Thus far I have only been renting out my units under a fully-furnished condition. Not even partially furnished. I have even recently influenced a full investor to rent out his home fully furnished and I will share his excitement in the below few points. There are no right or wrong. Some prefers to rent out empty units because there is less to worry. The maintenance is likely to be lower. The market for these tenants are easily many times larger than those who only wants fully furnished and willing to pay a premium. Very true then, very true now. Let me tell you my few reasons in renting out fully furnished.
Lower risk. Yes, I personally think its lower risk. If your tenants are not that financially well off, why would he pay extra few hundred Ringgit to rent your place? Assuming its RM400 extra, that’s already an extra of RM1,200 at the beginning. It’s an extra RM4,800 per year! Secondly, if the person is really needing just a place to stay, there is NO need to rent a fully furnished place. Any place, cheap would be just fine. I remember when I was renting a student house previously, the main theme was just ‘cheap.’ The rest will somehow fall into place. It’s still true today.
Better tenant. Seriously, better tenant? Well, my tenant of that RM700 unit remained my tenant until he bought a landed property in Gertak Sanggul in Penang. Nearly 4 years. He has always paid rental on time and when he moved out, I think the apartment was still in one piece. Even the washing machine, LG brand was still working! After 8 years of continuous usage. Thus far, all my tenants have remained friends because all of them have rented for many years. Well, a good homeowner is a plus too. Yes, that’s me. Haha.
Marketplace is smaller. Yes, those who would furnish their units well and renting them out are fewer. So are those who wants to rent fully furnished, these are fewer too. What this meant is that your competition would be lesser even if your target market is also smaller. In this marketplace, there is very little need to negotiate hard. If you need to, there’s something wrong with the tenant, please allow him to rent someone else’s unit. Following is a true conversation with a tenant about 12 years ago in Penang.
Potential tenant: Wah, your place is just so-so but you want to rent out RM700? I have seen a few furnished units for just RM550.
Me: I agree. That’s why if you prefer those units, its best that you take them. I think it would be foolish if those units are similar to mine and you still want to negotiate because the price difference is so huge.
The deal did not happen but my unit was rented out for many years, at a premium until I sold it off. Funny? True though.
Oh yeah, about a friend who told me how excited he was in renting out his place. He was staying in Klang and he was moving out to a bigger place. Rental for landed has always been bad and it’s Klang too. His price was a few hundred above the usual market rate for a non-furnished unit. Somehow his agent called him and said, ‘you are lucky, there is really a family who wants to rent your place at your price because they are waiting for their new home to be ready.’
Well, there is NO GUARANTEE for anything. Many times, all these depend also on the homeowner and not just the tenant. I always believe good people will meet good people, if you get what I mean. Calculative people will somehow get calculative tenants too. Haha. I have seen many friends telling me how calculative their tenants were. Sigh, I have to remain calm and not simply say the problem might also be them too. Happy renting one or renting out.
written on 21 Aug 2015
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