Miichael Yeoh

Author: miichaelyeoh

  • 10 Key Things on Tenant Management

    10 Key Things on Tenant Management

    Written by Goh Chee Yong

    Managing property tenants effectively is crucial for maintaining the value of your property, ensuring a steady income stream, and minimising stress. Whether you’re a seasoned landlord or new to property management, understanding how to navigate tenant relationships and responsibilities can make a significant difference. What I am going to share here are the things that benefited me as a person whom do just a handful of residential property rental and sublet room rental in Peninsular Malaysia. Hence, there is no right or wrong it’s just my personal experience. Here are 10 key things to consider for effective tenant management:

    1. Thorough Screening Process

    Before you even consider signing a tenancy agreement, it’s essential to conduct a comprehensive screening of potential tenants. This process should include background checks, credit reports, and verification of employment and rental history. A detailed application form (if high demand) can provide insights into a tenant’s reliability and ability to pay rent on time. By carefully vetting applicants, you can avoid many common issues such as late payments or property damage yet this only happen if your property is under high demand. If you want to skip all the above steps, you may also choose to talk to the prospect existing or ex-landlord for reference. You might wonder, how do I get their landlord contact number? Well, just ask the prospect to call their landlord using their hand phone straight away then verify with the person on the other end whether the prospect is a good tenant. What if the prospect refuse to call? I would rather skip for next prospect. If prospect said this is their first renting then I will have to opt for other way for reference by their company or family member.       

    2. Clear and Comprehensive Tenancy Agreements

    A well-drafted tenancy agreement is fundamental in setting expectations and protecting both parties. Ensure that your tenancy agreement covers all critical aspects such as rent amount, due dates, security deposits, maintenance responsibilities, and rules regarding pets or subletting. It’s important to make the tenancy clear and detailed to avoid misunderstandings. Both you and your tenant should fully understand and agree to the terms before signing. You may choose to engage a lawyer to draft the tenancy agreement for both of you with a professional fee or you may choose to use any tenancy agreement template from online or offline platform by editing the details to cater for your tenancy needs. In Malaysia, if you secure your tenant through a property agent or a real estate negotiator they will probably offer to prepare the tenancy agreement as part of their service with additional charges on top of their agent fee.   

    3. Regular Property Inspections

    Regular inspections help you stay on top of the property’s condition and address maintenance issues before they escalate. Schedule routine visual inspections, ideally every 6-12 months, and document the property’s condition through photos or detailed notes if possible. This not only helps in maintaining the property but also serves as a reminder to tenants to take good care of the space. For me, I prefer to visit my tenant during festive season with a “Thank You” gift or hamper while taking the chance to enter their house and of course excuse myself to enter their bathroom for quick observation. There is a saying “How you do anything is how you do everything.” if the tenant keeps the bathroom tidy clean very likely they take good care of the house and vice versa. Please remember all the visit must inform the tenant upfront as stipulated in the tenancy agreement even if it’s just a “Festive Season Visit”.   

    4. Responsive Maintenance and Repairs

    Timely maintenance and repair responses are crucial for tenant satisfaction. Make it a priority to address repair requests quickly and professionally. Implement a system for tenants to report issues, and ensure you follow up promptly. Maintaining a good rapport with reliable contractors can also streamline the repair process. Effective maintenance not only keeps your property in good shape but also fosters a positive relationship with your tenants. I always tell my tenant to call me if there is any urgent or serious matter happen to the property or inside the property. For small matters like faulty light bulb I will ask them to buy a new bulb and replace it then deduct the amount from next month rental. I do have my regular handyman, plumber and electrician contact just in case I need their service to fix my tenant issue.    

      

    5. Clear Communication Channels

    Open and clear communication is the cornerstone of successful tenant management. Establish preferred communication channels and ensure that tenants know how to reach you for urgent issues or routine inquiries. Whether you use email, phone calls, or a property management app, being accessible and responsive helps build trust and resolve issues efficiently. I request my tenant to WhatsApp me regarding rental payment or any issue related to their house. I also tell them to call me directly if it’s urgent and serious matter. Similarly, I told my tenant to reply my WhatsApp and answer my call when I contact them especially when they fail to pay rent upon due date. I made it clear that I will visit them at the property if I cannot reach them through phone call. 

