Renting properties out to international students can be a great option for landlords to bring in some extra cash – if you know what to consider
Relocating to a new city is really challenging. According to the Ministry of Education Malaysia (MoE), there are more than 170,000 international students in Malaysia in the year 2017. They came from over 150 nations like the Middle East, China, and Indonesia. 22% of the students are pursuing masters and PhD. As for landlords, it can be more profitable to rent out properties to international students. Not just that, offering tenancy to them can help you fill up the vacant unit quickly. Nevertheless, international students might be seeking for different needs from local tenants. Thus, it is important for landlords to understand the ins and outs of this business.
There are key takeaways that landlord should consider before putting up their house for listing and renting it out to international students. Let us show you the rope on how to be the best landlord.
1. Is my property suitable for students?
Be it international or local students, they will look for a property that is a walking distance or closer to college. This makes it easier for them to commute especially when you are new to the area. For example, Cyberjaya where the Multimedia University and Limkokwing University is situated, it is swarmed by international students. Besides that, an apartment with three bedrooms and common space is preferable among students as they can share the rental fee and utility bills. Having more than one toilet or bathroom is an added advantage. Same goes to the accessibility for public transportations. Bangsar is a strategic location for international students who study at the University of Malaya. The nearby LRT, KTM, and buses make the daily commute more convenient. Assess the safety of the neighbourhood. Is it safe for international students to live in the area, as they could be an easy target for crime?
2. What furnishing should I provide?
International students might be reluctant to buy their own furniture set. Learn to target international students by offering a fully furnished apartment. A successful landlord might want to equip the property with white goods, wardrobes, beds, a couch, and curtains. Adding a vacuum cleaner or even a television is a plus point. Landlords might also want to provide a study desk for tenants. Also, provide a list of emergency contact numbers that could be useful if accidents happened during the tenancy. Other than furnishing, pick-up from the airport might be something that could earn you an extra point as a good landlord, as it is quite tricky for a first-timer to get to the destination.
3. How do I advertise my property?
Find out when the academic year starts. The new academic year generally starts in September and students will start looking for a place a few months before they started going back to school. Take pictures of your property and advertise it through your usual listing websites. Landlords may also advertise their property on channels that offer rental to international students only. Something to keep in mind, it is important for landlords to have accurate pictures of your rental properties as it will provide pointers for the international students to make an informed decision while searching for rental properties from their home country. Landlords also might be struggling to get their properties rented if they are only open for international students. Be flexible to open to a broader range of people like expatriates and local students. If you are a good landlord, student tenants would recommend your place to their juniors and friends who are flying over to study. Before you know it, you already have a chain of tenants at your door!
4. What about the rental agreement?
Landlords can use their standard rental agreement. International students may be enrolled at a college for one academic year. Sometimes shorter or longer. So, make sure it fits their needs for tenancy. For each student tenant, a guarantor is needed to secure the contract. Usually, a parent or guardian will be a referee that is responsible for any financial problem or damage. Landlords can also request information like the student visa, a passport copy, and bank statements. This is to monitor if the tenants have a good financial habit. Other than that, the agreement should be stamped by the Inland Revenue Department (LHDN) by paying the stamp duty for adjudication purpose. It is to protect the parties to the contract in respect of the admissibility of the instrument as evidence in court during a civil proceeding.
5. I should be an open-minded landlord
Many landlords have the assumptions that international students are noisy, unhygienic and disrespectful. Most of it came from a bad personal experience. However, a lot of these stereotypes are not true. Landlords must treat international students the same way they treat the locals. Avoid discrimination based on nationality or ethnic origin. According to the South China Morning Post, African and South Asians people in Malaysia struggle the most when it comes to discrimination in property-hunting. A report in The Star said that nearly 50% of tenants or homeowners prefer tenants of a certain race.
Instead of discriminating people of a certain ethnic origin, consider this as a plus point to learn a new language, culture, and exchange of information. On top of that, it would be wise to set a few rules stating exactly what is expected from the tenants. This is important to avoid any future dispute. List down the do’s and don’ts especially things that may contradict cultural norms within the local community. At the same time, help them understand the local culture and familiarized them with the local area. Also, be responsive to reports and repair for damage. While the tenants take care of your property, you show them the locals’ way of life. It’s a win-win situation!
Renting out property to international students shouldn’t be much of a problem. When landlords understand these needs, your property can be advertised accordingly. Also, with adequate information plus understanding from all parties, international students can be an excellent tenant. While landlords are happy to help students by renting out accommodations, we are keen to help you with student lettings as we have expertise in both property sales and rents!