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Investing in real estate can be a lucrative endeavour, but managing a property effectively requires time, expertise, and dedication. Whether you own a single rental unit or a portfolio of properties, professional property management services can streamline operations and maximise returns. This article explores the advantages of hiring a property management service and why it’s a smart investment for property owners.

A professional property management service handles the day-to-day operations of rental properties on behalf of landlords. This includes tenant screening, rent collection, maintenance coordination, legal compliance, and financial reporting. Property managers act as intermediaries between landlords and tenants, ensuring that properties are well-maintained and profitable. Professional property managers are particularly beneficial for owners who lack the time, expertise, or resources to handle property-related tasks. Their services help ensure smooth operations, tenant satisfaction, and long-term investment success. 

Property Value Enhancement

One of the primary benefits of hiring a property management service is the ability to maintain and even increase the value of your investment. Regular maintenance, timely repairs, and proactive property inspections prevent minor issues from turning into costly problems. Additionally, property managers ensure that rental units remain competitive in the market by recommending necessary upgrades and improvements. This not only attracts quality tenants but also allows property owners to command higher rental rates, ultimately increasing profitability. Well-maintained properties are also more likely to appreciate in value over time, making them excellent long-term investments.

Ensure Legal Compliance & Risk Management

Navigating the complex legal landscape of property management can be challenging. Professional property managers stay up to date with local laws, regulations, and compliance requirements. This helps landlords avoid legal pitfalls related to lease agreements, eviction procedures, security deposits, and tenant rights. By ensuring compliance with tenancy laws, property managers minimise the risk of lawsuits and penalties. They also handle legal disputes and represent landlords in case of conflicts, providing a valuable layer of protection against liability issues. Additionally, property managers ensure that lease agreements are well-structured and include necessary clauses to safeguard landlords from potential tenant-related disputes.

Stress Reduction

Managing a rental property involves various responsibilities, from addressing tenant complaints to handling maintenance emergencies. These tasks can be overwhelming, especially for landlords with multiple properties or other professional commitments. Property managers take over these duties, allowing landlords to enjoy passive income without the stress of daily property management. With a dedicated team handling tenant communication, repairs, and administrative work, landlords can focus on other business ventures or personal priorities. This significantly improves work-life balance and ensures that properties continue generating revenue without daily involvement.

Efficient Rent Collection

Timely rent collection is crucial for maintaining cash flow and ensuring profitability. Professional property managers enforce strict rent collection policies, reducing the risk of late payments or missed rent. They handle payment reminders, implement late fee policies, and take necessary legal actions in case of non-payment. With an efficient rent collection system in place, landlords experience consistent income and improved financial stability. Property managers also leverage online payment systems to simplify transactions and reduce the hassle of manual collections.

Tenant Retention

High tenant turnover can be costly for landlords, leading to vacancies, marketing expenses, and lost rental income. Property managers focus on tenant satisfaction by addressing concerns promptly, maintaining properties in excellent condition, and fostering positive landlord-tenant relationships. By providing exceptional service, property managers increase tenant retention rates. Happy tenants are more likely to renew leases, reducing the costs and efforts associated with finding new renters. Additionally, long-term tenants contribute to a stable rental income, minimising periods of vacancy and uncertainty for landlords.

Real estate investment is a long-term strategy, and having a professional property management service in place ensures sustained profitability. Property managers offer expert insights on market trends, helping investors make informed decisions about rental pricing, renovations, and property acquisitions. They also conduct thorough market analysis to ensure properties remain competitive, reducing the likelihood of extended vacancies. Furthermore, property managers streamline operations by integrating modern technology into rental management. From digital lease agreements to automated maintenance requests, these services enhance efficiency and transparency, making property ownership more manageable and rewarding.

When selecting a property management company, landlords should consider the firm’s experience, reputation, and range of services. A reliable property manager should offer comprehensive solutions, including marketing, tenant screening, maintenance coordination, and financial reporting. Property owners should also look for companies with strong communication practices. Responsive property managers ensure that tenant concerns are promptly addressed, reducing the likelihood of tenant dissatisfaction and early lease terminations. Clear and transparent communication also fosters trust between landlords and property managers, ensuring a smooth working relationship. Additionally, reviewing client testimonials and case studies can provide insight into a property management company’s track record. Experienced managers with a history of successfully handling rental properties are more likely to deliver outstanding service and optimise investment returns.

