In the Malaysian furnishing market, it’s very common to see overpriced and under-qualified suppliers pouncing on inexperienced property buyers, charging upwards of 50% more than fair value – it brings the question to mind, “How to Avoid Overpaying for Furnishing and Renovation?”
With an increasing number of developments offering attractive rebates anywhere from 7% – 15%, the barriers to purchasing property has been lowered greatly, allowing many previously inexperienced people to become property owners.
The furnishing cost upon receiving the unit, however, often comes as an unpleasant surprise.
This lack of knowledge and not having the right contacts result in many property investors paying way too much for furnishing. Here’s how to be as smart and cost-efficient about it as you can.
What is Your Intention for the Property?
First, you should decide whether the property is for investment, or if you would be staying there yourself. The reason for this is simple: if you plan to move into the place, then you should not have to set a low spending limit to furnishing the property, that is, if you can afford it.
After all, you and your family will be spending years of your lives in the place. If, however, the property is for investment purposes, then you should be as cost-efficient as you can to maximise the yield, or return-on-investment (ROI).
If you intend to rent the property out for long-term tenancy, fully furnishing the unit would be the recommended option.
Compared to renting out a bare or semi-furnished unit, the rental yield would be better, and more efficient in the long run.
Keep in mind though, that fully furnishing a unit for long-term tenancy shouldn’t cost too much, as the priority here is functionality.
To give you an idea, fully furnishing a 2-bedroom, 2-bathroom apartment with existing aircond and water heater units (very common nowadays) should not cost more than RM25,000.
This should include everything from electrical fixtures to decorative items to increase the appeal to potential tenants.
If you do it yourself, with the right suppliers and decisions, you can even get it done for RM20,000 – RM25,000. Do not get persuaded by contractors to install unnecessary, expensive fixtures and high-quality furniture.
Doing this will only minimise your ROI, and very often, long-term tenants will damage them anyway.
If you intend to manage or have the property managed as a short-term rental (eg Airbnb) listing, the furnishing cost increases.
The reason for this is because you would need to purchase slightly higher quality fixtures and furniture to appeal to potential guests.
Additionally, you would need to make your property “Airbnb-Ready”, which means topping it up with items and amenities such as linen sets, a drinking water filter, crockery, cutlery and consumables like soap and shampoo.
Furnishing a 2-bedroom, 2-bathroom unit to be “Airbnb-Ready” should not cost you more than RM40,000, all in.
Doing this yourself can be a little tricky, as many people tend to go overboard on the furnishing and décor, thinking the more they spend, the higher they can charge guests to stay there.
The truth is, guests look for 2 main things: high occupancy (the number of people you can accommodate) and practicality (things like WiFi, a cooking stove and a washing machine).
Done right, you can keep costs low, and still beat the long-term tenancy market rate for your property.
Questions to Ask Your Interior Designer/Contractor
Since most people have full-time jobs and families, hiring a professional to furnish your property would be the best choice.
If you find the right company, they can not only save you money through their resources, they can get the job done in 3 weeks to 1 month.
Here are some questions to help you determine if you have chosen a good company.
- Do you have a portfolio?
Any good company would have a portfolio of furnishing projects, which they would gladly show you. If they do not, be careful – they could be inexperienced and result in you spending more than you should.
- How long will the job take?
Typically, a good ID company can get the job done in a month or less – assuming it isn’t the holiday season. If the estimated timeline is 2 months, or unspecified, that’s a red flag.
- Do you have a registered company?
A professional ID company would have a registered company and business premise they use to conduct their business. If in doubt, request to visit their office, or do a background check on SSM on the legitimacy of the company.
- What are the payment terms?
A furnishing project would typically require a down payment of 50%-60% upon confirmation, and the remainder upon completion. Do not make the balance payment before inspection the finished job.
- Do you charge for conceptualisation/planning?
This is a trick many companies use to increase their profits. As it is, the furnishing project itself should already include their profit margin, without including planning and conceptualisation, which some companies charge by the square footage. Unless it’s an intricate and complex project, there should not be any such charges.
- What is NOT covered in your quotation?
The quotation given should, by right, include everything from disposal of the debris and packaging to a post-renovation clean-up. You wouldn’t want to be unpleasantly surprised by unexpected costs from the company halfway through the job.
- Can I use my existing furniture from another place?
A good ID company can work around existing furniture and fittings you would already have, perhaps from another home, or extras you have lying around. Unless they are in bad condition, the company should not refuse having you bring your items over.Remember – if you feel uncomfortable at any point, you always have the option of going with another company. Do not be pressured or afraid to say no. Do not be afraid to ask questions like the material of the sofa, the thickness of the mattresses and the level of sunlight the curtains keep out.
Tips for Furnishing the Property Yourself
If you have the time and an interest in design, then taking the job on yourself can not only be an invaluable learning experience, it can also save you a lot of money.
Where, however, would you start? Getting suppliers off Google and looking for second-hand furniture on Mudah may get the ball rolling for you, but this will most certainly delay the entire project by a lot, and, as a result, delay your investment yield.
Here are some tips to get you started.
- List down the suppliers you need
Typically, you will need professionals for your curtains, wallpaper/painting, kitchen cabinets and installation of electrical fixtures and appliances. Even if you have experience doing repair works at home, installing these yourself would not only stretch your timeline, it can be dangerous.
- Ikea can be friend
Even among interior designers, there are a lot of items at Ikea that are affordable and are of decent quality. The trick is to not be pulled into buying unnecessary items, and to stay away from the expensive ones.
- Shop online
Online shopping platforms like Lazada, Shoppee and Taobao often connect you direct to furniture suppliers and cheap offshore items. Always go for the highly-rated items, and don’t be pulled into buying sub-par quality items. Remember – if it’s too cheap to be true, very often it is.
- Buy what you can yourself, and have it installed
Items like lighting fixtures, ceiling fans and wall décor, if purchased yourself, can save you money, as contractors often have a mark-up on the price of the items themselves, on top of the installation charges. Be careful though, you want to make sure you get the items with the correct specifications, like the diameter size of the lights, for example.
For investors, there’s no better feeling than seeing your investment gain you yield while it appreciates in value.
Don’t be afraid to ask your friends and family if they have experience in the field, or have any trustworthy contacts for interior designers, contractors or suppliers you can utilise.
For those who prefer to leave all the work to the professionals, you can always get in touch with us for the best value furnishing packages for property investors!