Renting Houses Online Will Cost You More, Experts Caution
An industry player has warned that while renting houses through online platforms is gaining in popularity, would-be tenants may find themselves paying extra fees if they are not cautious.
Wong Whei Meng told FMT that although more platforms are offering deposit-free packages to facilitate the rental process, they also pay deposits on behalf of tenants, classify them according to credit ratings and ask for extra interest.
Wong, who is CEO of rental platform Speedhome, said someone renting a house – through other platforms – for RM1,000 with a 3% interest rate, for example, would need to pay an extra RM30 a month or RM360 a year.
“For a deposit of RM2,500, the interest rate of RM360 is 14.4% per annum, and the interest rate is almost the same as that of a credit card,” he added.
Wong said such platforms operate in a manner similar to banks in reviewing customers’ credit ratings before deciding on interest charged.
“In other words, if a customer has a bad credit rating, he will have to pay more expensive rental fees.”
According to Bank Negara Malaysia, he said, more than half of Malaysians are unable to withdraw RM1,000 in emergency funds. He added that the rental deposit is often equal to a few months’ salary for young Malaysians.
“The lack of affordability eventually leads to them having to ask their loved ones or financial institutions for help,” he said.
“Other platforms which offer zero-deposit packages with interest do help reduce financial burdens. But these solutions are temporary, as tenants have to pay higher prices in future.
“Although they will settle your cash flow problems in the short term, your long-term financial performance will definitely be affected.”
Property expert Ernest Cheong was more critical of online platforms, saying they are not accountable to anyone, and that licensed real estate agents do not charge any form of interest.
“Licensed real estate agents cannot charge prospective tenants anything but the stamp duty and the legal fee for the tenancy agreement,” Cheong said.
“If you catch them doing that, you can report them and they can lose their licences.”
He advised prospective tenants to deal with real estate agents via the Board of Valuers, Appraisers, Estate Agents and Property Managers instead of turning to online platforms.
“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.