Managing rental properties efficiently requires expertise, time, and resources. At Rahim & Co, we offer top-tier property management services to help property owners maximise their investment returns without the hassle of daily operations. Our team of experienced professionals handles everything from tenant screening and rent collection to legal compliance and property maintenance. With a strong reputation in the Malaysian real estate industry, Rahim & Co ensures that your properties remain profitable, well-maintained, and compliant with all legal requirements. Contact us today to learn more about our services and let us handle the complexities of property management for you!

Stamp duty is a fee that is charged/imposed on instruments or documents of transfer. Instruments which are subject to stamp duty are those specified in the First Schedule of the Stamp Act 1949. Instruments related to a real estate transaction includes Sales and Purchase Agreement (SPA), Tenancy Agreement (TA), Memorandum of Transfer (MOT), Loan Agreement (LA) etc. In Malaysia, the imposition of stamp duty is governed by the Stamp Act 1949.

Any legal instrument that is not stamped is not permissible to be tendered as evidence in a court of law. In order to protect the interest of the parties to any agreement, it is essential to have the agreement stamped to ensure the document is legally binding.

In accordance to the Third Schedule (Section 33) of the Stamp Act,

The Stamp Act 1949 provides that:

1. Ad- Valorem Duty- The imposition of ad-valorem duty is according to value of instrument of transfer and instrument creating interest.
2. Fixed Duty – The imposition of fixed duty on legal, commercial, mercantile or capital market instruments and duplicate/subsidiary/collateral instruments.

1. Purchase of Property- levied on the document of transfer based on the money value of the consideration or market value of the property, whichever is greater.
2. Lease/Tenancy – lease or tenancy instrument which secures annual rent exceeding RM2,400 without fine or premium.

1. Sale & Purchase Agreement & Memorandum of Transfer
    

   PRICE TIER	STAMP DUTY (% OF PROPERTY PRICE)
   First RM100,000	1%
   RM100,001 – RM500,000	2%
   RM500,001 – RM1,000,000	3%
   More than RM1,000,000	4%

   Stamp Duty is based on the Budget 2019, latest revision 

   For instance, if you purchase a property that cost RM750,000, stamp duty payable will be as follows:

   First RM100,000 @1%            RM 1,000.00
   Next RM400,000 @2%           RM  8,000.00
   Last  RM250,000 @3%           RM  7,500.00
   _____________________________________________
   Total                                       RM16,500.00
   _____________________________________________

2. Tenancy Agreement
    

   DURATION OF TENANCY	AMOUNT
   1 year or less	RM1
   > 1 year to 3 years	RM2
   > 3 years	RM4

   
   Note: The first RM2,400 of annual rental is entitled for stamp duty exemption.
   
   Formula to compute ad-valorem stamp duty as follows:
   
   [(Rental rate x 12 months)- 2,400]       x    Amount based on duration of tenancy
                          250
    
3. Loan Agreement
   Stamp duty is charged at 0.5% of loan amount.

In Malaysia, the act was first introduced in 1976 under Real Property Gains Tax Act 1976 with the purpose to limit property speculation and prevent a potential bubble. RPGT is a tax levied on profits made from the sale of property. RPGT is payable by the seller of any property where a profit has been realised.

 RPGT is based on the rates that were amended and took effect on January 1, 2022.

Example scenario:

• Richard is a Malaysia citizen. Richard bought a condominium at the price of RM500,000 back in May 2018 and sold it in December 2020.
• Richard’s profit from his property disposal is RM300,000. RPGT will be imposed on his gain from the disposal.
• Richard’s RPGT charges will be RM300,000 x 30% (Charges based on number of years Richard owned the property).
• Richard’s RPGT tax is RM90,000.

