One of my friend just brought a new town house. The developer managed to deliver the property on time. Now is under the property inspection and acceptance phase. She was so lucky that there is already potential tenant approached her for rent. She was excited as there is people (the tenant) helping her to pay her housing loan installment every month. Which release her from cash out big portion of her monthly salary income for other usage instead of installment.
As this is the first time become landlord, she is bit nervous. As a friend of her I shared my landlord experience with her. Oh dear, suddenly I realized that I haven’t document down the knowledge I have gathered!
Here some tips as a landlord.
- Tenancy Agreement is a must.
- Take photo of every valuable in the property and get tenant’s initial on it.
- Indicate the renewal / move out notice period if the tenant decide to stay after the agreed period or move out before the contract matured.
- Give rewards (such as 20% discount on last month rental, TV set, etc) for tenants who pay rental punctually (or pay rental in advance)
- Note down the electricity and water meter reading and get tenant to acknowledge and initial it.
- Open a bank account which is easily accessible by tenant to bank in rental. The bank account number should be stated in the tenancy agreement.
- Indicate clearly when do you expect the rental to be banked in and the penalty if you do not receive the money by the agreed date.
- Tenant must fax you or pass you the bank-in slips, electricity and water bill receipt periodically (let’s say 3 months).
- Note down the name, IC number, telephone number in the tenancy agreement. Any additional people who want to stay in the property must notify you before moving in.
- Protect the properties by insurance.
- Pay visit to your property regularly when it is just rented. You may cut down the frequency after few months, if your tenants could take care of your property and you have more confident with them.
- Understand the cost of maintaining the property. You estimation should cover not only the mortgage installment but also the taxes, repair cost and agent fees, etc.
There are lot more issues to take note to become an effective land lord and get your property help you pay off your mortgage. The more you know the more you enjoy to be a land lord.
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This is indeed a good ol’ traditional method to help you combat your spendings/month, but not everyone can do this.
Probably you could speak more of how people would save money to invest in properties, looking at the current rate the property market is going now?
It’s really useful tips for home owner to rent out the property. Thanks for sharing. The Tenancy Agreement just sign by landlord & tenant, do need to stamp or . . . .