News: Experts Advise Against Renting Houses Online

Aug 21, 2019

Despite it being the fashionable thing to do these days, a property expert has advised against renting houses through online platforms due to its lack of accountability.

“I know it is fashionable these days to go through online platforms but who are they accountable to?” asked property expert Ernest Cheong.

In fact, an industry player has warned that renting houses online may lead to would-be tenants paying extra fees.

Read more: The Pros And Cons Of Short-Term And Long-Term Rentals

Wong Whei Meng, CEO of rental platform Speedhome, explained that while more platforms offer deposit-free packages in order to facilitate the rental process, they also pay deposits on tenants’ behalf, classify them based on credit ratings as well as ask for extra interest.

A person renting a house via other platforms for RM1,000 with three percent interest rate, for instance, would have to pay an extra amount of RM30 per month or RM360 annually, he said.

“For a deposit of RM2,500, the interest rate of RM360 is 14.4 percent per annum, and the interest rate is almost the same as that of a credit card.”

Wong told Free Malaysia Today that such platforms operate like banks in reviewing the credit ratings of customers prior to deciding on interest charged.

Read more: Renting A Property – Deposits, Recurring Costs, Tenancy Agreements And Responsibilities

“In other words, if a customer has a bad credit rating, he will have to pay more expensive rental fees.”

Hence, while zero-deposit packages with interest offered by other platforms help alleviate the financial burdens of tenants – these are merely temporary solutions since tenants would still have to pay higher prices in the future.

Instead of turning to online platforms, Cheong advised prospective tenants to transact with real estate agents through the Board of Valuers, Appraisers, Estate Agents and Property Managers.

“They have a list of all the licensed agents in any given location. If you live in Kajang, you can find one there,” he said.

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He added that licensed real estate agents are not allowed to charge prospective tenants anything except the legal fee and stamp duty for the tenancy agreement.

“If you catch them doing that, you can report them and they can lose their licences.”

 

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JIMMY NG
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Total Realty Sdn Bhd
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