According to the RPGT Act, certain tax exemptions apply to profits on selling property:

Exemption	Exemption amount	Who qualifies?
		Malaysian citizens	Permanent Residents
Once-in-a-lifetime exemption on any chargeable gain from the disposal of a private residence. The RPGT Act defines a private residence as a building or part of a building owned by an individual or occupied as a place of residence.	100% exemption on the chargeable gain.
Exemption on gains when a property is transferred within the family, either between husband and wife, parent and child, or grandparent and grandchild. Transfer between siblings is excluded.	100% exemption on the chargeable gain.
Exemption of RPGT for the disposal of residential properties from June 1st 2020 to Dec 31st 2021.	RM10,000 or 10% of the chargeable gain, whichever is higher.
Exemption of RPGT for the disposal of low cost residential homes of RM200,000 and below, in the 6th and subsequent years.	100% exemption on the chargeable gain.

It is an insurance coverage to settle the outstanding loan balance of home buyers in the event the borrower passes away or suffers from total and permanent disability prior to settling of the loan.

• Acts as a reducing term assurance life policy mainly to protect those taking a housing loan.
• A scheme where buyers are covered for the amount of loan for the period of the loan.
• In the event of an unexpected death or total permanent disability (TPD), the buyer (or next of kin) is protected and secured for the repayment of the remainder of the loan.
• The lender (usually financial institution) will be the beneficiary of the insurance payout. Family member of policy holder will not be receiving the insurance payout.

• Has a cash value at the end of policy.
• Suitable for those who need additional financial protection and policy holders who may have several financial dependents.

MRTA VS MLTA

Engaging the right real estate agent is essential for any owner to sell their property in a correct way to avoid pitfalls. Selling a house takes negotiating skills, time and good knowledge of the neighbourhood. A good Real Estate Agent is able to help the owner bridge the gap between setting the best price for your property and ensuring the sales goes through. We strongly recommend you to appoint a professional Real Estate Agent who is registered with the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEAP). Here are some tips to facilitate a quick and painless sale process: 

1. Set the Right Price
   
   Setting the realistic a reasonable price for your property is the key to a quick and timely sale. To get an accurate current value of your property, the owner can engage a property agent or appoint a valuer to research the latest prices of similar properties in the neighbourhood. Avoid setting an unreasonably high asking price for your house with the intent of negotiating it lower later, as this may be detrimental to a fast sale. By doing this, your property may be ignored by potential buyers who may come to the conclusion that gap is too wide for them to close the deal.
    
2. Spruce up your property
   
   Spruce up and improve your property to make sure that it appears clean and well maintained. This will help assure buyers that they don’t have to worry about hidden defects. You should fix any plumbing or electrical issues, leaking roofs, broken fixtures and fittings, etc. Failure to do so may risk losing potential buyers and worse still, your property may not pass the due diligence process during the handover.
    
3. Conducting the property tour
   
   Discuss with your real estate agent to find ways of carrying out the property tour/inspection. A good idea is to host an open house and be flexible about when people can view your house. The real estate agent will handle this and show potential buyers around the property and answer any questions they may have. They will also endeavour to get the potential buyer to make some form of initial offer with the goal of negotiating better terms for you.
    
4. Closing the deal 
   
   Once an agreement on the sale price has been reached, your agent would have entered the final stage of closing the sale of your property. The real estate agent will now prepare a Letter of Offer for both Vendor and Purchaser to sign. At this point, the Purchaser will be required to pay an earnest deposit to secure the deal. The Earnest Deposit usually ranges between 2% and 3% of the purchase price.
   
   At this point, legal documentation is necessary to be drawn up and signed for the house to be sold and passed on from the Vendor to Purchaser. The services of a solicitor will be necessary. It is encouraged for both the Vendor and Purchaser to appointment their own solicitors. The solicitor will prepare all the legal documents required to have the house sold, such as the Sale and Purchase Agreement (SPA) and the Memorandum of Transfer. 
   
   After the execution of the Sale & Purchase Agreement (SPA) by both parties, the Purchaser is required to pay remaining balance of 10% deposit of the purchase price. The solicitor will take over at this point and guide you through the whole legal process of transferring the property from Vendor’s name to the Purchaser’s name. This is expected to take around 3 to 6 months. The property will be considered successfully sold and ownership transferred to the Purchaser. Vendor will then be required to hand over possession of the property to the Purchaser.

