Real Estate Matters | The most important questions to ask… when you are a landlord renting out a property
Juliet Risdon
If you have not seen the earlier articles on this subject, here is a brief introduction to the series. Of course you can find the articles online on the Macau Daily Times website.
Renting out a property can be both stressful and risky, especially if you are unfortunate enough to encounter a bad tenant.
The trouble is, even though you own the property you are also very busy during the day and want to minimize the issues with this and any other apartment.
If you are looking for an Agency to lease out your property and a Property Administrator to take care of it whilst it rented, it is important to do your homework and look for an established and professional company with strong systems.
The list below is in no particular order, and is intended as a starting point to help identify which questions to ask. This week we look at questions 11-15.
What tax should I pay ?
There are two types of tax to pay in Macau.
Land Tax is the standard yearly tax on the land upon which the property is built. This tax is shared by all owners of the properties that stand on that land, and tends to be relatively inexpensive.
Property tax is the other type of tax, and this itself takes on two forms; It is charged when you are a resident of the property, and is calculated by the government according to the size and type of the property.
However, if the property is rented, the property tax reverts to a straightforward 10 percent tax on the rental income.
Who will liaise with the tenant?
This depends on whether you have a Property Administration or Property Management company to look after your property for you.
If you have engaged a company, they will handle all liaison with the tenant. If not, the tenant will usually contact the owner directly.
In some cases the tenant will contact the agent who must then contact the owner.
However, whilst this seems to be convenient for the owner, it often means that the owner ends up spending more money than necessary as the agent fails to understand the nature of the problem, and cuts corners to solve it in the quickest way possible instead of protecting the owners interests.
Who will look after the apartment?
The starting point for who takes care of what is reasonably clear under Macau Law.
The tenant is responsible for returning the apartment in the same condition in which the apartment was handed over with some fair allowance for wear and tear.
The landlord’s task is to look take responsibility for the infrastructure such as plumbing, walls, electrical systems and so forth.
As part of the initial negotiation it is a good idea to make this as clear as possible amongst both parties to avoid arguments and conflicts further into the contract.
Who will check the tenant’s background?
Tenants backgrounds should always be checked.
In some cases the agent conducts a background check. However, you should be wary if the agent is representing the tenant. This kind of mistake happens all the time in Macau, an owner thinks he is saving money by not paying an agency fee.
In reality, he now has no-one looking after his interests, and the downside of this mistake is a huge cost to the owner either through lost revenue or delinquent payments from tenants.
Can the tenant provide references?
Tenants should always provide references, and in extreme cases tenants may be asked to provide a guarantor as well.
Whilst there is no such thing as a bad reference (any reference that was unfavorable would not be shown by the tenant), a reference gives the tenant something to live up to, and if you are unable to obtain a reference from previous landlords this would also be a red flag of course.
Juliet Risdon is a Director of JML Property and a property investor.
Having been established in 1994, JML Property offers investment property & homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.
www.JMLProperty.com
info@JMLProperty.com
