Buying new house - rent out current home or use savings

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kick99

New Member
I am about to buy a new house. My current home is under water so I will not be able to sell it at this time. I have enough in savings for the down payment on the new house plus to put away enough money to pay the mortgage on the current home for 1 year. (Possibly 2 years.) I know that in this area I can rent it out for enough to cover my mortgage. My question is would it be better to leave it empty (no potential risk of damages by renters) or rent it out?
 
jocelynm88

jocelynm88

New Member
I am about to buy a new house. My current home is under water so I will not be able to sell it at this time. I have enough in savings for the down payment on the new house plus to put away enough money to pay the mortgage on the current home for 1 year. (Possibly 2 years.) I know that in this area I can rent it out for enough to cover my mortgage. My question is would it be better to leave it empty (no potential risk of damages by renters) or rent it out?
I would rather setting two types of rental, because thru my experience:

1) if you setting partial furnished/unfurnished - you may have tenants who is looking for fully furnished.

2) if you buy all the furniture & fittings and decided to rent as fully furnished - you may have tenants only wanted partial furnished.

I always advice my clients to setting two rentals, space for tenants to negotiate as well as landlords won't lost too much to cover the bills (quit rent/assessment tax) or management fees.

In your tenancy agreement should have a clause:
2. THE TENANT HEREBY COVENANTS WITH THE LANDLORD as follows:
(a) To pay the reserved rent on the days and in the manner aforesaid.

(b) To pay before the execution of this Agreement a deposit of Ringgit Malaysia
Forty Five Thousand (RM 45,000.00) only (“the Security Deposit”) to be
refunded to the Tenant upon the expiry of this Tenancy subject to the right of the
Landlord to set off the same or deduct therefrom all sums of money to the
Landlord due hereunder or requisite to remedy any breach or default on the part
of the Tenant and a further deposit of the sum of Ringgit Malaysia Fifteen
Thousand (RM15,000.00) only (“the Utilities Deposit”) to cover any liability for
all outgoings unpaid at the time of termination of this Tenancy for any reason.
The Security Deposit shall not without the previous consent of the Landlord in
writing be deemed to be or treated as payment of the monthly rental for the
Demised Premises.

(c) To pay and discharge all existing and future charges for the supply of water,
electricity, telephone and other utility services and for conservancy payable in
respect of the Demised Premises during the term of this Tenancy hereby created
and for this purpose, the Landlord may utilize the Utilities Deposit to set off the
same or deduct there from all sums of money due to the Landlord hereunder or
requisite to remedy any breach or default on the part of the Tenant with any
balance outstanding to be refunded to the Tenant as soon as practicable upon

the expiry of this Tenancy. The Utilities Deposit shall not without the previous
consent of the Landlord be deemed to be or treated as payment of the monthly
rental for the Demised Premises.

(d) Not to make or permit to be made any alterations, renovations or additions in the construction or arrangement of the Demised Premises nor to alter the facade of the Demised Premises, nor to erect build or suffer to be erected or built any
additional structure or building whatever without the previous consent in writing of the Landlord and in furtherance, to submit all design, layout and renovation plans to the Landlord for approval before commencing any works whatsoever.


(e) To keep and maintain the Demised Premises and all parts thereof (whether altered, renovated or otherwise pursuant to Clause 2(d) above or kept in its original state) including all doors, windows, glass, shutters, locks and fastenings and other fixtures and additions thereto in a tenantable state of repair and conditions throughout the term of this Tenancy and whenever the Dewan Bandaraya Kuala Lumpur requires it be done, to paint such part of the Demised Premises as shall be required by it to the extent and in the manner stipulated by it failing which the Landlord may but shall not be obliged to do so carry out the requirement of the Dewan Bandaraya Kuala Lumpur and the cost thereof shall be a debt due by the Tenant to the Landlord and the provisions of Clause 2(b) hereof shall apply.