1. Contact agent for unit search.
2. Sourcing and identifying suitable units for viewings.
3. Unit Viewing.
4. Confirm unit, sign Letter of Offer and pay deposit.
5. Owner and tenant signs Tenancy Agreement and send to LHDN to be stamped.
6. Payment of balance deposits.
7. Final inspection and handover of property.
8. Tenant move into property.

There are 2 kinds of rentals available in the market which is short rent (less than 3 months) and long rent (1 year or more). If you are staying in Malaysia for more than 1 year, the following types of documents will be required:

• Permanent Resident (PR)
• Malaysia My Second Home (MM2H) Programme
• A student enrolled in a course with a duration of 1 year or more
• An employee with a 1-year visa or more
• A worker from any industry with a visa of 1 year or more

If you are renting a property for long term in Malaysia, the following types of documents will be required:

• Valid Passport with 6 months to 1-year validity
• Valid visa proof, such as working permit or student visa 
• Employment letter for job holders (optional)
• Offer letter for students (optional)
• Signed tenancy agreement

1. Legal fee and Stamp duty for Tenancy Agreement. 
2. 2/3 months security deposit – Refundable upon completion of your tenancy duration, minus any repair costs due to any damages sustained during your stay.
3. Utility deposit (generally equivalent to half a month’s rental) – Refundable upon completion of your tenancy duration, deducting any overdue utility bills you have not paid.
4. 1-month’s rent payment in advance.

• Kuala Lumpur City Centre – Being the capital of Malaysia, Kuala Lumpur City Centre is surrounded by several notable development such as the Petronas Twin Towers, KL Tower, Merdeka 118 and Exchange 106. 
• Damansara Heights – Located at western side of the city centre, Damansara Heights has some of the best detached landed properties and luxury condominiums for a comfortable stay in Malaysia. Its affluent neighbourhood will no doubt meet with the standards of even the most discerning expat.
• Mont Kiara – If you are relocating to Malaysia with your family, then Mont Kiara would be one of the best places to start. Just northwest of KL, this neighbourhood has many secure residential condominiums with comprehensive facilities. Mont Kiara is also equipped with well- known international schools and restaurants with plenty of foreign cuisines.
• Bangsar – This is an established neighbourhood with quiet environment. It consists of mainly landed properties which included townhouses, terraces, semi-detached and detached houses. Bangsar is only located 15 to 20 minutes of driving distance from the city centre.
• Petaling Jaya – Located at the south of the city centre, Petaling Jaya is a satellite suburb which remains a popular choice amongst city dwellers and visitors alike. This city is popular with its abundance of shopping, amenities and incorporated with local and foreign cuisines.

Buying a property is probably the biggest investment a person will undertake in his life. As such, much care must be exercised before you contemplate a purchase decision. The buyer should first of all decide on a budget, taking into consideration what is affordable to them before embracing on an actual purchase.

There are several costs associated with the purchase of a property in Malaysia, the main ones being:

1. Earnest Deposit which can range between 2% to 3% of the purchase price which you pay when you sign the Letter of Offer.
2. Down payment on the purchase which is usually 10% of the purchase price (less the Earnest Deposit you paid) which you pay upon signing of the Sale and Purchase Agreement (SPA).
3. Balance purchase price, which is the balance 90% of the purchase price. You pay when you complete the transaction.

 Other incidental costs associated with a property purchase are:

1. Valuation fee – You may be required by your mortgage provider to undertake a valuation of your property between the loan and can be disbursed. 
2. Bank processing fee – Subject to each lending institution.
3. Stamp duty – Loan Agreement (0.5% of your loan amount).
                      – Memorandum of Transfer (MOT).
    