    6. Consistent Rent Collection Procedures

    Having a structured rent collection process helps prevent payment issues. Decide on a payment method that works for both you and your tenants, such as online payments or cash deposit through cash deposit machine, try to avoid cash collection as its time wasting and involve risk. Clearly outline the rent due dates, late fees (if any), and the procedure for handling missed payments in the tenancy agreement. Enforcing these policies consistently ensures fairness and avoids confusion. I will send WhatsApp message including my bank account details one week before rental due date to remind my tenant of paying their rent on time. Then I will send another friendly reminder message on the due date morning to remind tenant once again. If tenant fail to make payment by 8pm on the due date, I will call them directly. If they don’t answer my call then I will make another call at 11pm. After 12am midnight if they still haven’t bank in or return my call, then I will give them a 30 mis-calls combo. Normally tenant will reply the next day morning stating their reason for delay and made payment instantly. If tenant requesting for extension of time for them to pay rental then I will grant them no more than one week. I will lodge police report without hesitation if my tenant chooses to ignore my call and drag their rental payment after the one-week extension. 

    7. Tenant Rights and Responsibilities

    Both landlords and tenants have specific rights and responsibilities, which can vary depending on local laws. Familiarize yourself with landlord-tenant laws in your area and ensure that you comply with all legal requirements. It’s equally important to communicate these rights and responsibilities to your tenants. Educated tenants are less likely to make mistakes or violate lease terms unintentionally. I will request my tenant to go through the tenancy agreement before signing and brief the tenant on the rights and responsibilities of both tenant and landlord. On top of that I make sure the tenant understands that tenant rights stipulated in the tenancy agreement only apply when tenant pay rental on time. Please do not argue on tenant’s right with me if they fail to pay rental. I make it clear to them that if they can’t afford to pay rent then the only way to resolve the issue is to return the house and move somewhere else in a peaceful manner.

    8. Effective Conflict Resolution

    Conflicts are almost inevitable in property management, whether they are related to maintenance issues, noise complaints, or disputes between tenants. Develop strategies for resolving conflicts amicably and professionally. Address problems promptly and listen to both sides before making a decision. Maintaining a fair and balanced approach can help resolve issues without escalating tensions. For conflict between myself as a landlord with my house tenant, I will resolve our conflict follow the tenancy agreement. If for sublet room rental, I told all room tenant to abide to the house rules and resolve any dispute among themselves. If the matter still cannot resolve then I will tell them either one or both of them have to leave so that their disputes does not affect my other tenants. 

    9. Professional and Friendly Attitude

    Your attitude as a landlord can significantly impact the tenant relationship. Strive to be professional yet approachable. Being friendly and respectful creates a positive environment, while maintaining professionalism ensures that you are taken seriously. Building a good rapport with tenants can make managing the property smoother and more enjoyable for both parties. I can be friendly to my tenant as long as they made rental payment on time. If my tenant ignores my call while delaying their rental payment then I will let them see the unfriendly side of me. I will speak firmly to them demanding for my rental payment before it escalate to police report stage.  

    10. Stay Organized and Document Everything

    Organisation is key to effective property management. Keep detailed records of all transactions, communication, and property-related documents. This includes tenancy agreements, maintenance requests, and inspection records if any. Having a well-organized system helps in managing multiple properties and provides a reference in case of disputes. Use property management software or apps to streamline record-keeping and make information easily accessible. Keep your record up to date, remember to renew tenancy upon expiry. It is important to change the utility name (i.e.: TNB and water bills) to your tenant’s name after signing the tenancy agreement to avoid the risk of tenant unsettle huge bills. Otherwise, you will have to monitor the utilities bill every month to ensure tenant settle their utilities bills without fail.  

    Conclusion

    Managing property tenants involves a mix of thorough planning, clear communication, and responsive actions. By focusing on these ten key areas, I believe you can foster a positive and professional relationship with your tenants, maintain the value of your property, and ensure a smooth management process. Whether you’re dealing with applications, repairs, or disputes, a proactive and organised approach can lead to a more successful and less stressful tenant management experience.

  • Road to Financial Freedom

    Road to Financial Freedom

    Road to Financial Freedom: Episode 3 Recap

    We’re excited to share that we’ve just wrapped up Episode 3 of our Property Talk series, featuring the insightful CY Goh. In this episode, CY Goh delved into the crucial topic of achieving financial freedom through strategic planning and disciplined execution.

