Hi Guys,

My first house will be ready end of this month and I've spared some cash for basic renovation, electricity & kitchen works, so that it is ready to be rent, probably in next 2-3 months.

I have a concern here: how do I ensure my future tenant make prompt rental payment to my bank account? Other than the normal check your account& follow up call method? I am not interested to deal with tenant problem with regards to the rental payment, like insufficient fund, need cash to help family, etc.

Is there any better way of doing it? Does legal documentation can help you to deal with tenant who tend to escape from paying you, or you have to go through the hassle of going up& down to court just to solve this problem?

Also, between:

a- students
b- family, or
c- a group of singles who just started their career

which one would you prefer as your tenant?

This post has been edited by bitterbutter: May 21 2008, 09:15 PM

Get the RIGHT tenant then.

Make sure ur tenant is good lo. Check background. Don't take those ah beng types as ur tenants. Working couples maybe? Couples who just get married? Those stable ones. Once u let them move in and they make havoc then you'll have hell of a time. Hehe

The easiest and toughest way is to "select" the "right" tenant like mentioned by Pai.
Even with legal docs and all, you'll need to spend money and time on lawsuits and eviction notices if it really comes to that seriousness.
Also, this is what we call ppl management. Sometimes if we ourself as the owner treats the tenant good in the sense that sometimes cutting some slacks or being attentive to tenants issues and request, we might get something good in return.

As others have already mentioned, the only way is to get the right tenant. You might have to spend more time interviewing the prospective tenant, but it's worthwhile.

You should still have a well drafted tenancy agreement in place, but going through the legal process to enforce it can be a big hassle.

Reason for editing:
For simplicity, I've combined relevant questions inside the first post.

This post has been edited by bitterbutter: May 21 2008, 09:17 PM

Students or group of singles might b my choice...

it's lik hitting a jackpot..sometime u get a good tenant...sometime u get bad tenant.. but spend ur time to interviewing the people...slowly filter out and choose the best candidates..

Anyway...make sure u insist to them tat u really wan them to pay on time...

My pick is either (b) or ©.

Students being students would not have high responsibility towards your property. Likely to be poor in maintaining it. Also in trying to save money, students often tend to get more students to share the place (to keep costs down). So end up having lots in your property (and with more people, more wear and tear).

Never rent your house to students especially when your house is new. My mum is renting hers to a family. So far the payment is good and the house is being well maintained.

I heard you can do standing order order with your tenant? It will automatically deduct from their account. Need some setup cost I think - so you have to bear it.

I just rented out apartment which belongs to my in law to a newly wed couple. So far they are very easy to negotiate

choice b would be the best.
It could be either family or couples. But obviously couples which are pleasant. Reason being they're bound to keep the house in order.
If it's a or c, I wouldn't even renovate the house in the first place. But between choice a and c, I would pick c any other days. so my choice is:

1st - B
2nd - C
3rd - A

hi,

there's no hard-and-fast rule regarding tenants.. (because we're all humans)
however, to mitigate certain risks, you can ask to see financial informations, ask for referrals, talk to their previous landlords, etc.

or you can use a reward-strategy.. sometimes a rm20-50 incentive for prompt payment can work.

no students for me, and kinda agreed that newly weds will usually take care of your properties.

anyones..it's hard to judge a good tenant
just make tenancy agreement and indicate all the T & C

Thought about this as well, one thing that I'm not too sure: does the tenant have the permission to cancel this, esp when they have insufficient fund?

I thought that it is brilliant renting my unit to a single working lady. Hell am I wrong. She never even take care of ANYTHING. When she moved out, I have to deduct her deposits to repair gazillion things such as painting the walls again, cover holes (she nailed the wall to hang clothes!), nose shit behind the door (OMG), etc etc. But the good thing is, she pays promptly.

Well, now the unit is rented to a couple, so far so good and prompt payment. And they take good care of the unit.

Make sure you include a clause in your agreement where the landlord have the right to retain the deposit if there is any mishandling or damages done to the premise

To be honest, sometimes guys can take care of the house better than ladies.
Sure ladies are prompt to be more clean. But at least if there's any fixes, guys are more sturdier in that area. I'm one of those guys...haha
But anyway, working ppl/group might be worst than student. Only comfort is we assume they have the ability to pay and more mature.
Students, we risk them go missing any other days.
Couples or rather...married couples and families are still the wiser choice.

Just add there is also another type of tenant:-

d- Company lease

Leasing to a company surmounts many problems esp. if it's a large reputable organization like DHL/HP etc. Such organizations have steady incomes and are unlikely to have financial problems.

I have colleagues who are staying in company provided housing "Mont Kiara" for nearly a decade already.

Also maintain a cordial and relationship with your tenant. If nothing else, their conscience will guide them in keeping your home safe IMHO.

If the tenants have rented before ask them for past references and talk to their former landlords.

good note.. lease it to exxonmobil for example.

Usually in cases of repairs (minor and major) who bears the costs?

Greetings TS !
Currently .. my house are rented out to those Polytechnic students around my area. At this point of time, I'm also facing some difficulties over with the payment issue as some of them will give reasons for the delay.
I was thinking about charging them penalty for the delay payment .. but not sure whether it sounds practical or not ..

