Property investments are the norm these days, where rental yields are seen as a source of income. Even when you apply for a mortgage loan, banks count rental returns as part of one’s earnings; which encourages many to explore the real estate market further.
However, if you’re a new investor and need guidance in preparing your investment property, fret not! Previously we focused on a 4-step guide for student lease properties. But what if your potential tenants are not students, and there are no universities nearby your property?
Step 1: Find tenants that fit
Worry not if your unit is not suitable for renting out to students, as there are always other potential tenants that you can focus on. Before deciding on your potential tenants, analyse your property’s location first. Check out what are the commercial developments and companies that are located nearby.
Your potential tenants can always be the working adults from nearby industrial areas and malls, or even hospitals.
Just like leasing to students, there are also several pros and cons of letting your unit to working adults:
Pros:
- Leasing period: Unlike students, working adults may stay for a longer term as opposed to a short period of time. This is because most of them do not change jobs often.
- Damages: It’s adults we are talking about here. They are generally more responsible, hence you can expect minimal damage to your unit which can be rectified easily from the deposit you’ve collected.
- Easy to talk to: Adults can be easier to communicate with compared to students, as they are more matured and informed in nature.
Cons:
- Damages to the unit: Even though you can expect a minimal amount of damage, things can be otherwise if the tenant has small children who stay in.
- Characteristics: Adults can be demanding sometimes as they would be well informed of their rights as tenants. However, not all will be demanding and most of them speak politely when making a request.
- Sharing with strangers: Extra partitioning or sharing the same house with strangers are mostly not accepted by adults who move in with their families.
Step 2: Preparing your home
Preparing your home for working adults can be quite tricky, as some will move in with their family, some prefer staying with friends, and some might prefer having their own exclusive unit to themselves.
So it is advisable not to partition extra rooms to fit more people, and to just leave the house as it is. Keep the house spacious, but at the same time do not leave the house unfurnished. Provide decent furnishing, or at least semi-furnish your unit.
Make sure you have certain must-have furnitures in your home such as bedframe and mattress, wardrobe, television, sofa, washing machine, fridge, water heater, a usable kitchen and so on.
However, appliances such as kettle, microwave, induction cooker and cutleries can be optional, as unlike students, working adults can afford to purchase such items which are relatively inexpensive.
Avoid funky decorative items and pick the ones that are more elegant. Maintain a simple yet clean look to your unit, and leave some space for the tenants to fit their things in.
Step 3: The add-ons
One way to lure potential tenants to your home is by offering them one or two parking spots. This will definitely add charm to your unit, as most of the working adults have their own vehicle and would prefer not to park illegally by the roadside. Hence, offering a secured parking for them is a big advantage.
In addition to that, grant the tenants access to the available facilities such as clubhouse which incorporates gymnasium, swimming pool and so on. Generally, access to these facilities are provided only to the owners; however, it is optional for the owner to grant access to their tenants and this requires additional payment sometimes. Discuss with your tenants if it is necessary and give them the access if they require it.
Overall, this benefits you as the landlord as you can demand a slightly higher rental for offering these add-ons! And your unit will be more appealing compared to the rental units that don’t offer such benefits.
Step 4: The final step!
The final step comes down to fixing a reasonable price to your unit and taking the effort to advertise it. If you’re unsure of the rental rate of your unit, do a short survey on the rental homes around your area or consult an agent. To makes things easy, hire an agent to handle things on your behalf, or advertise in prominent property portals such as PropertyGuru.
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my
