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Things Investors Should Know When Renting Out Properties in Malaysia



As an investor, we should always know the industry we are in, and learn to add value to our prospects.


When it comes to advising your tenant, let them know their rights. The tenancy agreement to be properly spelt out to protect their interest during their tenancy period. Proper handover during check-in and check-out could help both parties to avoid any disputes and unwanted actions, this could be wasting time and energy and people give up investing because they thought dealing with tenants is too much of hassles.


The minimum rental period for residential property is one year. The usual deposits required for renting will be 2 months in advance and half month for utility and notice of termination is usually minimum 2 months. Monthly rental is payable via bank-in directly to the property owner’s bank account.


Agent fees and commission should be paid by the property owner. As tenant, they would need to pay in preparation of rental agreement and also stamp duty for this agreement.

The guide to legal fees and stamp duty payable in preparation of rental agreement is as follows:


Legal Fee for Rental Agreement period of below 3 years: For first MYR 10,000 rental – 25% of the monthly rent For the next MYR 90,000   – 20% of the monthly rent Where rent is in excess of MYR 100,000 – negotiable

Legal Fee for Rental Agreement period of above 3 years: For first MYR 10,000 rental – 50% of the monthly rent For the next MYR 90,000    – 20% of the monthly rent Where rent is in excess of MYR 100,000 – negotiable

Stamp duty payable to Land Office for Tenancy: Rental for every MYR 250 in excess of MYR 2,400 rental Less than 1 year : MYR 1 Between 1-3 years : MYR 2 More than 3 years: MYR 3 Note: Rental amount below MYR 2,400 – no stamp duty.


For an example renting of property of MYR3,000 per month: Legal fee  : MYR 3,000 x 25% = MYR 750 Stamp Duty : (MYR 36,000 (annual rent)-MYR 2,400/MYR 250) x 1 year = MYR 134.40 

Total fees payable for legal fee and stamp duty will be MYR 884.40.


During the tenancy, the utilities bill such as electricity, water and gas is payable by tenant. The monthly property maintenance payable to management office will be at the responsibility of the property owner.


Choosing the right place to invest:

1. Always know your market: Who they are, what do they need.

2. Is there a demand in the area you are investing in?

3. Do a market research.


Can always buzz us to enquire further on the subjects that you would like to learn more on.


Thank you for reading.


Your Trusted Contractor,

William




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