Any suggestion ?

for me, i have bad experiences renting to students and single adults. I think family maybe better, but again depends on luck. Interviewing potential occupant also not much use, he may give you the impression that he is the richest guy in the world, but end of the day, water and electricity bill also never pay .....

Usually major repair would be by owner.
But if we're talking about small small things like changing the starter for a florescent tube, replacing a burned out lights; a good tenant would do that themselves. But than if tenant asked the owner, it would be good for the owner to do it to have a good impression on the tenant too.

Agreed !
Can't really judge them by the way they talk and cover .. only time will tell whether how good tenant are they ...

Hmm ..that's true !
Minor repairs are always bare by the tenant themselves. As for my case here,it will always depend on the scenario. If its really require heavy maintenance or repair .. the cost will be bare 50/50 .. if not the tenant will cover up the cost themselves.

If u know u r interviewing students, how rich can they be when u well know there will at least 6 person sharing your place. Interview does helps, as long as you know to ask the RIGHT questions. Luck in this context is just about managing risk.

Google-up n u'll find plenty of tips on how to interview & qualify your tenant. Good luck

hi nnpjj,

how true is the saying " never judge a book by its cover".
the question of having the ability to pay rent never arises (who on earth will be straight with you that they can't afford to pay rent in the first place?)

but the question on how they earn their income allows more useful insight to their ability to pay rent and perhaps helps you to mitigate risk..

the issue here is risk assessment and there're ways you can assess risk.. and monitor risky situation before it blows up.

assuming u have all the legal documentation in place, plus extras here n there i.e. inventory list, conditions of furnitures n fixtures, etc i feel that the best way to get a good tenant is to educate them to be one early. the moment they default on the rental, like one day after the grace period i'll give them a letter... default 1 month i'll give them an sms to disconnect their water n electricity. i have not actually had to disconnect any of their utilities yet cos usually by this time they'll pay up. (oh n yes its included in the tenancy, with very short notice period)

of course if they have any problems that requires my attention, i make it a point to attend to them fast like in 3 days or less. it works both ways when it comes to things like these. u treat them well n respond fast, n expect for them to do the same. if they're gonna default i'd cut my losses sooner rather than later. max 2 months without rental then off u go. the whole legal approach with notices can be very tedious n time consuming, and more often than not yield nothing at the end of the day. some can even go on up to 6 months or more.

tenants could promise that they'll pay up by when n when, n most of the time landlords would allow them that 'additional grace period' with the hope of recovering their rental. 1 mth, then 2 mth, then 3 mth.... landlords would be thinking like.... i've got too much to lose if i chase them now. n most of the time landlords will only chase their tenant out when the 'nail' becomes too painful for them to bear, that is also, if the tenant have not already taken off....

thats just me..... i did what i did after taking several factors into consideration cos i've seen many cases where defaulters just took off during the whole 'notice' process...... then what you're gonna do? sue them for bankruptcy? get real.....

i'm just sharing my personal approach to handling this kind of tenant, n if you're wondering.... yes i get results better than what i got for my exams. do i recommend this approach to others know yourself n know your tenant. until u understand this best stick to the approach you're comfortable with. i will say that such approach is not recommended for commercial properties cos if you're not careful... the hunter could end up being hunted.

the point here is educate your tenant early. we can go thru all the screening process n have the most detailed tenancy drafted by the best lawyer in town but if it doesn't get them to pay their rent on time, its as good as nothing. its all about results. instead of what i did u could ask a lawyer to issue them a LOD (letter of demand) n charge back the cost of such service to them... (must be specified in your tenancy). n send it the minute they default on their rental.

as far as being friendly or cordial with the tenant i prefer the businesslike approach. friendly but firm. no need to know each other so well. u have a problem i need to solve i'll do it. as for u, just pay your rental on time.

the approach may seem a little drastic and cruel on the surface but it really 'forces' bad tenant to own up n negotiate if they have a problem instead of beating around the bush n hiding. how many landlords out there have had a tenant who 'dissapeared' for certain periods leaving them not sure what to do? with this approach once they own up n negotiate u decide if you r willing to grant them any additional time, n of course be ready for any outcome resulting from that decision.

This post has been edited by speed7791: Jun 10 2008, 05:26 PM

Well, for tenants with unknown background, it is best to get them to issue you post-dated cheques. End of the day, it depends on supply & demand situation with your property. If it is easy to get tenants, you can have it your way. If not, you cannot afford to be picky.

Legal stuffs always is the last resort and quite frankly, for consumer cases, I doubt anyone will go to legal means to settle a dispute. It is simply not wirth the effort.

I would prefer family tenant but also depends on your property location.

Good luck.

Charge it to your tenant credit card !! Like those installment plan..Hehe, if only there's service for this kind of thing, i dont mind paying 100 to the service company to handle all my tenant payment. Probably applicable to rental RM 1k above.

don't ever rent to someone or families that have reasons not to pay the full 2+ 1 deposit and have rented another house before. Most probably they don't have money and have just kena halau by the previous landlord. I experinced this last time when handling the key of my sister's apartment to a family that konon2nya don'have enogh money at that time and want to pay half of the 2 months deposit and 1 months rental first. then, after two weeks, he will pay the balance deposit. it ends up paying nothing after 1 and half months. after lots of sms and phone arguments, they get out of the apartment with few damages.

i think newly married couple is the most suitable, followed by female students.