The rental property market in Malaysia is constantly changing and evolving. With property seekers and small businesses deterred by rising house prices, residential and commercial rental properties in the country are more popular than ever before. They offer greater flexibility and wider access to shared amenities. Continue reading to find out everything you should know as a landlord in Malaysia.
There are no tenancy laws in Malaysia
Malaysia is one of the few countries with no tenancy laws or acts currently in place for the landlord or the tenant. As a result, the country tends to be pro-tenant and the sole governing document of a tenancy is the tenancy agreement. There are several differences between a tenancy agreement and a lease. A lease is issued for a rental period of three years or more and is also known as a registerable interest on the title of a property. A tenancy agreement is governed by several acts of law, such as the Contracts Act 1950, the Specific Release Act 1950, and the Distress Act 1951. A lease, on the other hand, is only governed by the National Land Code 1965.
Tenancy agreements are extremely important
As there are no tenancy laws in Malaysia, tenancy agreements are extremely important. They must not only be well-written but include a comprehensive list of the duties and obligations of the tenant as well as the landlord. They must also include property details, tenancy duration, renewal clauses, rental and deposit amounts. and how, when, and where monthly rent payments should be made. When you are completing the tenancy agreement for your next property, such as a rumah sewa puncak alam, you must ensure both parties have read and understood their individual responsibilities before signing on the dotted line.
How to handle tenant disputes
Tenant disputes are rare but knowing how to handle them can save you a considerable amount of time and money in the long run. One of the key takeaways you must remember is not to act on emotions. Most disputes can be resolved verbally if both parties are willing to accept responsibility. You must review the tenancy agreement before making any rash decisions. If the specific issue is clearly outlined in the tenancy agreement, you must take the appropriate action. If the specific issue is not covered in the tenancy agreement, you can work towards reaching a conclusion both parties are happy with, or you may be required to enlist the help of a lawyer. To prevent this situation from arising, you must select your tenants wisely and adhere to the terms and conditions of the tenancy agreement wherever possible.
The cost of being a landlord
Being a landlord is a great way to earn some extra income but in order to start generating cash, you must first spend some. Before you advertise your property for rent, you must ensure it has been furnished to an agreeable standard and is suitable for habitation. The costs involved in preparing a rental property differ, but most landlords share a list of common items. For example, a simple lick of paint can breathe new life into a bungalow and freshen up a high-rise apartment. You must also treat each property to a thorough deep clean before and after each tenancy to slow down the effects of gradual wear and tear and neglect. The cost of furniture and soft furnishings will depend on whether your rental property will be offered furnished or unfurnished. There are several benefits associated with both options and which one you choose is largely down to personal preference. As a landlord of a rental property, you may also be responsible for the maintenance and upkeep of the property in the event of a breakage or leak. Examples of problems you may be expected to fix and pay for include piping, wiring, and plumbing issues.
The importance of declaring rental income
If you generate income through one or more rental properties, this must be declared whilst filing for taxes. This is not explicitly stated in the Income Tax Act 1967 but is a key requirement of landlords based in Malaysia. The Act, however, does state that a person who makes an incorrect return or gives false information is guilty of an offence and will be liable for a fine. Fines can range between 1,000 and 10,000 RM. You may also be required to repay double the amount of tax you failed to pay.
There are several benefits associated with becoming a landlord in Malaysia. But aside from generating a second stream of income, there are a number of additional factors you should familiarise yourself with ahead of time. You should know that there are no tenancy laws, tenancy agreements are extremely important, how to handle tenant disputes, the costs involved with being a landlord, and the importance of declaring rental income.