What is your outlook for the 2017 property rental market and what are the average yield figures landlords can expect for residential and commercial properties?
The demand for residential rental units will continue to be strong this year. Nevertheless, this does not necessarily mean landlords will enjoy high yields. Due to the economic slowdown and oversupply of several product categories in certain areas, yields are not as attractive compared to a year before.
For instance, a typical terrace house or condominium unit in Johor Bahru could easily fetch up to more than RM2,000 a month. However, as of last year, these same units were being rented out for RM1,700 – RM1,800. Similarly, rental figures have dropped by roughly 10%- 15% in hotspots such as KLCC and Mont Kiara as well as most areas in Greater Kuala Lumpur. Currently, the average rental yield for the residential sub-sector tops 5% whereas commercial properties could garner 3.5%- 4%.
For those looking to rent residential and commercial properties, which areas should potential tenants look out for, respectively?
Foreigners still prefer to rent in the city centre, preferably in areas where their community is clustered. For instance, Korean expats gravitate towards Ampang when looking for units to rent.
Nevertheless, with the convenience brought on by new public transportation infrastructure such as the MRT and with the introduction of Uber and Grab Car, expats are now more willing to explore areas like Puchong, Kota Damansara, Petaling Jaya and Subang Jaya. Local tenants have more issues to consider when deciding where to rent, including commute to work, what are the nearby schools, access to amenities, personal budget as well as property features.
Properties in commercial areas such as business centres are promising. Examples include SS2 in Petaling Jaya and Jalan Kenari in Bandar Puchong Jaya. Commercial units in thriving residential neighbourhoods are good options too. When renting a shop lot, it all depends on the nature of the business, catchment area and traffic flow. Other factors to consider are signboard advantage, nature of property, crowd assembly and net business area or lettable area.
What is the procedure involved and required documents when renting a property?
The most viable way to secure a rental property is by engaging a professional property agent. A credible agent will carry out all the necessary steps and procedures in alignment to market practices, thus protecting both the landlord’s and tenant’s interest.
Documents required for individual tenants:
1. Photocopy of IC or Document proving identity i.e. passport, student card
2. Booking form or Letter Offer to Rent
3. Earnest money deposit
Documents required for corporate tenants:
1. SSM registration form for sole proprietorship or partnership company
2. Form 9, Form 24, Form 49 for Sdn Bhd company
3. Tenant’s IC or Passport
4. Employment permit
5. Booking form or Letter Offer to Rent
6. Earnest money deposit
Meanwhile, landlords will have to certify ownership of their property by submitting official documents such as quit rent forms, sales and purchase agreement and electricity bill from TNB