What must you know before renting your property out?

This post is contributed by Fauzi from Life In Me. (Original article: Renting a Property – First Step)

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Renting a house is not as easy as ABC. Couples of things to consider:

First, you have to think who you want to rent to. Who is your targeted tenant? Are you looking for a families, college students, single, expatriate or company..

The best tenant target would be company or expatriate as rest assured, the payment timing is sharp as normally company or expatriate via hiring company will do a standing instruction to your bank account at the pre determined date every month. So, less hassle for you to chase your tenant should there be any delay.

Renting to a company and expatriate will normally expose to potential higher rental rate. Some of my friend who owned condominiums in Hartamas fetched a reasonable above market value for fully furnished units.

Related with targeted tenant, you may want to consider to rent it as basic (without any furniture), partly furnished (with some necessities, furniture, normally, kitchen cabinet with hob as well as 1 unit air-conditioner at master bedroom) or fully furnished (with completed furniture in all bedrooms, living hall, dining hall and kitchen).

Anyway, the rental may be differ base on the criteria. If you invested RM10,000 for fully furnishing, it is advisable to add another RM400 to RM500 into rental considering 2 years rental contract.

Second, how to advertise your unit. Nowadays, with speedy technological and informative environment, we could have an access to couples of free website like rumahsewa.com or the best is mudah.com.my. I experienced a very good moment using mudah.com.my when I advertised my condo unit in Johor Bahru. The unit has been rented out within less than 2 weeks from the advert date. And to my liking it was free.. πŸ™‚

Third, how you choose your tenant. This is a real head ache. You do not know anyone so to speak when you first met them while viewing your property. Anyway, we could base on few tips.

By appearances… When you talk to people, try to judge the way they speak, their professionalism and their appearances, whether neat and tidy. Ask their profession, ask their company contact number and business card. And how long they want to rent the property..? Who will they bring to stay with..?
If you deal with an agent, let the agent bring the potential tenant together. Interview your potential tenant. Ask where they rent before and ask for previous landlord contact number. If possible, call the company they work to confirm their job designation. So you don’t have to worry their capability to pay the rent. Call their previous landlord to make sure their rental payment pattern before. This is just a basic process to make sure you choose the right tenant… :).

And don’t forget to politely negotiate with them the rental rate. Do not fall in the trap of loose negotiation. Remember, we, as a landlord are doing business. Our property is our business and business must be profitable. Do not rush to close the deal.

Don’t worry, give them a fair statement by saying, you want to finalize all potential tenant first. Give a time line to finalize who you choose. At the end of selection, notify the rest of interested tenant with nice comfort word, so that you are not burning the bridge with them. Who knows they will be your tenant in your next property..

Forth, after you choose your tenant, now it is time to get the deposit. Normally, the deposit consisted of 2 months rental deposit + first month rental. Then, request for utilities deposit as well, normally a month rental. The deposit will make you sleep in sound, in case there will be any delay in future monthly payment along the way and when the contract ends, should be any outstanding utilities amount, could be settled using the deposit..

And hey, the deposit will be good enough for you to start thinking to find another quality property.. πŸ™‚

Fifth, legal side.. You may want to make it as formal agreement with advice from appointed lawyer, and make an agreement to be stamped as well. This is good as if there is any breach of contract, you are protected by law. Get a lawyer won’t cost you a bomb. It could be as low as couple of hundreds ringgit only depending on your property type and rental.

Some more, make it look like a professional dealing.. πŸ™‚
Remember, renting a property is a serious business.. πŸ˜‰

 

About The Author

ongkl

Coming from a humble little town named Tangkak in north Johor state of Malaysia, I am so lucky to have chances to learn and work both in Johor Bahru and Singapore – a conurbation with 6.49 million still fast growing population – since year 1996. Hope now I can have a chance to contribute back to the community by sharing what I see, what I know and what I learn in this wonderful place.

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