    CY Goh shared a wealth of knowledge, drawing from his personal journey and the strategies that have fueled his success. After years of attending numerous courses and learning from top industry experts, Goh embarked on his property investment journey. Today, he proudly shares the techniques and insights that have helped him attain financial independence.

    For those interested in learning more, we invite you to watch the recorded video of this episode. You might find that one of Goh’s strategies resonates with you and fits your financial goals.

    However, please remember that the strategies shared by CY Goh are based on his personal experiences and perspectives. They may not be suitable for everyone, and we encourage viewers to exercise their own discretion and consider their unique circumstances before applying any of the advice.

    Enjoy the video, and may it inspire your own journey towards financial freedom!

    UPCOMING

  • Unlock Rental Property Success with a Strong DSCR

    Unlock Rental Property Success with a Strong DSCR

    Ever come across the term Debt Service Coverage Ratio (DSCR)? If not, don’t worry—I’m here to simplify it for you. While it might seem complex, DSCR is actually a straightforward concept that plays a crucial role in real estate investing.

    What is Debt Service Coverage Ratio (DSCR)?

    The Debt Service Coverage Ratio (DSCR) is a key metric that assesses whether a property’s income is sufficient to cover its debt obligations. Think of it as a financial report card for real estate investors, showing if a property is financially sustainable. Let’s break it down for easier understanding:

    The DSCR Formula

    DSCR = Net Operating Income (NOI) / Total Debt Service (TDS)

    • Net Operating Income (NOI): The income generated by the property, including rent and other sources, after deducting expenses like maintenance, property management fees, and taxes.
    • Total Debt Service (TDS): The total annual payments required to service the loan, covering both principal and interest.

    How to Interpret DSCR

    • DSCR > 1: The property generates more income than needed to cover its debt—this is a positive sign!
    • DSCR < 1: The property’s income is insufficient to cover the debt—this signals potential risk.

    A higher DSCR indicates a lower risk of default, making the property more attractive to lenders.

    How DSCR Works in Practice

    Let’s see DSCR in action with a practical example:

    1. Net Operating Income (NOI):
      • Peter’s rental property generates RM50,000 annually.
      • Annual expenses total RM20,000.
      • NOI = RM50,000 – RM20,000 = RM30,000.
    1. Total Debt Service (TDS):
      • Peter’s annual mortgage payment is RM24,000.
      • Total Debt Service (TDS) = RM24,000.
    1. DSCR Calculation:
      • DSCR = RM30,000 (NOI) / RM24,000 (TDS) = 1.25.

    With a DSCR of 1.25, Peter’s property generates more income than needed to cover the debt, indicating financial stability and a comfortable margin for loan payments.

    Why DSCR Matters?

    The Debt Service Coverage Ratio (DSCR) is a critical indicator in real estate investing, helping you assess whether a property’s income can cover its debt obligations. Whether you’re looking to own rental properties or simply exploring the real estate market, understanding DSCR is essential for your success. By maintaining a healthy DSCR, you can build a solid foundation for your investments and ensure long-term profitability.

    From The Desk of Miichael Yeoh

    Check out the latest article on how Budget 2025 impacts the property sector

    Malaysia Budget 2025: Enhancing Homeownership

  • Property Talk (EP 1) with Miichael Yeoh & WK Ng

    Hi Everyone,

    Here is the recorded version of my bi-weekly talk with Mr. WK Ng from last Thursday. We had an in-depth discussion covering everything from buying your first house to property investing. With over 30 years of experience as an investor, Mr. Ng offers valuable insights and a methodical approach that should not be missed.

    Join us for our upcoming live webinar (EP 2) on Thursday, 15th August 2024, at 8:30 PM. Our special guest, Dr. Kenneth Yew, will be discussing property financial planning.

    For more details and to sign up, please visit our

    Upcoming Event

    Attending a live webinar offers several benefits:

    1. Real-Time Interaction: You can ask questions and receive immediate answers, fostering a dynamic and interactive learning experience.
    2. Access to Experts: Webinars often feature industry experts and thought leaders, providing you with valuable insights and up-to-date information.
    3. Convenience: Participate from the comfort of your home or office without the need for travel, saving time and expenses.
    4. Networking Opportunities: Connect with other attendees, share ideas, and build professional relationships.
    5. Immediate Application: Gain practical knowledge and strategies that you can apply immediately to your work or personal projects.

