Guide To Rent Your Property

Guide To Rent Your Property

So, you have inherited a landed house in Taman Tun Dr Ismail and you have no idea what to do with the property as you have your own house. There are ways to make good use of property to generate passive income; by renting out your inheritance. But then again, you have no idea the future of the property’s vicinity or will your property is attractive enough to attract potential tenants. There are so many to consider internally and externally and here we are going to tell you on renting out your property. 

To rent or not to rent

We tell you why to put up your property for rental; to generate passive monthly income for yourself. However, for those who bought additional property for investment purpose, it is advisable to rent out the property to ease your monthly installment. It aids by facilitating your mortgage repayments for property during short term and while waiting to reap the capital appreciation. That way your property is not put to waste for not doing anything.

Rental amount 

Do you know what is the rental amount you should set? Is it comparable to the similar units around the area? Well, there are two ways you can get a gauge of the rental amount.

1. Through property portal - by using these property portals like PropertyGuru, you are able to set an amount of the rental rate, you can check the rental listings and gauge your ideal rental amount for your tenants like Taman Tun Dr Ismail landed houses area is also available on the property portal.

2. Basic formula - you can use this basic formula to calculate rental yield.

Rental yield = 

Annual rental income / Property purchase 

The ideal rental yield for residential properties is 6%.

Fittings and fixtures

Spruce up a little bit inside of the unit; get a minor renovation on the ceiling, paint the walls or add an island top in the kitchen. Besides getting the aesthetics done, don’t forget to check on the water and piping system or lightings. Not only these will help you attract potential tenants or increase the rental amount but you wouldn’t your future tenants come back to you complaining on the damages. 

Get it listed

Get an agent to help you put up your property for rent listing in PropertyGuru. Not only they help you to market but they will represent you to filter, negotiate and settle your tenants to get rid of your hassle. It comes with a fee too which is usually a month’s fee. Do communicate your ideal requirements on your lease to agent so they can help you filter better tenants for you. 

Tenancy agreement

After your potential tenant likes the unit and wants to rent your place, your agent will immediately draft the tenancy agreement that includes the lease dates, amount and signature of agreement. Ensure that all the agreements are signed and stamped.

Basically, the standard tenancy agreement stipulates that the tenant is oblige to pay two months of rent in advance - one month’s rental in advance and one month as refundable deposit (subject to both parties’ agreement). The tenancy agreement should also list down fixtures and fittings that comes with the unit. In the event, if there are any fixtures and fittings that are damaged during their tenure, tenants can get it replace upon termination on the tenancy agreement. 

Remember that the tenancy agreement is for the benefit of both parties, ensuring both parties are protected by the law.

Agreement stamping

All tenancy agreements are required to be stamped and the legal fees depend on the amount rent of payable monthly. If the documents are not stamped and when disputes arise, the agreement shall be disregard. Click here to check out the stamp duty schedule.

Congratulations landlord!

So, the legal documents and formalities process is completed. Now, you can handover tenant’s set of keys and pay the necessary maintenance fees (if your property is strata housing type), quit rent, assessment fees and others. Lastly, you can proudly declare any positive income that your property has generated.

Familiarize with your income tax deductibles so you can reduce your taxes on rental income. You can claim capital allowance and current year business source losses can be utilized to set off all sources of income.