Every now and then, I get existing tenants asking this question and just recently I had a tenant who was renting one of my rooms paying a monthly rental of RM310 for a non-air conditioning room. She was willing to pay as additional RM100 each month if it was installed but I was not really willing to do so for several reasons.
Firstly, when I received this inquiry, I did mention to her that I would check with the owners on this issue and revert back to her. It is important for you to revert back to your tenant soonest possible on any issue that is brought up to you as it is part of the service that has to be done by the owner or manage r of the rooms.
Secondly, we have to look at the cost involved in this possible upgrade, buying a new air conditioning unit and installing it plus the piping required to the outside compressor would cost quite a significant amount since this is a non-windowed room situated in the centre of the house so therefore it would need quite a lot of piping just to get to the outside of the house to install the compressor. This is additional cost required vs if the room had a window that was next to the outdoor of the house.
Thirdly, would it be viable and profitable for this upgrade to be done? Yes it can be done but the situation may defer from case to case. In this particular house there is already 5 rooms out of the 10 rooms that are fitted with air conditioning units. Normally air conditioning rooms will also naturally increase the electricity bills of the house so that is also a something to consider especially when your rental includes the utilities of the house. Air conditioning rooms are also the slowest to be filled vs non air conditioning rooms. There was also a situation where the upstairs tenant which was a air conditioned room was also looking to move out so it would be possible to arrange a transfer of the existing tenant to either that particular room where the tenant is looking to move out or another air conditioning room in the house. There are of course the standard transfer fees required if the existing tenancy agreement has yet to expire. It takes extra time and effort for transfers to be done, therefore a charge is required and the tenants will not misuse this. What has happened in the past is that tenants would move in to the rooms and after a month or two, they will either start asking about either upgrading or downgrading a room and at that point in time, I did not have any experience in this situation and No charges was initiated to the tenant for the upgrade. What I notice after this upgrade was that tis news started to spread around the house and other tenants also wanted to do the same thing as it did not cost them anything to do so but it would give you a real administration nightmare. The reason for this is that you would have to pro rate what the owner has paid for in rental and also tenancy agreement fees and all the other fees vs the cost of moving in to the new room and whether they have to either top up or refund certain deposits and also you would have to have a new tenancy agreement written and you have to get involved in the moving of the tenants stuff from the old room to the new room as they would need some time to move their physical stuff. So the new room keys would have to be given to them while leaving the other room open for this process to be done. After which you would have to get this room that the tenant has just transferred from to be ready for viewing for the next potential tenant. All this really takes a lot of time and effort so a fee for this process is usually a norm that you have to make clear to your tenants. Of course, some profit will be made at the same time but that is what I call a business. I charge RM50 for every transfer done and currently I only allow upgrades and not downgrades as refunds are required on the deposits and I rather not get into that situation where it would reduce my cash flow but focus on increasing it.
Do please share with us what you feel on this issue or whether you have encountered a similar issue and how you have solved it by commenting below.