    To get latest updates please subscribe to my blog.

    See you on 15th August 2024, 8.30pm Malaysian Time.

    From the Desk of Miichael Yeoh

  • EPF Borrowing Scheme: Is This Legal?

    EPF Borrowing Scheme: Is This Legal?

    What can I say? Malaysians are incredibly innovative. We always find all sorts of ways to make money. Recently, I stumbled upon an intriguing article online about a new scheme: borrowing against your EPF. Yes, you heard me right. If you have money in your EPF and you are between the ages of 48 to 55, you are supposedly eligible to borrow. But is this scheme legal? The answer is a resounding “NO.” There is no such scheme approved by KWSP. This is the creation by syndicates.

    I discovered that many people are promoting this scheme. Approval is alarmingly easy; all you need is a copy of your MyKad and your latest EPF statement. As long as there is money in your account, consider your loan approved. Of course, the interest rate is sky-high, but the borrower doesn’t need to repay until EPF withdrawal.

    Picture Credit: Focus Malaysia

    These types of loans pose a significant risk to the financial security of retirees. With the promise of immediate cash, many are tempted to apply, potentially jeopardizing their retirement. EPF contributors are strongly advised to seek advice before considering such schemes.

    From the Desk of Miichael Yeoh

  • Property Investment: Success or Bankrupt?

    Property Investment: Success or Bankrupt?

    Many people are enthusiastic about making money from property investment. After all, who wouldn’t want a reliable safety net for the future? Property can indeed offer financial security, but this is only true if you plan properly and do your due diligence before buying. While it may sound lucrative, without the correct approach, it can quickly turn into a financial disaster.

    I recall an incident that starkly highlights this point. After one of my seminars organized by a property developer, a couple in their 30s approached me. They shared a heartbreaking story: they had declared bankruptcy and had a 6-year-old child to care for. Their downfall began when they followed advice from a so-called property expert and started purchasing properties beyond their financial means. The rental income from these properties was either too low or non-existent, and they couldn’t find tenants. To make matters worse, the so-called expert was nowhere to be found, leaving the couple to face the harsh realities alone.

    What lesson can we draw from this? The pursuit of wealth through property investment can sometimes turn into a nightmare, even if you believe such misfortune won’t happen to you.

    Click Register NOW

    Let’s rewind a bit. Had this couple engaged in proper financial planning, their situation might have been very different. A crucial aspect of financial planning is understanding your monthly income against your expenses. Personally, I wouldn’t consider purchasing a property unless I had at least 12 months of installment payments saved in advance, especially if I had to take a loan from the bank. There is much more to financial planning, but diving into the details would be lengthy. The key takeaway is this: invest within your capacity. Don’t let greed drive your decisions, as it might be too late to turn back once you’re down that road.

    The desire to become a successful property millionaire is understandable, but it’s essential to think carefully before making such a bold step.

    I hope this article opens your eyes to the realities of property investment.

    If you need expert advice on your property investment journey, please email us at info@miichaelyeoh.com.

    From the Desk of Miichael Yeoh

  • Discover The Keys to Successful Property Investment (Live Webinar)

    Discover The Keys to Successful Property Investment (Live Webinar)

    Are these familiar struggles for you?

    🏠 Feeling lost in the world of property investment?

    💰 Watching your investments drain your finances?

    😱 Scared off by terrifying investment horror stories?

    💸 Struggling to secure funds for investment?

    🏦 Facing obstacles getting a loan from the bank?

    🔍 Bought a property but can’t find a tenant?

    You’re not alone. But here’s what awaits you on the other side:

    • Witnessing others prosper through property investment while you sit on the sidelines.
    • Regretting missed opportunities for passive income generation.
    • Reflecting on how better financial planning could have changed your life.

    What’s in store for you at my seminar?

    🔍 Insights to equip yourself for successful property investment.

    ⚠️ Awareness of common pitfalls to avoid in the property market.

    🏡 Understanding the crucial components of property investment.

    📊 Appreciation for the importance of property data analysis.

    🔍 Guidance on conducting thorough due diligence before buying.

