Investment Insight: Short-term Rentals near KLCC
- November 29, 2023
SR Residences (not the actual name) is a luxury residential building located in the heart of Kuala Lumpur with just a seven-minute... Read More
As a host of short-term rentals who manage and oversee the day-to-day operational matters of many properties, there will certainly be some distinctive experiences in dealing with different rental aspects. Sure, location and property value play a vital part in determining the success of hosting a short-term rental or Airbnb, but what about landlords?
For MyRehat, we do not own any of the accommodations we are hosting. Thus, having a good relationship with all of the properties’ landlords makes the business so much smoother. This means that the selection of landlords is one of the most critical points before closing the deal on a desirable rental.
If you would like to become a host through the fixed-rental or profit-sharing model with a property’s landlord, there are several types of landlord’s personality you will likely encounter:
This type of landlord usually rents out a fully paid property or has no financial pressure to meet the bank loan’s obligation. Cherry on top is he or she is a genuinely nice person who is quite familiar with the ebb and flow of the rental business. If you can showcase your confidence and projection for the rental’s profitability, it will aid in becoming a host to the landlord’s properties. It is imperative that you get a meeting with this landlord as first impression matters and to build a promising rapport.
Having a friendly and trusted relationship with these landlords is important especially during downtimes. During COVID-19 lockdowns, they even offered to waive or give substantial discounts on the monthly rental payment as they have had a positive experience working together.
These types of landlords are foreigners who invest in properties in Malaysia, which goes to show that they are well-to-do and look for tenants who can take care of their properties professionally. You are unlikely to meet this landlord due to the geographical barrier, hence an agent has usually been appointed to do the dealings.
From MyRehat’s experience, these landlords do not bother us too often except if there is a late payment, but even they are understanding since they are not pressured about the bank loan. This group is more understanding of the profit-sharing scheme for Airbnb operations. They mostly favour the time flexibility to use the property when they see fit or sell it once their investment objectives are met. If you have proven yourself to be a good and consistent paymaster, there is a high chance that they refer you to their network of friends who also own many properties. What a great business opportunity, right?
This type of landlord is usually more hands-on and wants to know more about the short-term rental business. While they are generally quite cordial, they may want to pay frequent visits to the properties you are hosting and have questions about your business operations from time to time.
Pro tips to have a good relationship with these landlords are to keep your communication channels open, provide updates when prompted and occasionally send them positive reviews from your Airbnb guests to let them know that their property is of great value.
This is not a personality per se but we could say they are the biggest landlord group. Nowadays many condominiums are being built with the intention of doing short–term rental accommodation business. Units in these condominiums are sold to investors with the promise to allow the management of accommodation businesses. The developer will not manage it but will appoint a third-party operator instead. So, if you are the host or operator, you will be the one dealing with individual landlords.
This is undoubtedly the fastest way to acquire many accommodation units at once but it is also the most difficult and time-consuming. From the start, you will be dealing with a developer so expect everything from reviews, financial projections and reputation to be scrutinized before they choose you to manage the units on behalf of the owners. If you are fortunate and manage to snag this opportunity, you could potentially operate 100 accommodation units or more in one go!
This type of landlord may be checking up on you more often than they should and might even tell you how to conduct your business to their liking. They likely impose the “My Property, My Rule” policy and their ‘FBI’ personality can annoy you from building the relationship you have.
Even if they offer a low rental pricing, you might not want to deal with these landlords for a long-term period especially if they demand a visit to the properties every month or show up unannounced. While it is understandable that their property is like their ‘baby’ and can be a little too protective towards it, you may wish to highlight your displeasure to the landlords.
They can also be overly cost-conscious especially to tenants that have a fixed-rental agreement with them. When there are equipment or facilities in the property that need to be fixed or upgraded, they may ask too many questions and won’t be too happy about spending money. Sometimes they push back to the tenants and hold the tenants responsible for the condition of their property.
This type of landlord might also conduct unnecessary inspections more often than required as they are not used to being one. They tend to pay a little too much attention to their newly invested home whilst forgetting that it now has a tenant who manages the property.
If the rental cost of the property does not match or exceed their bank loan’s commitment, they are always under pressure and insecure if the monthly repayment cannot be made. Therefore, these landlords will bother you especially because they won’t want to cover the monthly loan repayment at all. Profit-sharing method is not advisable for this type of landlord.
All in all, landlords have different temperaments and preferences. So, be careful in choosing the ones that can go along with you and boost your business to the next level, instead of bringing you down.
Note that these are MyRehat’s experiences after dealing with various types of landlords. At the end of the day, it should only be used as a guide because your preferences for a landlord would not necessarily be the same as ours.
Regardless of which landlords you establish a connection and close a deal with, remember to always be open in exchanging your thoughts, accepting each other’s differences, respecting each other’s wishes and keeping an approachable communication.
To get a taste of how MyRehat turns our landlords’ properties into pleasant vacation homes, visit www.myrehat.com and book a unit to experience it yourself!
Disclaimer: The contents of this blog are for informational purposes only. They are not intended to be professional or expert advice. They are the operator’s personal opinions and experiences which may not necessarily reflect the opinions of any organisation or company that they are affiliated with. All investment strategies and investments involve the risk of loss. Nothing contained in this website should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit. We reserve the right to change the overall content and focus. While we try to be as accurate as we can, there may be errors or omissions. We are not able to disclose all information needed to assess a particular situation. Please consult an independent professional advice for your specific needs.