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Vacant Rental? 4 Strategies to Creatively Maximise your Rental Income!

Vacant Rental? 4 Strategies to Creatively Maximise your Rental Income!

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The property market in Malaysia is experiencing a hangover. No, it is not induced by excessive amount of alcohol, but rather, an excessive amount of unsold properties.

The property market in Malaysia is experiencing a hangover. No, it is not induced by excessive amount of alcohol, but rather, an excessive amount of unsold properties. The STAR (2019) reports that the residential overhang has increased to 32,313 units valued at RM19.86 billion in 2018, an increase of over 27%, in volume and value, in comparison to 2017. Meanwhile, commercial properties getting the same treatment too, with an increase of 11.2% to 5,055 units unsold valued at RM4.08 billion.

For property developers, it doesn’t fare well to have your constructed units unsold, and thus forcing you to slow the development of new projects. If you are a buyer seeking to buy a property within a sound investment margin, then your options are plenty.

But there is another group that benefits from the current property overhang – landlords aka property investors. That being said, yes, rental rates are far below property loan repayments, and renters are spoiled for choices. A potential tenant has far more bargaining power to negotiate on rental price because there are many vacant units and landlords that are desperate to secure a good long-term tenant.

However, we as property investors, don’t have to give up just yet because there are 4 strategies that we can adopt to creatively rent out our properties. Now, some of these strategies are short-term based, and nothing beats getting a good tenant. But that does mean that you can’t adopt these strategies to earn some quick money to pay the installments.

1. Nail the Basics First

Yes, this strategy is not creative per se, but you would be surprised to find out how some landlords never realise the things they have to do to attract a good tenant. Firstly, it’s good to have your property in a rent able condition for new tenants. A ‘rent ready’ property is cleaned, repaired and remodeled in a rentable condition for new tenants.

Next, it always good to research on the fair pricing on your rental based on your location, screen your tenants early on, and follow the housing laws fairly . To make yourself the best landlord that you can be, make it easy for your tenants to pay you the rent (psstt…online banking) and always keep records of everything.

2. AirBnb or Short-term Rentals

And now, we can go into some of the more creative ideas that you can work on with your property and the first is – AirBnB

AirBnb has gained so much traction in Malaysia over the last few years. The reason – the short-term returns beat the long-term rental rates. Not only that, you have the luxury of having your unit available for your own, friends’ or relatives’ use when it is not occupied by guests. Plus you don’t have to spend an extra funds to refurbish your unit again for another tenant.

In case you didn’t know, before renting out on AirBnb, there are some laws and regulations that you will be required to follow from them, plus the local laws of your area, so do your research thoroughly. Plus, aesthetics are a critical point too, so you might want to invest in IKEA for some nice furniture and other home improvement items before creating your listing in AirBnB.

3. Hostel

This is a relatively well-known concept among landlords, in which a property is turned into a hostel. The idea involves making use of partitions to maximise the space of property and create more rooms which can then be rented out individuals.

Using this strategy, some properties were able to triple their yield rent. Plus, depending on where your property is, there is always demand for hostel rentals. Out-of-state and overseas students need a place to stay and study, and so do working people. Matter-of-fact, if you own a commercial unit, like a shoplot, you can convert it into a foreign worker quarters!

However, this also depends on the property in question. The size and layout of the unit matters and the more square it is, the easier it is to divide the space up.

4. Co-working or Event Space

This last item in our list is the costliest idea, but if done well, would be the most rewarding strategy in this list.

Just like the hostel idea mentioned above, here’s another alternative for commercial properties. As the sales of commercial lots are seeing a huge downfall in Malaysia recently, many people have proposed the strategy of renting out working space for entrepreneurs and freelancers. These individuals don’t need a full space on their own (the overheads are too high!), but require access to the amenities an office space has.

For spaces where co-working offices are not an option, fret not, for the alternative for those could be event spaces. These spaces should be able to hold a large amount of people, have lots of open space, and have themed-decorations and sufficient amenities (tables, chairs, power outlets, etc.) for the event.

Some popular websites where you can create listings for event spaces are https://www.venuescape.my/ and https://www.venuerific.com/my. Also, as mentioned earlier (you might have guessed as well), designing and building co-working and event spaces are going to be very costly, so be prepared for a large upfront investment first.

Conclusion

In an increasingly difficult and competitive market, it’s necessary for us to be open to trying out new ideas and methods to ensure that we reap the rewards we deserve from our property investment. If finding the right tenant remains a hassle for you, then its time you consult us for the best advice you can get as a landlord.

Share your landlord experience with us in the comments!

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