    💼 Experience the transformative power of effective financial planning.

    Audiences and events I’ve spoken and organized for property buyers/investors, developers, conventions, and property study trips.

    Don’t let uncertainty or fear hold you back! Join me and unlock the doors to a brighter financial future!

    Register your FREE SEATS Now as seats are limited…..

    See you soon,

    Miichael Yeoh

  • Secondary Property Purchase Fees for Foreigners in Penang, Malaysia: Complete Guide 2024

    Secondary Property Purchase Fees for Foreigners in Penang, Malaysia: Complete Guide 2024

    In every country, additional fees are typically involved when purchasing property as a foreigner. Malaysia is no exception, and these fees vary from state to state. Let’s focus on Penang.

    The fees involved depend on whether you’re purchasing secondary property on the island or the mainland. Here’s a breakdown of the fees applicable:

    Property Type

    LocationStrata (Min)Landed (Min)
    IslandRM 1,000,000RM 3,000,000
    MainlandRM 500.000RM 1,000,000

    State Consent

    State Consent
    (Individual)    		RM 10,000
    (Residential)    		RM 20,000
    (Commercial)
    State Consent
    (Company)    		RM 20,000
    (Residential)    		RM40,000
    (Commercial)

    State Levy

    RM 1 mil to RM1.5 mil1.5% of purchase price
    RM 1.5 mil above3.0% of purchase price

    Please be aware that the figures provided are accurate as of the time of writing and may be subject to change in the future.

    From the Desk Of Miichael Yeoh

    Buying Property in Malaysia: A Foreigner’s Guide
  • 7 Critical Factors to Consider Before Investing in Property

    7 Critical Factors to Consider Before Investing in Property

    Investing in property can be lucrative, but it requires careful planning and consideration. Based on my experience in the industry, I’ve seen many success stories as well as horror tales of financial loss and even bankruptcy. To avoid pitfalls, you must prepare thoroughly. Here are seven critical factors to consider before investing in property:

    1. Objective

    • Define Your Goals: Have a clear investment objective. Determine whether you’re looking for short-term gains or long-term investments.
    • Rental Strategy: Decide how you plan to rent out the property. Is it for long-term tenants or short-term rentals like Airbnb?
    • Return on Investment (ROI): Set a target ROI that aligns with your risk tolerance. Remember, higher risk typically comes with higher returns. Personally, I prefer calculated risks with an average return.

    2. Financial Planning

    • Affordability: Assess your financial situation meticulously. Don’t overextend yourself by buying properties beyond your affordability level.
    • Savings: My rule of thumb is to have at least 12 months of bank installments saved before purchasing a property. This cushion helps avoid financial stress.
    • Budgeting: Carefully calculate your income and expenses to ensure you can manage the investment without compromising your financial stability.

    3. Bank Loan Eligibility

    • Pre-Approval: Understand how much the bank is willing to lend before committing to a purchase. Getting pre-approved for a loan can prevent future disappointments.
    • Creditworthiness: Ensure your financial records and credit score are in good shape to qualify for better loan terms. Banks favor prudent borrowers.

    4. Demographics

    • Population Density: Choose locations with a high population density to ensure demand for your property.
    • Target Audience: Consider who your potential renters or buyers will be. A property in a well-populated area is more likely to attract tenants and buyers.

    5. Infrastructure

    • Accessibility: Ensure the property has good access to roads, public transport, and essential services. Lack of infrastructure can make it difficult to rent or sell the property later.
    • Local Development Plans: Check with the local council for any planned infrastructure developments that could enhance the property’s value.

    6. Pulling Demand

    • Market Demand: Avoid properties in areas with little to no demand. Research the local market and industries to understand who will be your customers.
    • Economic Activity: Proximity to thriving industries or business hubs can increase rental and resale value.

    7. Future Prospects

    • Growth Potential: Investigate the area’s future growth prospects. Look for upcoming developments, planned amenities, and general economic outlook.
    • Long-Term Viability: Ensure the location has the potential for long-term growth, making it easier to rent or sell the property in the future.

    Investing in property is not just about buying; it’s about making informed decisions based on thorough research and strategic planning. By considering these seven factors, you can mitigate risks and increase your chances of a successful investment.