Not to do or permit to be done upon the Demised Premises anything which may
be or become a nuisance or annoyance to or in any way interfere with the quiet
and comfort of the occupants of adjoining buildings and not to use the same for
any illegal or immoral purpose provided that if the Tenant carries on business
within the terms of its license from the relevant authorities and the noise level is
within the level normally associated with such business it shall not per se
constitute a breach of this clause but, without limitation to the rest of this
Agreement, the provisions of Clause 2(m) below shall apply.

(j) The Tenant shall take effective steps and precautionary measures to prevent any fighting, disorderly behaviour, misconduct or any activity of any indecent or
immoral nature or any activity which causes disrepute or which in the opinion of
the Landlord is undesirable or unsuitable. In the event there is any fighting,
disorderly behaviour, misconduct or any activity of any indecent or immoral
nature or any activity which causes disrepute or which in the opinion of the
Landlord is undesirable or unsuitable whether by the Tenant or its servant or
agents, customers, invitees or licensees in the Demised Premises, the provisions
of Clause 2(m) below shall apply (without limitation to the rest of this Agreement).

(k) The Tenant is strictly not to assign, sub-lease, sub-let and/or license the use of
the Demised Premises to any other party(ies).

(l) Not to do or permit to be done anything whereby any insurance on the Demised Premises against damage by fire may become void or voidable whereby the rates of premium may be increased and to repay to the Landlord all sums paid by way of increased premium and all expenses incurred by the Landlord in or about any renewal of such policy or policies of insurance rendered necessary by a
breach of this covenant.

(m) At all times to be responsible for and indemnify and keep the Landlord fully indemnified against all damages, losses, costs, expenses, actions, demands, proceedings, charges, claims, liabilities and/or prosecution whatsoever and howsoever made against or suffered or incurred or instituted against or by the Landlord arising directly or indirectly out of any breach or non-observance by the Tenant of any of the covenants or other provisions of this Tenancy or any matters to which this demise is subject for which the Tenant is liable, by any person or authority arising therefrom.

(n) To insure and keep insured the Demised Premises against public liability (with
the Landlord named as the beneficiary),loss or damage by fire (including caused
by electricity or lightning),flood, storm or tempest and to pay all premium for the
purpose.

(o) Upon the termination of this Tenancy, to peaceably and quietly deliver up to the Landlord vacant possession of the Demised Premises in its original condition (or, subject to Clause 2(p) below, in the same tenantable/habitable condition
subsisting after alteration, renovation or other works carried out pursuant to
Clause 2(d) above) save and except if otherwise agreed by the Landlord.
hope the above clauses example is helpful to you.
 
L

luckikong

New Member
Rent it out...

Absolutely, rent it out. You leave it empty it will worth nothing. But you rent it out, you can prove its worth and others good impression of this house. So when the time gone by, your house will worth more and more money. You know?
 
S

stteck

New Member
luckikong said:
Absolutely, rent it out. You leave it empty it will worth nothing. But you rent it out, you can prove its worth and others good impression of this house. So when the time gone by, your house will worth more and more money. You know?
I do agree. As a small investor, we would hold a house for 3 to 5 years for whatever reason (bank loan lock in period, RPGT) under normal circumstances. renting it out can help to reduce bank loan burden.
 
D

DustinYeoh

New Member
Maximize whatever space you have by renting out.... it at least helps to take away the burden by a bit
 
A

Alex0

Banned
Guys am also want to buy a new house with tow bedroom if anyone here want to sale than contact here back i will appreciated .....
 
F

fuzzy

New Member
Personally - I'd rent it out - bare if possible.

For one thing, there'd be less chances of damage (less items - less damage).

Also, if you going to buying new furniture just to rent it out (you might be taking the old ones to your new place),then its just a lump of cash out of your pocket, only to be recovered thru a minor increase in rental over a period of a year. Or even possible two (built-in wardrobes do cost after all).

On the assumption that you're renting it bare, there's little chance of heavy damage (or rare case at least). Paintworks and what not minor damages can generally be recovered from the security deposits.

Just my 2 cents though.
 
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