for you based on what you want all the while handling all the paperwork that may have left you dishevelled. For the former, it is important to talk to other professionals familiar with property law to make sure you are abiding by tax laws and local property rules. They could also help with landlord-tenant laws and provide assistance in drafting a lease. These professionals are great people to have around as emergency contacts in the event of something bad happening.
6. SET YOUR PRICE – KNOW YOUR VALUE
Assess the condition of your home and the furniture included (if any) and compare it to the rental prices of other units within your vicinity. Potential tenants are always on the lookout for the best deal, so be sure to set the rental rate within the competitive price of your local housing market not withholding at pointing out the most valuable aspects of your property. In this market, every square foot of your house matters as much as where your unit is located. Check with other landlords around the area and try to tailor the best competitive price you can offer for your home. That said, as a landlord, you should be open to negotiating as well. If you’re looking for a long-term, stable income be ready to haggle prices with your future tenant that may end up staying for years. On the other hand, if you’re set on your price and are not looking for a long-term commitment, be prepared to welcome in new tenants every time a contract expires.
7. FINDING THE GLASS SLIPPER- THE PERFECT TENANT
In this last and arguably most important tip, it is vital for you as a landlord, to screen your potential tenants. In some cases, you may find the feared ‘tenant from hell’ who seems to work tenaciously at making life hard for you. To evict them would take time and money. That said, with research and careful consideration, you can find a great tenant. Review the information they have provided to determine whether they would make suitable renters. Typically, you would assess if they have a stable income to see if they are responsible and earn enough money to pay rent. Check in with previous landlords and evaluate if your candidate fits your criteria. Be careful not to be too picky, though! The last thing you want is an untenanted house draining your money instead of making it.
There you have it. A quick renting guide for landlords starting their landlord-‘ship’. Always remember that beyond your property (and money) at hand, there is a genuine human value to be appreciated here.
Related Topics: Renting Guide for Tenants
The good news for you Malaysian homeowners looking to lease out their units is the massive market of millennials looking for places to rent. With increasingly soaring living costs, many studies have indicated that only 12% of millennials have expressed a want at owning their property while the rest have chosen to rent as a means of lowering their commitment. So, get ready for the rush of millennials looking for a place to rent. To all landlords out there looking for a place to start, we hope this renting guide for landlords gave you some guidance to take on your new responsibility.
Great news for those that don’t have the time to manage their own property, Rumah-i can do it for you with our excellent approach to each client and property. We ensure that your property is in good condition while helping you screen for good tenants. Although the renting guide for landlords was useful, our team at Rumah-i can help with your burdens as a property owner. Contact us today to find out more about our property management platform services.