Renting out Investment Property in Malaysia

Owning and renting out an exclusive investment property in Malaysia is a highly lucrative opportunity to earn residual income and turn a profit, if done correctly. Considerable research should be conducted ahead of time to ensure that wise decisions are always being made in order to make money out of the investment.

As a foreign investor, having purchased that luxurious Mont' Kiara condominium you have had your heart set on, the next practical strategy would be to rent it out to minimise transaction costs and put it to 'work' immediately. This will help facilitate mortgage repayments in the short-term, while benefiting from the capital appreciation of the property in the long-term.

Besides earning regular residual income and a strong net worth in the long run, investors will also enjoy the tax breaks and having tenants maintain the upkeep of your property. Whilst rental income is taxable in Malaysia, you can deduct most of the expenses incurred in maintaining the property, including repairs made to upkeep the property, commissions paid to agents, quit rent, assessment tax, and also the interest portion of your mortgage.

Selecting the ideal tenant is a very important decision to ensure a smooth, hassle-free process. Tenants should be carefully considered based on their ability to make payments on time (holding a good credit with the banks), handle minor repairs on their own, and keeping the property in a good condition.

Ensure that a Tenancy Agreement is drawn up and mutually agreed on, before being signed, registered and duly stamped. A standard Tenancy Agreement usually specifies terms requiring the tenant to pay two months' rental in advance as a security deposit, and a specified amount as a utilities deposit, which will be returned to the tenant upon termination of the Tenancy Agreement.

To ease the process of renting out your investment property, you are advised to engage the services of property managers or real estate agents who can take on the responsibility of screening prospective tenants, ensure that the proper documentation is in place, and guarantee that your property is in good hands when you are not able to be physically present in Malaysia.

Foreigners considering buying an exclusive property in Malaysia should weigh in these factors carefully when renting it out, so as to reap the benefit of rentals and make the property 'work' to repay the capital investments incurred. This will ultimately determine and drive the success of any property investment venture.

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