Be careful when you are renting your unit out
People always say that real estate investing is one of the best way to earn money. Well, it’s most probably the way to earn the most money (over a short period of time) if you do it right but the risks are there and they are pretty high too. But let’s say after giving it some thoughts, you’ve decided to invest in real estates. You have 4 options now.
- To make it your personal home – for your own stay.
- Flip it when the price is right and when you found a buyer.
- Leave it vacant until a suitable buyer or the price increases.
- Rent it out.
If you happen to choose the last option which is to rent it out, you have to be careful. From my observation, there are a lot of tenants who move out without paying the rent. I’ve myself have witnessed 2 or 3 such cases in my condo. The landlords came over and complained about it. Apparently, these tenants did not pay a single cent for the past few months. They kept on delaying the payment and moved out within 24 hours.
Just imagine if you are renting your condo unit out for RM 2000 per month. And 3 months without rental, it’s a huge RM 6000 ! Not to say you have to repair and refurbish the whole unit once they’ve moved out.
Some of you might say that you will have legal documents and stuff. But the thing in our country is, how are you going to find those people? It’s near impossible.
So my advice to you, don’t rent it out if you can. If you still insist on renting the unit out, make sure you collect the rental every month and always ensure you select the right tenants. I know sometimes it’s hard to even find a tenant, but leaving your unit empty is still better than finding a tenant who doesn’t pay.
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Comments
@ Damien
Actually business premises have higher risks as opposed to residential units. More expensive in terms of cost and bills, and the location is very important. If you’re lucky, you can get anchor tenants like banks (but banks are very hard to come by since they normally deal with the developers directly) or franchise outlets. If you’re unlucky, you could find your multi-million unit abandoned, without anyone interested to rent due to the high rental fee.
@ ChampDog
True true. Maybe it should be flip it, without waiting for the right price. Since waiting is like the 3rd option.
I agree renting out to the wrong tenants are big headaches! I think we must choose our tenants very carefully and have them sign a contract that make it possible for us to charge them interest for late payments!
foongpc´s last blog ..The Big Banyan Tree 
What do you think about investing in business premises as opposed to residential units. Do you think they are less risky in terms of tenant management?