    From the desk of Miichael Yeoh

  • From Property Millionaire to Property Millionhair

    From Property Millionaire to Property Millionhair

    Many individuals aspire to become property millionaires. They immerse themselves in books, seminars, and courses, each with their own pace – some favoring quick success, while others opt for a slower, steadier approach. What’s your preference?

    But caution is warranted. Sadly, many who aspire to property wealth end up with a different outcome – becoming “property millionhairs” instead. Take Jerry, for example (not his real name). Despite a net income of RM5K, he impulsively purchased five properties at once, enticed by promises of a RM200k cashback per unit. With five units, he envisioned instant wealth. However, blinded by the prospect of millionaire status, he overlooked critical details, such as the absence of the cashback clause in the contract.

    To realize his dream, Jerry enlisted his girlfriend’s help to secure mortgage approval, as his income alone wasn’t sufficient. The terms seemed promising – the cashback would be disbursed upon the bank’s final payment release, just a few months away. Jerry was ecstatic, anticipating wealth raining down on him.

    When the cashback arrived, Jerry felt like royalty. His eyes gleamed with newfound riches, and he indulged in extravagant purchases – a RM300k car, luxury watches, jewelry, and more. He also spent a substantial sum renovating his properties for potential tenants.

    Yet, eight months later, reality set in. Jerry’s million was dwindling rapidly, with vacant units generating no income to offset his hefty RM12k monthly mortgage payments. Facing financial ruin, he discovered his properties were valued 40% below their purchase price, rendering them unsellable without further financial strain.

    Do you want to emulate Jerry’s fate? Consider these warnings:

    Packages like Jerry’s often involve properties with poor marketability.

    Jerry’s scheme of securing multiple loans or called compression method with a single income is fraudulent and can lead to legal consequences.

    Jerry may have salvaged some funds, but others haven’t been as fortunate. I’ve encountered individuals on the brink of bankruptcy, struggling to provide for their families, a heartbreaking reality.

    Banks are now more vigilant, scrutinizing loan applications meticulously to prevent such misfortunes. Yet, at the heart of it lies human greed, fueled by promises of grandeur.

    For me, prudence reigns supreme. I advocate for careful planning, eschewing shortcuts for a methodical approach. If I can’t cover at least 12 months of mortgage payments, I refrain from purchasing, no matter how enticing the property. Financial responsibility dictates my decisions. To everyone out there, heed this advice: stay within your means. When deals seem too good to be true, exercise caution. Protect your financial well-being, for our lives are invaluable.

    From the Desk of Miichael Yeoh

  • Malaysia’s Property Market up 34.3% QI 2024 (with detailed transaction records)

    Malaysia’s Property Market up 34.3% QI 2024 (with detailed transaction records)

    Welcoming news to all property buyers.

    Malaysia’s real estate market continues to thrive, with 104,297 transactions valued at RM56.53 billion recorded in the first quarter of 2024 (1Q24). This marks a 34.3% increase from the same period in 2023, which saw 89,024 transactions worth RM42.11 billion.

    “The government aims to ensure that economic planning, which integrates catalytic projects with inclusive development, will sustain long-term growth in the real estate market,” Amir Hamzah remarked in a statement today.

    Valuation and Property Services Department director-general Abdul Razak Yusak attributed the strong performance to significant increases in transactions across all subsectors, particularly commercial real estate (up 51.5%) and agricultural land (up 64.2%).

    “Government initiatives, such as extending the stamp duty exemption for first home purchases up to RM500,000 until December 2025, have been pivotal in boosting the real estate market,” he added.

    In terms of subsector growth, commercial real estate led with a 33.4% increase, followed by residential at 16.6%, agricultural at 13.7%, and development land at 10.7%.

    Additionally, the number of unsold completed residential properties (overhang) decreased to 24,208 units valued at RM16.49 billion, compared to 25,816 units valued at RM17.68 billion in the fourth quarter of 2023 (4Q23).

    “Preliminary data for the Malaysian House Price Index (MHPI) in 1Q24 showed a slight increase to 216.9 points (RM467,997 per unit), reflecting an annual growth rate of 0.5%. Most states experienced moderate growth between 0.5% and 4.6%, except for Kuala Lumpur, Penang, Perak, Melaka, and Sarawak,” Abdul Razak noted.

    Here are the detailed transaction records: