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Tips on becoming a residential landlord for the first time
There are many ways to invest in Hong Kong. Many residents work with accredited financial advisors who provide them with advice for diversifying their portfolios through a range of investment products. But for some people, the best investment is in property.
Buy-to-let properties are common in Hong Kong as, for many people, investing in traditional bricks and mortar is a relatively low-risk way of preparing for future retirement. In general, property prices in the city have risen year on year for decades.
In January this year, it was reported that Hong Kong house prices rose for the 13th consecutive year in 20211. For those who are in a position to buy, getting on the property ladder is seen as a good investment for the future. Not only can you create an income stream from monthly rental payments, but the property could also potentially be worth more than you paid for it if you decide to sell.
In this article, we’re going to look at some of the things you should consider if you are renting out your property for the first time. Here are some of things to bear in mind.
Choose your tenants carefully
In a city as busy as Hong Kong, finding someone to rent your apartment is likely to be a quick process. However, make sure you choose the right person by carrying out due diligence. Ask for proof of employment, such as a work contract, and ask to see bank statements showing their monthly salary. The last thing you want is to sign up a tenant who can’t pay their rent only a month or two into the contract!
Another good idea is to ask for a reference from your tenant’s previous landlord. That way, any potential issues can be identified before you sign the contract with the tenant.
Furnished or not?
This is mainly an issue of cost. If you furnish your apartment, you can command a higher rental fee. However, bear in mind that over time, furniture and other goods will need to be replaced – whether through fair use or damage caused by the tenant. If you leave your apartment unfurnished, your monthly rental may be lower, but you will probably have fewer obligations regarding repairs.
If you have a smaller property in the city, you will probably be targeting single professionals or couples without children. In this case, a furnished flat may be more desirable to them as they can arrive “with their suitcases” and settle in immediately. On the other hand, if you have a larger property, it may be more attractive to families. In this case, they are likely to own their own furniture already.
Get insured
As a landlord, you should select an insurance product that will protect you and your investment against financial loss. Unfortunately, circumstances do occur where tenants cannot pay rent, or they cause damage to the property. In this case, you should ensure you are covered so you aren’t bearing the financial burden of someone else’s mistakes.
When selecting an insurance product designed specifically for landlords, look for one that protects you against loss of rent, fixtures and fittings, and repairs. You should also consider insurance that offers household improvements cover. This comes in useful if you need to make upgrades to your property, such as replacing window glass or repainting internal walls that have become marked over time. Your chosen plan should also include owner’s liability protection. That way, you can have peace of mind your rental property investment is in safe hands.
If you have any queries regarding Landlord Protector insurance, please feel free to contact us 
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Read more: Landlord insurance protects property owners against delinquent tenants and legal liability
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