   Property Purchase Price (RM)	Fees (% from purchase price)	Stamp Duty
   First RM100,000	1%	RM0 - RM1,000
   RM100,001 to RM500,000	2%	RM1,001 - RM9,000
   RM500,001 to RM1,000,000	3%	RM9,001 to RM24,000
   RM1,000,001 and above	4%	From RM24,001

   
   According to Budget 2021, Malaysian government announced stamp duty exemptions for first – time homebuyers. 100% exemption will be given to both instrument of transfer and loan agreement for the purchase of a first home worth not more than RM500,000. 50% exemption will be given for home with from RM500,000 to RM1 million.
   
   The exemption will be for the Sale and Purchase Agreement between January 2021 to 31 December 2025.

4. Legal fee – On SPA and Loan Agreement
    

   Property Purchase Price (RM)	Fees (% from purchase price)	Legal Fees
   First RM500,000	1%	RM500 (Minimum) - RM5,000
   RM500,001 to RM1,000,000	0.80%	RM5,001 - RM9,000
   RM1,000,001 to RM3,000,000	0.70%	RM9,001 - RM23,000
   RM3,000,001 to RM5,000,000	0.60%	RM23,001 - RM35,000
   Exceed RM7.5 million	Negotiable (maximum 0.50%) from RM35,001

    
   Loan Legal fee – fixed 0.5% from loan amount 

Most people will require financing from a lending institution. We recommend the buyer first secure financing from the bank before embarking on the purchase.  You should check with the bank on your loan eligibility. The bank will usually require you to submit the documents such as a copy of your IC, latest EA form, CCRISS or CTOS report, recent three months’ payslip and banking transactions to check your financial situation and determine the amount of loan you will be eligible for. 

Ultimately, having that pre-approved home loan will give the buyer an idea of the price range of properties that he/she should consider. It also boosts the sellers’ confidence that the buyer has the financial resources to make a purchase.

We cannot stress on the importance of engaging a REA to help you in your purchase. Your REA will be able to guide you through the complexity of a property purchase. They will also bring to the table much local knowledge of the property market in the specific areas you are looking at which may not be commonly known in public. Moreover, the buyer will benefit from their knowledge of the area, negotiation skills and guidance throughout the home buying process.

You should discuss your requirements with your appointed REA. This would enable him to understand the needs and neighbourhood which will make it easier for you to choose a suitable property.

After the selection of a few potential properties, the real estate agent will arrange for you to view each of the properties. At the viewing, you are encouraged scrutinize each house carefully and take notes. You should also be aware of things such as structural defects, leaking roof, how busy the street is, etc. 

Once you have decided on a property, you should discuss with your REA and make an offer on the property to the seller. The seller will either accept, reject or propose a counter-offer. 

There is usually room for negotiations on both prices as well as sale terms. A counter-offer is quite a common scenario in Malaysia and your REA will have the expertise to conduct a skilful negotiation to enable both parties to have a meet of minds. During the negotiation, you would be well advised to look beyond just the price and should consider other terms of the sale which can be as important as the price. It is up to both the buyer and the seller to negotiate and agree to decide what will make them walk away feeling satisfied of the terms and conditions.

After having both reached at a final agreement on the purchase price and terms of the sale, it will bow be time to enter into the closing process of the sale. The standard procedure will be as follow:

1. Preparation of Letter of Offer by the REA
2. Sign the Letter of Offer and pay the Earnest Deposit of 2-3%. This money will usually be held by the real estate agent in their client’s account.
3. Appointment of a lawyer to draft the terms and conditions of SPA.
4. Apply for a loan and review all the offers from the banks, pick the one with the lowest interest rates, the most reasonable fees, the highest loan amount it offers and the best service. The bank may also order a valuation of for the property.
5. Sign the SPA and pay the down payment. This usually happens between 2 – 3 weeks after signing the Letter of Offer. During this time, the lawyer will proceed with the necessary documentation.
6. Sign the loan agreement and other documents. 
7. Payment of balance purchase price. At this point, the buyer’s lawyer will ensure all the remaining payments and documents are in order before the balance purchase price is transferred to the seller’s lawyer. This will usually be around 3 months later. 

The vacant property and the keys must be handed to the buyer within the timeframe stipulated in the SPA. Before accepting the keys, you should request for utility receipts that will show that all outstanding bills have been paid and fully settled.