IT is tough being a landlord in Malaysia these days. Rental rates aretrending down, mainly due to an oversupply situation and ageing properties.
New properties provide an abundance of choices to tenants and make old ones look unappealing.
As properties continue to age, owners are forced to reduce rents or upgrade to keep pace with newer ones.
OVERSUPPLY CONDITION AFFECTING RENTAL MARKET
According to a report by Knight Frank, the cumulative supply of high-end condominiums or residences in Kuala Lumpur was at 51,278 units, with 2,048 more units expected to be completed by year-end.
In Klang Valley, at locations such as Mont Kiara, the average rental was around RM2.65 per sq ft (psf). This translates to RM3,710 for a 1,400 sq ft rental condominium.
Yet, a check on property listing websites shows that the average asking price is around RM4,500.
In Penang, asking rental prices also do not tally with market rates. For example, rates for units in Tanjong Tokong and Gurney Drive average around RM2.69 psf. However, the report noted that some landlords are still asking higher rents of more than RM3.50 psf per month.
CHALLENGES FOR LANDLORDS
Even excluding oversupply and ageing properties, landlords in Malaysia continue to face challenges, such as:
Rising maintenance costs
A property needs regular check-ups (such as quarterly air-condition servicing) and may also require emergency repairs (such as leaks and blown electrical fuses). As properties age and tenants come and go, high maintenance efforts and costs can eat into profits.
The longer a unit remains empty, the greater the losses. To attract tenants in a landlords desired target market, they will need to invest in improving the interior design, layout and furnishings, and show off the unit at its best.
When tenants have a complaint, someone needs to respond. But, any delayed response or action can result in unhappy tenants and increase their chances of leaving early or causing damage to the property.
Reminders and tracking
It’s easy to lose track on how much time and money being spent on maintenance. Similarly, you can also lose track of when rents are due, especially with multiple properties. This can translate to significant losses over time.
Given that the rising supply of properties, particularly in Klang Valley, shows no signs of slowing down, how can investors and landlords maintain (or even raise) rental income?
UPGRADING AND MAINTAINING PROPERTY
With so many rental property listing websites around, first impressions count. Your property needs to look welcoming, comfortable and stylish to attract interest.
If your unit is untenanted, taking the opportunity nity to upgrade your rental property is an effective way to attract more tenants at higher rentals.
Small upgrades can make a difference to your asking price. For example, changing the taps, lights, lightswitches, door handles and cabinet handles, and furniture can give your unit a much-needed makeover.
A larger upgrade could also command a better rental. This could include replacing the flooring, repainting the walls and ceiling (or adding wallpaper to create a feature wall), renovating the bathrooms and shower area, or replacing the kitchencabinets and countertop.
Once the property is tenanted, you will also need to ensure the property is well-maintained to increase tenant satisfaction.
Common tenant complaints include noisy, smelly or leaking air-con units; pests; clogged plumbing; or faulty appliances, such as the fridge and cooker.
These issues need to be dealt with quickly as they impact the daily comfort and convenience of the occupants.
AUTOMATING THE PROCESS OF RENTAL MANAGEMENT
For landlords, a property is a business, and it requires regular upkeep and fast response to ensure tenant satisfaction. This is more so if you area landlord of multiple properties.
To make it easier to maintain a rental property, landlords can use technology to automate and outsource property management. This can free the landlord from the stress of tenant complaints, chasing for rent payments, and sourcing for contractors.
Property management automation is already being used by property agents, property agencies and short-stay operators as a way to provide their clients with fast response for all property maintenance matters.
As such, there is no reason why landlords shouldn’t take advantage of it as well.
TECHNOLOGY IN MULTIPLE STAGES OF TENANCY
When looking for a suitable rental property management system, it should provide you (and your tenants) with not just a single point of contact, but a round-the-clock platform to report any maintenance issues. The system should provide multiple quotes from a panel of trusted contractors in your area for you to compare, and you should also be able to pay through the system to enjoy insurance against damage or theft for the duration of the project.
When the property is tenanted, you can use the system to report issues like appliance repairs, air-con servicing, plumbing problems and handyman repairs. And, when the property is in-between tenants, you can use the system to hire interior designers and renovators to revamp your space shop for furnishing packages, hire “move-in” cleaners, or even buy packaged interior designs to get your property ready in the shortest time.
However, not all issues can be fully automated.
If the project is complex, the system should be backed by a team of agents who can coordinate the work on your behalf.
An additional benefit of moving to a digital platform for property management is the ability to track your maintenance expenses against your rental income. And when the rental dates are due, the system should automatically send rent reminder emails to your tenants, to avoid late payments.
Automating your rental property management means that you no longer have to coordinate endlessly with your tenant to diagnose the problem, arrange site visits from multiple contractors, and wait for contractor replies that may never come.
One example of such a system built for Malaysian landlords is called RentcarebyRecommend.my, already used by hundreds of property investors (overseas and local) to simplify property management and maintenance.
MAKING RENTAL INCOME MORE PREDICTABLE AND STRESS-FREE
Whether you have one or ten properties, landlords need to make sure that rental rates and property value continue to increase over time. But maintaining any property is a demanding task that requires time and effort. This is probably not what you had in mind when you invested in a rental property for “passive” income.
By outsourcing your property maintenance to a property management system, you can free up your time from maintenance issues, and get access to the most qualified contractors to improve or maintain your property.