One-bedroom, SoHo units most difficult to rent out: Speedrent

KUALA LUMPUR: The one-bedroom small office/home office (SoHo) is the most difficult to rent and has the lowest inquiries among many residential properties, according to home rental platform Speedrent.
CEO Wong Whei Meng said buyers who intend to invest in SoHo must ensure that they are capable of sustaining and maintaining the property despite its vacancy over time.
Since Speedrent’s establishment, the company has accumulated more than 400,000 renters’ worth of search data, and only 12% of the tenant search keywords are SoHo or one-bedroom houses. This shows the difficulty of renting out such units.
“Malaysians still prefer to rent places with two to three bedrooms because this is suitable for small families. If they are single adults, they prefer to find someone to share a unit with them. Even with a rental of RM1,200 per month, SoHo is still a burden for many because our country’s average income is low.”
Investors who buy SoHo expect an average monthly rent of RM1,226 when in reality, the tenant is only willing to pay around RM1,000. The rent expectation gap between the two parties is as high as 20%.
The rental difference between homeowners and tenants in two or three bedroom high-rise residential buildings is relatively small. The average rental price is about RM1,378, and the tenant is willing to pay the rent at around RM1,200, so the rent expectation gap between rents and tenants is lesser compared to that of SoHo.
Based on the platform’s operating experience, Wong proposed the “property return 345 rule”, defining it as the unattractiveness of landed properties, high-rise buildings and SoHo properties with returns less than 3-5% to investors.
“Before deciding to purchase a property for investment, you should research and investigate the rental for similar and nearby properties. If you divide the annual rent by the house market price, you will get the gross rental yield. If the industry rent return rate does not match the 345 rule, you must further consider whether your properties are sustainable.”
He said shoppers should also pay attention to the details in SoHo advertisements as some may be simply conjecture.
“The devil is hidden in the details. The Malaysian industry has the ability to become a buyer’s market. Before buying a home, do your homework first. It’s a long-term commitment,” said Wong.