LANDLORD guide (Checklist before renting)

Do you own any property? Have you rented your property? How did you do it? 


I am no expert but having been in the real estate industry as a Senior Real Estate negotiator for 4+ years now, I do have some tips to share on real estate. There will be a series on Landlord guide, Tenant guide, or relevant information on real estate in Malaysia. Follow me on my blog if you want to know more. Feel free to leave your comments if you need me to respond to your queries. I'll try my level best to answer your queries.


(Note : All contents shared are my personal observations & experiences,  without prejudice to my rights).

Check list before renting:

• Do survey on market rental rates on the property prior to renting it out. 
• Why? So that you do not out-priced or under-value your asset that is going on rent. 
• If you out-price yourself, then it will take a longer time for it to be tenanted unless the renovation, design & furnishing can justify the higher rental. 
• Should your rental be too low/lower, when you do decide to sell it, your property will generate lower demand as the yield may not be attractive enough for investors.

• Decide if you want to use an agency to manage the rental for you or to do it by yourself? 
• If you decide to go on your own, do ensure you can allocate time to show potential tenants. Also, be knowledgeable about market demand, available amenities that could potentially seal the deal eg. near school/universities, bus/rail station, mall, etc.
• If you do engage an agent, the agency fee is 1 month's rental and 6% GST (government sales tax). Preferably, if it is a furnished unit, to engage an exclusive agent (i.e. sole agent) to focus fully on the unit. That way, only the agent is accountable for any damages or lost of items. If you give it to too many agents, you wouldn't know who is accountable or who to blame. Although the chances to rent it out is higher if your spread it to many agents (afterall it IS a number game) but the type of tenant you want may not be of the right quality. Some agents are merely interested in their reward.
• Do 'interview' the agent to ensure he/she is familiar with the location or building (condo/apartment). Ask where are their area of focus. Ask how, what & where will they market it. Ask what will they do when they found potential tenants. Ask when does their responsibility ends just so you know their level of service.

• Are you renting it fully furnished, partially furnished or unfurnished? Note ~ rental prices differs accordingly.
• If you are renting to students, it is best to keep things simple and inexpensive as they will not (most of them) take care of the items. Local tenants would prefer basic unit as they will bring their own stuff. Foreign students would prefer furnished condos as they would rather not buy anything since their stay is short. Between 1-4 years depending on their course. Air-conditioners (ACs) should be optional unless otherwise requested. Then rental can be adjusted. Most students would prefer a unit with fridge & washer as they mostly cook their own meals and wash their own clothes.
• The more essential items you put in for the tenant's convenience, the higher the rental you can ask for.
• Be prepared to incur some cost to refurbish damage/worn out items due to wear and tear as well as damages not forgetting the occasional new coat of paint as well.

• Decide what kind of tenants you are looking for : family/ working adults / students / corporate/ expats?
• Corporate clients are prompt paymasters as the company will bank in directly into your account. Likewise most expats, family and working adults. Students tend to be tardy but they will pay eventually for fear of eviction due to non payment. Normally, lower income group can be testy so do be wary.

• Type of furnishing depends a lot on what type of tenants you want to rent your property to:
• students ~ basic needs & inexpensive furnishing
• Expats / corporate clients ~ good to high end furnishing. Oven is a must as they cook & bake in ovens unlike Asians. Likewise ACs. Some might even request for hot water taps for dish washing due to hygiene purposes. Otherwise, buy them a dishwasher!
• Family ~ with small kids, preferably no glass tables or easy to break items. Study tables & chairs essential for family/corporate & expats tenants. Safety is top priority for family with young children particularly condos or houses with gardens & patios on top floors or with a swimming pool.

• Do ensure you screen your tenants or get an exclusive agent to handle the screening for you :
• this is to avoid bad paymaster. Sometimes from your screening, you can 'smell' if they will be good tenants or not.
• ensure that they are working at what they say they are working at. Cross check and get references to substantiate it. Get proof/evidence such as offer letter, work permits/visa, etc.
• Check validity of passports & visas.

• Unit to be rented to be clean & liveable condition for viewing:
• simply put, "do unto others what you want others to do unto you!" If you are a hoarder, then you do what most people would do when they rent their unit out. And note...you need to change your bad habits...ever heard of recycling? You get to earn something in return, so why hoard???! 

• Allocate Timing for viewing appointments
• Try to allocate ample time for viewing and negotiation between appointments. Half hour to 45 mins is a good gap. That is if you are doing it yourself.
• Not advisable to have few potential tenants to view all at once.
• If you are there when your agent brings the client, try not to negotiate anything. Leave it to the agent to do his/her job. It gives you room for negotiation else you may kill the deal or make promises you may regret later.

• Do secure earnest deposit/advance rental, security deposits and utility deposits before allowing tenants to move in :
• standard practice in Malaysia is 1 month advance rental, 2 months security deposit & half month utility deposit (the latter two refundable at the end of tenancy)

• Ensure all electrical appliances/items are in working condition :
• ACs to be serviced, unit thoroughly clean a day or two before tenant moves in. Broken/ spoilt items to be replaced

• MUST ensure there is a tenancy agreement :
• This is to avoid any misrepresentation or disputes later on. Also, get it stamped to legalise the document. In the event of dispute and if it is taken to court, the agreement is legal. Or else, it cannot be submitted to court as evidence.
• All utility bills to be paid-to-date :
• This is to avoid dispute with new tenant. Also ensure meter readings are carried out for water and electricity.

Finally, you see the serious side of me! ( Seriously!! I can read minds) Hah! When I work I am serious else your clients or bosses will think you are NUTS!. Plus this is serious matter, correct? But, I always inject a little humour in all that I do. Why take life so seriously? This way, I put my clients/friends at ease and more willing to share their concerns, likes & dislikes.

So, drop me a line if you have something I have omitted to mention or wait for the next blog to know if I have answered your burning question. Oh...don't let it burn..it might be 3rd degree burn and then BOOM....your brain is fried!!! hahaha...oops, bad joke. Ok, Ok...I hear you. Apology for lame joke.

Till the next Landlord guide...let me guide myself to bed to recollect more information to share... ZZZZZZZZZzzzzzzzzzz.