Congratulations! You are now a proud owner of a spanking new property that you have just purchased and now you want to make money from your investment. But, how do you go about it? What is the first thing you must do? Where do you start?
These are questions everyone who is new to the business of renting their properties face. Here, we grant you a full step-by-step guide into the necessary things you must do to get you rental up and running. Be sure to go through all the steps carefully to avoid any trouble in the future:
1. Set a Rental Rate
This step is rather simple to do. In order to know the current rate for your property, you should know the rental being paid for similar types of property in your area. You can charge 5-20% higher if your unit has been renovated or is fully furnished and semi-furnished. The best way to determine what the average rental rate for your area is to visit an online property website and browse to see what others are asking for their rented properties.
2. Do Some Renovations
Some basic renovations are always necessary for any new house, especially installing fans, lights and other basic fixtures. For added security, you may want to install window and door grills. The more renovations you perform in order to add comfort or increase the aesthetic appeal of a house will garner you a higher rental rate.
3. Engage a Real Estate Agent or Do It Yourself
Hiring a real estate agent to publicize and find tenants for your house will definitely save you a lot of time and effort. It will also lend a more professional air to the entire process. However, it will cost you a bit of money, usually one month’s rental, to hire an agent. If you choose to find tenants yourself, your best bet will be to post an ad online, like here on DurianProperty.com.
4. Draw Up a Tenancy Agreement
Once you have found a tenant, it’s time to get down to the legal bits. If there are no special demands on your side or the tenant’s, then you are free to use a template tenancy agreement. However, you will have to specify the period of agreement and other details like how much deposit needs to be paid (usually one month’s advance rental, one full month’s rental as deposit and one month’s rental as utilities deposit. All in all, three month’s rental). If there are any major demands or modifications to the usual tenancy requirements, we suggest you seek a lawyer’s advice.
5. Stamp the Agreement
In order for the tenancy agreement to take effect, you have to get it stamped at the Land office and pay a stamping fee. For rentals below RM2400, there is no stamping fee required. However, for rental rates above RM2,400, the stamps cost (for every excess of RM240)
• RM1 for 1 year or less
• RM2 for 1-3 years
• RM3 for 3 years or more
6. Congratulations! You’re now a Landlord
Your duties are not over as you are required to pay the quit rent, maintenance fee (if any),assessment fee and various other costs that come with owning a piece of property. Don’t forget to check in on your tenant occasionally to see what needs improvement or fixing.