5 Things I Learned When Renting Out My Home For The First Time
Renting out your property is not just about a few handshakes and you sit back and relax while waiting for the check to come. How I wish it was that simple! Aside from the legal stuff, there are also a few things you should remember when being a landlord (especially if this is your first time). Between problematic tenants and the expenses to maintain the house, it can be a daunting task. So, here are five things you should know to ease your journey.
1. Educate yourself about renting rules.
Unfortunately, Malaysia does not have any specific landlord and tenant laws in Malaysia. This is a disadvantage for the landlord! So, know what you are obligated to pay for and what you do not need to pay for if you are renting out your home.
In essence, you are only required to make sure the house is safe to live in. With that said, the electrical and piping systems are usually under your responsibilities. But, other maintenance costs such as damage on any of the electrical appliances or furniture made by the tenant is not your responsibility. This is why the deposit fee is vital!
Even if there is no specific law, here is an article you can read to protect yourself that I find useful: 5 things a landlord needs to know written by Chris Tan in Edgeprop.my. In this article, Tan writes about the importance of a tenancy agreement and two legal ways you can do it if there is a dispute. These two things will help protect you legally should any problem arise.
2. Screen your tenant.
Because there is no landlord and tenant law, screening your future tenants is a vital process. Make the effort to meet them and ask about their jobs and other relevant information to help minimise your worries or doubts.
When I was first renting out my house, I made the mistake of not properly screening my tenant the first time around. They ended up not paying for rent for the first couple of months. Even worse still, they ghosted me! By the second month, I had no choice but to ask them to leave if they can’t pay and long story short, they did. (Again, thank God for the deposit fee).
So, don’t make the mistake I made and screen your tenant properly. Ask as many detailed questions as you can. It’s okay to ask them how many kids will be living in the house or about their work. These are all legitimate and vital questions that will help you choose your tenant wisely. Remember, you are not only choosing your tenant, but you are also choosing the caretakers of your house too.
3. Have everything in black and white.
Spend a bit of time to create a well-written tenancy agreement. Sit down with your tenant and have them understand the agreement. This will ensure that both parties are not blindsided by the other. Plus, any disagreements can be voiced out right there and then. Aside from the tenancy agreement, educate yourself on the stamp duty & administration and legal fees to be stamped by LHDN to make the agreement valid.
No matter how much you trust your tenant, having everything in black and white will protect all parties involved. This will also avoid ‘he said, she said’ cases. On an investment as big as a house, that is the last thing you want to happen!
4. Be professional and strict, yet gracious.
Maintain a good relationship with your tenant but be careful to not let them overstep your boundaries. It’s okay to stand firm in your decisions and define your own limits to your tenants. At the earlier stage of renting, my tenant started demanding cosmetic things to be done to the house. I first catered to them because I didn’t know I could say no (silly me). But I finally had enough when they asked to replace the broken bedroom door which they broke with the one they liked most.
The door they had in mind exceeded my budget so I told them I will not cater to their request but will still give them a new working door. Reminder, you don’t have to cater to their requests all the time. But, don’t forget to take the time to listen to your tenant as well! There will be instances where they might be in a tough situation so when that time comes, you can choose to be gracious about it.
5. Organise regular inspections.
Tell your tenants that they should expect regular inspections of the property (once every 6 months or once a year is reasonable enough). This is your investment after all so you need to be sure that everything is in order. This will also help you to look at things that need any fixing. If you can’t do this personally, you can ask your handyman to help look at things when he’s doing his regular maintenance.
Having regular inspections will keep your tenants on their toes and be extra mindful. Of course, there are amazing tenants and those are a godsend. But take it from me, it is better to be safe than sorry. Aside from checking up on the damages, inspections will help you to check for any damages that your tenant might have overlooked. A house needs to be regularly maintained and further delays may cost you more money. So, inspect often to avoid any major problems!
Being a landlord does not mean you have to be super strict nor does it mean you have to be super lenient. You can be a great landlord without overstepping your own boundaries. One thing you have to understand is being particular and rigid should not be seen as troubling when it comes to your investment.
Last but not least, drawing up a strict agreement does not mean you’re a bad person. It just means you are a realistic person and it is something that should be expected when it comes to dealing with any valuable assets. Don’t be afraid to take on the responsibility. It might be overwhelming at first, but there’s nothing you can’t get through!
For further reading, check out this article on practical tips to live harmoniously with your housemate.