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Renting Guide For Landlords
How To Rent Your
Property
The most usual way to rent a property is through estate agents. Some
landlords choose to market their properties privately to save on the
estate agents’ commission but this solution has the following
disadvantages:
- it can be very time-consuming as you will have to do all the work
yourself, including advertising and showing the property to
prospective tenants
- it may take longer to rent your house as you are likely to get fewer
viewings than by letting professionals market your property
- you may end up getting a lower rent as you are likely to get fewer
viewings and therefore less interest in your property.
- security issue as crime may happen during showing.
Selecting Estate Agents
Use several agents to market your property as this will result in your
property being more widely advertised. You will only pay commission to
the agent who actually rents the property so using as many agents as
possible will not result in higher costs. Select estate agents who
specialize in your area or property type as their client list will
have the right prospective tenants for your property.
The easiest way to find suitable estate agents is to look at
advertisements for similar properties on websites like
http://RealEstateAgent.com.my or
in the printed press (like the Star Classifieds or property magazines)
and contact the agent. Or drive around your area and look for agents’
signboards on properties for rent.
Help the Agent Help You
When giving your property details to the agent emphasize your
property’s individual selling points. Think about any positives, from
a large kitchen to an alarm system, or a good school nearby. If
possible, take digital photos of your property which the agent can
then send to prospective tenants or use in advertisements.
Renting Costs
Estate agents charge 1 month’s rent as commission for renting a
property. The small stamp duty fee on the rental agreement for rents
exceeding RM2,400 is payable by the tenant.
Renting Furnished, Part-Furnished or Unfurnished?
Most tenants will require at least a part-furnished place, ie
including such items as kitchen cabinets and curtains as these are
specific to a property and tenants are generally unwilling to incur
costs when they will be unable to take the items with them when they
leave.
Advantages of renting a place without furniture:
- no hassle of having to buy furniture
- no initial capital outlay
- many tenants prefer part-furnished accommodation as they already
have or intend to buy their own furniture
- tenants are unlikely to look after furniture which does not belong
to them, although the deposit can be kept back by the landlord in case
of damage
Advantages of renting a place fully-furnished:
- tenants who are looking for fully-furnished accommodation will pay a
premium for the convenience of renting a fully-furnished place
- good furniture will make your property look much better than if it
is left unfurnished and could thus potentially be rented quicker and
for a higher rent
Determine Your Asking Rent
How to determine market rent?
Estate agents will advise you on how much rent you can expect for your
property. Be aware that some agents may give you a high expected rent
in the hope that you will market the property through them, but
overpricing may result in lack of interest from prospective tenants.
You may also want to view a few similar properties in your area in
order to get an idea of how much your property should rent for.
The following properties usually rent at a premium:
- modern properties
- beautifully-furnished properties
- properties in areas favoured by expatriates (eg, Damansara Heights,
Bangsar, Jalan Ampang)
- properties close to transport links or facilities such as shops or
schools
The asking rent will normally be the highest rent you expect someone
to pay for your property. The asking rent is usually negotiable and
landlords will usually settle for an amount below the asking rent,
unless there is a lot of interest in their property in which case they
may rent for the asking price or even above the asking price.
Your asking rent will depend on your circumstances – if you are in a
rush to rent your property a lower asking rent will potentially ensure
that it is rented quicker. You may also decide to revise your asking
rent after viewings have started – if the property is not generating
any interest it may be best to lower the asking rent. Speed is crucial
in the renting game: remember every month the property is not rented
means one month’s rent is lost.
Viewing Time
The estate agents you have instructed will market your property and
arrange with you a convenient time for prospective tenants to see the
property. You may choose to be present during viewings or let the
agent show the property on their own. Prospective tenants may feel
more at ease viewing the property without the owner being present but
by being present you would have the opportunity to address any
concerns the tenant may have about your property.
If your property is currently tenanted check your rental agreement to
ensure you have the right to bring prospective tenants in the
property. If not ask your tenant if they would allow viewings. Either
way you will need to give reasonable notice to the tenant and arrange
for viewings at convenient times.
