The room rental market has taken a massive hit throughout the Covid-19 pandemic, says Keek Wen Khai, CEO and co-founder of LiveIn, previously known as HostelHunting.com.
"If I were to summarise the market in one sentence, I would describe it as very challenging. Other than the pandemic, people's salaries and jobs have also been affected," says Keek.
"For LiveIn, our tenant database has been split between local tenants and foreign tenants. These foreign tenants make up 40% of our tenant base, and most of these tenants prefer to be in their own country during the season. Local tenants also prefer to be in their hometowns."
Keek explains that the pandemic has put both landlords and tenants in a bind. Some tenants are requesting a temporary reduction in the rental amount, deferment in rental payments, or opting to terminate the tenancy agreement entirely to move back to their hometown, or somewhere cheaper.
He adds that young working professionals are the ones most directly affected by the pandemic, having to move out due to budget concerns and job losses. However, the student population is less concerned about budget, and are much more affected by timing issues and uncertainties on when the colleges and universities will reopen.
"These students are still in the first or second year in their university semesters. They are nowhere near graduating, and it is very awkward for them to cancel their tenancy agreements now, especially when they don't know when the university will reopen. It is quite a dilemma," says Keek.
Despite the slowing room rental market, LiveIn has witnessed a surge in visitors to the platform during the Covid-19 period. Keek explains that this might be due to several initiatives launched by LiveIn to address the pain points faced by new and existing tenants.
One of these initiatives includes conducting virtual room tours through live videos to minimise the need for travelling. Keek also points out that the rooms on the LiveIn platform are standardised to a certain aesthetic and quality of life as part of their business model so that potential tenants have a better understanding of what to expect.
"If they go to their usual channels to search for rooms, such as through property agents or other platforms, these channels still rely on the tenants physically inspecting the room before deciding to rent, and they may be concerned about their health and safety," Keek explains.
"This is especially troublesome for tenants who have their tenancy expiring in one or two months, and they need to make a decision quickly on whether they need to renew their contracts or move to a new place. So these tenants would leverage our virtual room tour service to make an informed decision."
LiveIn is also offering new tenants the ability to rent on flexible terms. In fact, tenants are now able to rent rooms on a monthly basis at no additional cost. Keek explains that this policy helps address many scenarios that the tenants might be going through where flexibility is highly appreciated such as job transitions or changing university timetables.
For existing tenants, LiveIn has also launched the Pay What You Can (PWYC) campaign, where tenants are able to negotiate for more agreeable tenancy terms on a case-by-case basis.
"If our existing tenants are facing any financial difficulties, they are able to raise the issue with us and let us understand how much rent they are capable of paying, and we will try our best to support them," Keek explains.
"We have already more than 150 cases and have helped these tenants lower their rent. We hope that this campaign will help tenants cope with the current difficult situation. However, we will also carefully assess the tenant's capacity to fulfil the rental payments and only help those that need help, because we also do not want people to take advantage of the campaign."
Keek adds that the pandemic has not only affected tenants in general but LiveIn's daily operations as well. He explains that LiveIn regularly hosts community events for its tenants, such as yoga sessions, hiking trips and cinema outings to help new tenants socialise and transition to their new environment.
However, the pandemic has resulted in many of these events being cancelled or postponed. But Keek maintains that bringing together communities is still a priority, and they are now focusing on managing these events much more carefully.
Despite the initiatives implemented, he foresees that the Malaysian room rental market will continue to be soft in the following 12 months and that there will be new challenges for both landlords and tenants.
"After temporarily lowering the rent for several months, owners will request for the original or higher rental from existing tenants. After that, tenants may need to consider downsizing their current living standards," says Keek.
"I believe that people nowadays are not looking to buy properties, but rent smaller spaces with better living experiences. At LiveIn, we will focus on our current basket of owners and tenants, and to make sure that they are well taken care of."