The Cost of Being A Landlord

Renting out your additional property is a great way to accumulate some side income. However, one cannot expect to make money without investing a little of their own. If you have thoughts toward being a landlord, there is an inherent cost you will have to bear before you start making cash.

In this article, we’ll discuss some of the pertinent things that you, as a future landlord, will need to consider;

First steps
For the purpose of this article, we are going to assume that you’ve already spent some money in outfitting the apartment/house. You’ve given it a fresh coat of paint (preferably white), checked the plumbing and ensured that the furniture included are in working condition.

Property management is very important so you’ve got to make sure that the sewage service is up to par and all leaking broken pipes have been fixed or replaced. Plumbing is arguably the most important thing in the house.
Only after the affairs of the unit have been settled, can you start advertising for it.

Show and tell
The most powerful thing you can do to give your property the coverage it needs is to use PropertyGuru. With an agent’s help, you can list your property on the website and have it viewed by hundreds, potentially thousands of tenants, local or foreign.

It is also certainly the most cost effective and efficient way to get your property seen by many people all over Malaysia and the world.

Additionally, you can use flyers or advertise in the newspapers and in magazines. All of these would hit you with a slightly higher cost though, so be very sure of your budget. You don’t have to utilize every option but it is a good idea to maximise the exposure of your property through one digital and one print media.

The property agent
The property agent is essential as he will be able to help you draft a contract that will spell out in detail all the terms and conditions of your pre and post rental procedures. The tenant will need to know important things like when rent is due and what would happen should payment for the month be delayed.

Furthermore, you will need to list down all the dos and don’ts and having an agent help you draft out such an agreement will be critical in ensuring that there are no loopholes for either party to abuse.

Be aware that you’ll likely bear the agent’s fees.

Details
Other things you’ll need to consider are property management fees. If the apartment you’re renting out is in a condo, it’s likely there is a monthly maintenance fee. This cost must be factored into your budgeting so you’ll never miss a payment and do not inconvenience your tenant.

Furthermore, should your tenant move out or cancel the contract abruptly, you will find yourself with a period of absence of which you will incur a loss. You need to prepare for this possibility and either plug the opening with someone new quickly, or have contingencies in place to minimise the effect.

What you can do is tell the tenant in writing that a minimum of one or two months alert is required before the actual termination or they will need to pay a penalty.

With a warning that a termination of contract is imminent, you can use the time to find another tenant or have a penalty sum drawn out to help you tide over your loss until the property is occupied again.

Rental cycle
Further costs will be incurred during the period when your original tenant has left and you’re in the process of finding a replacement. Clearing out the items and even replacing faulty or broken pipes, bulbs and so on will have to be done.

Basically, you have to ensure that the apartment is clean and fit for a new tenant to move in. All the trappings of the previous tenant need to be removed if they were left over. The new tenant would want to imagine living in the property so having mementos from someone else will greatly dampen that immersion.

In this regard, it’s the same as buying a home.

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