Presentation
Before allowing any prospective tenant in your property, you need to
consider how best to present your property in order to optimise its
potential. A few simple steps can greatly enhance the appeal of your
property to prospective tenants:
- clean up: remove all clutter, make sure your property is sparkling
clean and smells fresh and pleasant
- ensure comfortable viewing: switch on the air conditional or fans
before viewings; also switch all the lights on before viewings so the
rooms are full of light
- time for repairs: fix any leaks, creaky doors and jammed windows
- decorate: plants and pictures are easy ways to enhance the look of
your property
- don’t forget the outside: first impressions count so tidy the front
of your property; a beautifully-landscaped garden can also add much to
a property.
Negotiations
A tenant is interested in your property and has made an offer through
the agent who showed him your property. First of all make sure you
find out from the agent what precisely the buyer expects to be
included in the price he is offering in order to avoid any
misunderstandings (eg, furniture, curtains, fridge). Also find out the
prospective tenant’s employment credentials to determine the risks of
the tenant defaulting on the rent. You now have the choice of
accepting the offer, or rejecting it and possibly making a
counter-offer or just sticking to your asking price.
The Landlord’s Position
What you decide will depend on your circumstances at the time you
receive the offer:
- Are several tenants interested in the property and can you
realistically expect a higher offer?
- Has the property been on the market for a long time without
generating much interest? Is your asking rent realistic?
- Are you in a rush to rent your property?
The Tenant’s Position
Be aware that many tenants make offers which are lower than the rent
they are prepared to pay for the property, to start off negotiations.
Talk to the agent to get an idea of the tenant’s circumstances (are
they interested in other properties? what is their budget?)
The Agent’s Position
The Estate agents works for the landlord. He is paid by commission
amounting to one month’s rent so he has an interest in obtaining as
high a rent as possible. The agent should know the market inside out
so it is worth listening to his advice. However do be aware that he
also has an interest in making the tenancy happen, even at a lower
price, rather than not happen at all.
The Rental Agreement
Once the rent is agreed between the tenant and you, the tenant will be
expected to pay the first month’s rent to you to confirm the deal. On
signing the rental agreement the tenant will pay 2½ months’ rent to
cover for the security and utilities deposits.
The rental agreement will typically feature the landlord’s and
tenant’s particulars, the address of the property, the agreed rent,
the term and commencement date, as well as the tenant’s and landlord’s
covenants. The tenant normally covenants to, inter alia, pay the rent,
not cause a nuisance, keep the property in good condition, allow the
landlord to show the property to prospective buyers or tenants.
The landlord normally covenants to, inter alia, carry out any repairs
notified by the tenant, take out fire insurance, allow the tenant to
peaceably occupy the property. If the tenant is an expatriate, the
rental agreement may contain an expatriate clause specifying that the
tenant may end the agreement if he is transferred to another location.
The tenant may wish to negotiate other clauses, such as the right to
end the agreement if a development starts near the property. The
agreement will also stipulate what is to happen at the end of the
term, eg tenant to give notice to end or renew the tenancy.
The tenancy agreement also often includes the inventory for the
property. Ensure that the inventory includes all the items present in
the property when the tenancy starts to avoid any dispute at the end
of the tenancy. You may also want to take pictures before the tenant
moves in to have a record of the condition of the property before the
tenant moved in.
The End of the Tenancy
The tenancy is coming to an end and the tenant does not wish to renew
the tenancy. Make sure you start marketing the property for rent well
in advance (preferably at least 1 month) of the expiry of the tenancy
so as to avoid tenancy voids. Your rental agreement should include a
clause allowing you to show the property to prospective tenants.
When the tenant leaves, inspect the property and go through the
inventory to ensure they are leaving the property in the condition
they got it in (allowing for normal wear and tear); you are entitled
to retain part or all of the deposit to carry on any repairs or
cleaning or paying any bills which were the tenant’s responsibility. |
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