ANYONE who has owned a landed or high-rise property knows that the headache isn’t so much in finding a tenant but ensuring he or she will not affect your investment. For the tenant, it is having issues like a leaking refrigerator or uneven floor tiles dealt with quickly.
However, not all property owners are based in Malaysia, and tenants are often left to their own devices when issues crop up at the rented property. This could cause much unpleasantness and even lead to a tenant moving out, resulting in a loss of rental income. The owner has to spend time as well to find a new tenant, and fix the initial problem.
Data provided by Ho Chin Soon Research Sdn Bhd up to February 2013 reveals that there are about 65,500 residential units within Mont’Kiara, Bangsar, Damansara, Kuala Lumpur Central Business District (CBD) and Embassy Row. Of this, 30% are foreign owned, with as many as 19,650 investor-owners who are not around to manage the units on their own.
Seeing an opportunity, Daniel Yap, along with co-founder Andrew Kong and two investors, decided to set up a tenancy management company, Tenman Sdn Bhd, on May 15, 2013. Last October, they launched the 10Man website.
“Tenancy management in Southeast Asia and the rest of Asia is at its infancy stage. Therefore, there is a lot of opportunity for us to grow,” he explains.
Homeowners and tenants can sign up for a fee and access the 10Man services through its website.
One of the reasons for setting up this website, or platform as Yap describes it, was based on his own experience with his rental properties. He could not find anyone to look after his tenants. Later, he learnt that many rely on family, friends or real estate agents to take care of the unit and tenants.
How it works
For a monthly subscription fee of RM100 for untenanted units and RM250 for tenanted units, homeowners and tenants will be able to log on to 10Man’s website on their mobile devices or computers. Subscribers can register as many properties as they wish, with their history and records kept by 10Man and made available to users.
When an issue, for example, a leaking refrigerator, arises, the tenant can report it to 10Man directly or the homeowner, who will then inform 10Man via its call centre hotline or website. The report will be recorded in a log, and depending on the issue, a field agent may conduct a visual inspection.
After the report is made, the owner can expect cost estimates to be sent within 48 hours for approval, along with a photo of the issue. The owner is given a minimum of two vendors to choose from. 10Man will subsequently inform the chosen vendor, who will then resolve the issue.
After repairs are made, the field agent conducts a visual inspection and a photo of the repairs will be sent to the owner. After a job is completed, the owners can make payment from their prepaid account or by credit card.
But the owner can also reject paying for a job, Yap says. He gives the example of a situation involving a faulty air-conditioning unit, which is a wear-and-tear item. “If the owner rejects paying for the job, the buck is passed to the tenant. If the tenant clicks ‘approve’ in the website, the tenant pays for the job and the issue will be resolved.” In cases where the tenant also rejects paying for the job, then it’s up to the homeowner and tenant to work it out.
The 10Man website has been configured with a vendor rating system whereby a job is not considered completed until a rating is given. This is to enable other subscribers to make informed choices about which vendor to select based on the ratings. This is aimed at encouraging vendors to provide good service.
For issues pertaining to white goods, Yap reveals that 10Man has a standby selection of items for tenants to use while repairs are being done.
“For instance, if a tenant’s fridge breaks down, it will still take about a week to fix,” he says. “10Man will provide a replacement fridge in the interim. The replacement fridge will be free of charge, but transport will be charged as it is a third-party charge, which we do not mark up.”
Other services provided to those who sign up with 10Man include yearly inspections and annual reports on the property for the owners.
“10Man does an audit six months after tenants move in to ensure everything is working and will attach a photograph of the condition of the unit and if anything is in need of repair,” Yap says. “A happy tenant is more likely to pay rent and also stay longer, and a well-maintained property fetches better resale value, which is where we add value to the industry.”
Growing the business
Yap is looking to grow the business to cover the region. “We need to build a model that is not only sustainable and lucrative but has the kind of scale that can grow and cover as big a market as possible, not just in Malaysia but also in the region.”
Apart from a few similar web- based services, he says he has not found any other platform that mimics 10Man. Most of these, he notes, are designed for property management that take into consideration only a property’s common areas while 10Man looks after specifically the interior of units and tenant needs.
Yaps says 10Man’s business model — 50% web platform and 50% personnel on the ground — will make it stand out from the crowd. So, instead of managing 10 to 20 units, the business model enables it to work with thousands, he says.
One of the challenges in setting up 10Man in the early days was “to find a bank that is willing to give us a credit card payment gateway that could do recurring charges as we are a fee-based business, with a subscription fee charged each month”. That has been resolved after it tied up with Alliance Bank Malaysia Bhd.
The company aims to cover areas in the Klang Valley such as KLCC, Embassy Row, Mont’Kiara, Damansara Heights, Bangsar, Mid Valley and KL Sentral. It is targeting around 1,000 units in its first year of operation. Currently, it has registered 60 units.
According to Yap, the RM250 monthly subscription fee for tenanted units works out to less than 10% of the monthly rental for the units it is targeting.
“[The] price point is designed, in a way, to put up some sort of barrier to lower-end units.” He explains that the company is targeting condominium units that are rented out for over RM2,500. “Some owners are paying agents RM300 to RM400, and property managements overseas charges between 20% and 50%, so RM250 is very reasonable.”
Foreign clients, he says, are the company’s most natural clients. “We see more foreign owner subscribers simply because they are already predisposed to tenancy management in their countries and they are the ones that have the biggest need for our service. Local owners may want to do it themselves or are unwilling to pay.”
From Feb 1, 10Man extended its offerings to include à la carte services. This allows those who may not be homeowners or tenants to access 10Man services on a pay-as-you-go basis. In lieu of the RM250 fee, 10Man charges a project management fee for all repairs and fixes that it does.
Meanwhile, the company is in talks with developers, which Yap declines to reveal for the time being, to package 10Man along with products the developers will be marketing in Hong Kong and Singapore.
“The foreign purchasers will be able to enjoy packages like a three-year tenancy management free of charge. In this case, the fee will be paid by the developer,” he adds.
Apart from homeowners and tenants, 10Man also aims to assist real estate agencies. Yap says most agents manage tenants for their clients, and an agent’s income comes mainly from property sales and rentals.
“We are also currently talking to real estate agents [as] they will introduce us to their clients. It is very beneficial because 10Man [oversees] the units [they are managing], and with 10Man, the agent can keep tabs [on the tenancy]. In that sense, agents love what we are doing.”
The company has signed up with four real estate agencies — Zerin Properties, Oriental Properties, Metrohomes and MIP Properties — and many more are in the pipeline, he says.
Also in the works is a collaboration with a property-related portal whereby the portal will concentrate on leases and 10Man will take care of maintenance of the properties. Yap declined to reveal the portal as details are yet to be finalised.
The company currently has six staff, including call centre agents and field agents, and aims to expand based on need, he says.
“In future, we will have one field agent to cover an area such as Mont’Kiara and another for KLCC and so on. A field agent can cover approximately two to three sites a day as problems don’t happen every day.”
Once it hits its first milestone of 1,000 units, the company plans to launch 10Man in Johor Baru and Penang.
“Johor Baru simply because of the Iskandar region, and Penang because there are quite a lot of properties which are owned by Malaysians who may not necessarily be staying in Penang, including many rental properties as well.”
It plans to go for regional expansion once it hits 3,000 to 4,000 units, such as to Jakarta, Bangkok and Singapore. “Based on our research, we can even go all the way to Hong Kong, so there’s a lot of potential for us,” he says.
This article first appeared in City & Country, The Edge Malaysia Weekly, on February 9 - 15, 2015.