subletting-min

How to be successful in SUBLETTING?

 

Do you own a property which only gives you low rental yield? But you know that that for a property investment to be considered good, it should be able to bring you around 8% rental yield.

How to achieve this? Is it even possible?

YES!! It is!!

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Plan for the best, prepare for the worst.

For a property investment to be considered good, it should be able to bring you around 8% rental yield. If you have some good property in good locations, you shouldn’t face too many challenges to achieve this. However, should you face a situation where your property is not yielding a good rental return, you should stop blaming everyone else in the world and start taking the responsibility. You need to do something about it. You can consider subletting your property.

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Why sublet?

The end goal for subletting is that you can maximise the amount of rental income from one property. For example, instead of renting out a 3 bedroom house or apartment you can convert it into a subletting unit and rent out 5 or more rooms. It requires you to do some additional work. The good thing is, it means more potential profit for you, if you’re willing to put in the work that others are not willing to do.

where

Where to do sublet?

This strategy works best in the areas where there are big populations of students and working-age people where the demand for room rental is high. Locations in and around the city centres, locations around financial and industrial areas, locations around university and colleges are some of the favourite locations for subletting.

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Who should do sublet?

Simply said, if you are an investor who want to increase the yield from your property rental and you are willing to do the additional work OR if you need to pay for monthly instalment for your mortgage, when the property rental return is low, then you should seriously consider doing this.

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How to run successful sublet?

The immediate goals for successful subletting are:

  1. To fill it fast
  2. To maximize the cash flow
  3. To have a system to easily manage it

 

Here are TOP 4 ways for successful subletting:

装修

  1. Renovating and decorating – an important factor to attract potential customers

 

When it comes to attracting and retaining tenants, you need to make them aware of “something better.” Your units have to be better than the competitors.

Now before discussing this, please be clear, the goal is to improve your properties, but don’t OVER-improve your properties. For example, while everyone loves granite kitchen countertops, installing them in subletting units for students rental is probably not your best investment of time and money.

Successful subletting investors understand that a few upgrades on a property help tenants see the property more as a “home” instead of a place they are just renting. They become more inclined to take a care of the property than they would if the property had not been properly looked after. This in turn helps keep maintenance and repair costs lower as well as increases how long tenants stay in the property.

While there is no definitive answer to how much or how little to upgrade, you will need to understand the rental market in your area and what is considered standard. By understanding your competition and listening to the feedback of prospective renters, you will get a good sense of what will help you attract and retain tenants.

Another important factor to consider for renovation is to increase the numbers of room. For example, if your unit has a separate sitting and dining room that is over the minimum room size, you could convert that into an extra bedroom and rent it out to increase the rental yield.

Now I’m not saying subdivide the subletting unit into lots of rooms and cram people into unfit, cramped rooms and maximise the profit you can make from them. I suggest you work within the rules and if you can create extra rooms that match the minimum bedroom size, you could unlock more profit from your subletting unit, legally.

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  1. Systems can assist you in making sure the work is efficient and the results are consistent

 

Set up the systems from vetting the prospective tenants to on-boarding to rental collections and tenant exit. Good systems will help you tremendously in executing the work and ensure sustainability of your subletting.

Make sure to pay attention with the types of tenants you want; don’t mix tenant types and be sure you have a process to vet all applications, or you could be the one picking up the pieces if it all goes wrong.

Set the rules and regulations for tenant to protect the property and ensure safety of all the tenants in the unit. You can brief the potential tenants during vetting process and make sure they understand them. Insert the terms for tenants to abide by the rules and regulations in the tenancy agreement. It is not worth to take the risks with potential tenants who do not agree with the rules and regulations.

Set schedules for property inspection, cleaning and maintenance. Provide the additional services like cleaning which helps in maintaining the property. This will also help to lower the turnover rate in the unit which means better rental yield.

Set up payment schedules and rental payment process to make it convenient for the tenant. You can have rental payment reminder system, payment through online banking system, feedback system and etc for the  tenant convenience.

Once you’re all set up, have a working system and ready to scale up your subletting business, it’s worth getting a property manager to deal with any day-to-day managing of the property. By using a manager to deal with the tenants, this will allow you to set up a leveraged business model that takes little to none of your personal time to manage. You must work on the business, to grow it and not in the business, doing daily chores.

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  1. Real Estate Agents are our good friends

 

You can start by advertising your sublet units on the many platforms available in the market. You can also do some market studies on the rental rates and facilities provided to the tenants from the platforms. Besides that, good Real Estate Agents can also help you find good tenants to stay in your property. Build positive relationship with the agents. They are your eyes and ears in the market, especially when you just starting out. Ask them good questions. Find out what is working and what is not. You have to learn to leverage on each other so everyone can benefit from the deals.

business

  1. Treat Sublet strategy as a business

Believe in yourself and your business. Understand that your subletting business is solving the  problems faced by the tenants. Your business is adding values to the tenants lives by providing good accommodations for them and they are willing to pay for it.

Be ready to do the hardest thing first. Get used to the uncomfortable feeling of not knowing what you’re doing. We all have to do everything for the first time, and none of us does anything very well the first time. Get used to it. Get it done, sorted and out of your way, and feel the spirit of winning to fuel you up for the next task.

Be ready to learn until you know enough to be dangerous in every area of your subletting business, before you delegate the tasks to someone else. If you saw some below expectations results, you have to be able to recognise that. If you don’t, it will be hard to delegate, because you would not know what is good and what is bad.

Create your own luck and your own opportunity by increasing the probability of achieving what you want. So-called lucky people aren’t necessarily getting more advantages than other people. They simply putting themselves out there more. They are ever willing to do more, be more and creating more connections that could lead to other success.

Approach your sublet rental as a business. Work on it and build it up. When you are ready, scale it up. This can help you in your journey towards  your financial freedom.

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In conclusion, if you want to be successful in Subletting, you need to put effort in renovating and decorating the unit  to meet your target customer’s requirement. The goal is to make them feel comfortable and convenient staying in your property. Besides that, you also need to build up stable system to make the operation run smoothly to make sure efficient and effective management of your property. In the meanwhile, we also need to build good relationship with the agents who are your best informers from the market. Lastly, treat the whole strategy as a business so it can be one of your many channels of income.

 

Want to learn more proven strategy about property investment ?

Click the link below to join Rachel Lim’s FREE workshop. 

✅ IMC – Kota Kinabalu 中文班
Date : 6 July 2019 (星期六)
Time : 8.30am – 6.00pm
Venue : Ming Garden Hotel
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✅ IMC – Kuching 中文班
Date : 07 July 2019 (星期天)
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✅ Flip Your Way – KL English
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Time : 7pm – 10.30pm
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✅ Flip Your Way – KL 中文班
Date : 11 July 2019 (星期四)
Time : 7pm – 10.30pm
Venue : CORE Starfish Hall, Wisma Goshen, Plaza Pantai
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✅ Flip Your Way – Seremban English
Date : 13 July 2019 (Saturday)
Time : 1pm – 4.30pm
Venue : Royale Chulan Hotel, Seremban
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