LATELY many “mentors or sifu” who portray themselves as experts have appeared in the real estate investment arena. Many people in search of knowledge seek them out to learn how not to be deceived in property transactions, as well as to make the right choice before committing to financing agreements that typically involve a repayment period of up to 35 years.
Nevertheless, these mentors generally only share hot locations, market research and property buying procedures without disclosing the risks and challenges that come after purchases, especially if the property is bought for investment purposes such as for rental income.
One way to gain experience in renting out real estate and generating income with minimum capital - without purchasing property via long-term bank financing - is through real estate sublets.
Sublet is the management and rental of property owned by others. By embarking on this venture, you can test your physical, mental and emotional stamina, and prepare yourself to manage your own property later. If you subsequently find that you are not made for the rental business, you still have the opportunity to withdraw from the field, or at least change your investment strategy.
Let me share some stories to give you an overview of the importance of real estate sublets.
NO TENANTS FOR OWN HOUSE, BUT SUBLET HOUSES FULLY RENTED
Naqib is a real estate investor. He was somewhat hesitant to pick up his home key from the developer. It concerned him that some of his friends who had taken their keys earlier had yet to rent out their properties even though the houses are located on the Klang Valley outskirts, which are fast developing.
If he sold his new property he would be penalised because it was just completed. “I regret not fully researching the real estate potential in the area beforehand,” he told himself.
Naqib then decided to open several sublet units around Kuala Lumpur to help pay the monthly loan installment of his new home.
Now he is very grateful that with the sublet method, he does not need to use his salary to pay his home loan. The sublet profit is more than enough to cover the monthly installment.
Today, Naqib is actively increasing the number of sublet units in preferred locations to increase his revenue.
THE REAL POTENTIAL OF REAL ESTATE IS HIGHLIGHTED WITH A SUBLET RENTAL STRATEGY
Nurain, a successful property investor, was quite worried about the potential of her recently acquired asset, with the surplus of new properties in the market. Located within 300 metres to the light rail transit, she wanted to rent the house at RM2,000 per month as its monthly loan installment was around the amount. However, looking at the demographics in the area, she had doubts if anyone would want to rent at that rate. Therefore, to maximise rent potential, she adopted some sublet techniques to her own home.
With an appropriate rental strategy and some renovations commonly done by sublet entrepreneurs, her home transformed into a valuable income-generating machine. Today, she can afford to smile ear-to-ear because the unit can be rented out for up to RM3,000 per month, far exceeding the initial target.
The general public should be aware and clear of their real estate investment goals before venturing into the field. And property sublet can be the best option and will grow in popularity as not everyone can afford and have time to manage their own properties.
Nothing is wrong with sharing the subsistence with sublet entrepreneurs, real estate managers and agents out there as long as your property is taken care of and there are secure rental payments. It is a win-win situation.
Many people have benefited from my sharing of experience and have built a stable portfolio of real estate investments using the property sublet strategy. If you would like to know more about this, visit the MyRumah Property Showcase organised by The New Straits Time Press Bhd on March 9 to 11 at SACC Shah Alam.
The #SUBLETMETHOD team and I will share our experience with you.