Are there any risks in renting out my property?
Of course, no one wants to face issues if given the chance. But investment is all about risk management. And renting out your apartment comes with its own set of risks.
So how can you handle such risks? By finding out what they are and how you can face them should it occur.
Here are 5 risks & their solutions you should know before renting out your property to tenants.
1. Tardy tenants
They could pay rental a few days later than promised or leave the electricity bills stacked up. Either way, tenants who tend to pay late will come up with a lot of excuses. And of course, some of them are being honest. But you can’t rule out the thought that they just…are. So how can you fix this kind of behaviour?
How to solve: Always. Send. Reminders. Sure, it’s annoying but if you want to make sure they pay on time, you have to remind them days before their due. You might have to jot down the date in the calendar so you’ll know when you need to remind them.
2. Destructive tenants
Sure, a broken glass here & there is normal. To err is human, after all. But what if it goes beyond that? Your tenants could turn into the Hulk and destroy the whole house. Imagine ending the tenancy with broken tables & upturned chairs. The only thing that hasn’t happened is the house getting set on fire.
How to solve: Homeowner’s insurance is your best friend. Just as how you’d protect yourself and your family with health insurance, your property must be protected with its own insurance. There are plenty of homeowner’s insurance provider around Malaysia. You can even ask your insurance agent if their company offers it.
3. Runaway tenants
Some tenants promise the sun and the moon before they move in. And they’ll be quick to use a sob story to get your sympathy. We’re not saying you should be heartless but maybe, just maybe, not everyone has the same kindness as you do. So how do you make sure they don’t run off before the next rental due?
How to solve: Always ask for reference. Sure, you’re no employer and you don’t care about where they work or study. But asking for places where you’re sure to find them can at least deter their attempts at running off. Because you know where they’ll be during the day, they can’t possibly have a clean getaway.
4. Stealing tenants
You decorated the house to feel home-y. You provided all the essential appliances so your tenant won’t be burdened. And lo and behold, at the end of the tenancy, some of your items are missing. So what can men do against such reckless hate thievery?
How to solve: Keep a checklist & be there during move-in and move-out. Both you and the tenant must agree to whatever’s in the checklist during move-in. And by the time they move out, again go through the list so you can spot the missing items immediately. Should there be missing items, quickly claim it from the tenant!
5. No tenants!
But the worst thing from all of these is…no tenants. Imagine void periods and empty properties. No rental income to help cover mortgage and tax. Not only will this take a toll on your personal saving, it will also put the property in dangers of being broken into.
How to solve: Advertising never stops! Even when you have a tenant, never stop advertising the next availability of your property. You never know when someone’s looking for a property at the exact date you’re offering. And don’t forget to share it on your social media, your friends and family may know someone.
