What is Zero Deposit?
The concept of Zero Deposit solution has been around for a while, not just in Malaysia, but all around the world. However, it has only recently started to become widely available and used by many landlords and property letting agents.
Since 2020, iBilik will be partnering with BlueDuck Malaysia to offer a Zero Deposit solution exclusively for our customers. Here we take a closer look at what this is and what it means for both landlords and tenants.
How does Zero Deposit work?
The traditional approach to deposits is to ask tenants to pay a fixed amount to cover firstly, circumstances where the individual is unable to pay the rent, or utilities, and secondly, any damages to the property. This is usually an amount equivalent to around 2 to 3 months of the rental rate. Given the current economic situation, it has become increasingly difficult for tenants to get enough funds to cover the deposit.
This is where the Zero Deposit solution becomes a life-saver for both landlords and tenants. It allows a tenant to rent a property by only paying the equivalent of the 1 week’s rental along with an advance rental for the first month. The solution covers the landlord for the 2 months’ rent deposit that they would normally have been collected to protect their interests over the term of the tenancy.
If a tenant does cause damage or is unable to pay their rent, the solution protects the landlord as if they had a traditional security deposit.
How does Zero Deposit benefit You?
Getting the funds to cover your deposit prior to renting can be a challenge, especially during the current economic situation. If you are a tenant and looking to move into a property that has a monthly rental rate of RM500, for example, even with just a 1.5 month deposit you are looking at paying RM750, plus the 1 month advance rental, a total of RM1,250 before you can move in.
If you only need to pay the initial RM127, it’s a lot easier. Tenants can then put the rest of their money towards other moving expenses such as transporting belongings or buying new things for their home, which is why many are now looking for properties to rent that comes with Zero Deposit solution.
While it’s highly beneficial for tenants, how do Landlords benefit out of the Zero Deposit solution?
Firstly, the landlords are still covered as before. This means there will still be a similar safety net, to insure them against, for example, a tenant suddenly quitting the property and leaving it empty. Many renters today prefer properties that have Zero Deposit solution. As such, having your rental property with Zero Deposit solution also means that you have access to a wider range of potential tenants. Plus, most importantly, your property gets rented out faster.
Landlords don’t have to register their deposit as they do with traditional approaches so there’s less paperwork and admin to worry about. All of these can be done at your fingertips via online offerings. The 2 months’ rent cover is still there, it’s just being underwritten by a company that is providing the Zero Deposit solution. Some packages even come with coverage for damages, and utilities payment.
Landlords are less likely to see longer vacant periods because potential tenants no longer need to save so much to pay for the deposit. If there are disputes, these will be handled by the local insurance agency BlueDuck Malaysia, underwritten by Liberty Insurance Bhd – who has 42 years of experience in Malaysia. This means that you are likely to get your money back quicker.
Blue Duck Tech Sdn Bhd (BlueDuck) is a licensed insurance agency in Malaysia transacting on Zero Deposit Insurance. Coverage is available only in Malaysia where insurance is currently being transacted, and is subject to policy terms, conditions and exclusions. BlueDuck Zero Deposit Insurance is an exclusive product and is underwritten by the Liberty Insurance Berhad. Coverage for the benefit of a landlord with respect to a tenant’s unit is subject to underwriting review and approval with respect to that tenant. Landlords are obligees under insurance placed by BlueDuck.
For more info, checkout https://www.blueduck.my/
iBilik.com is Malaysia’s Largest & No. 1 Room Rental Website for Rooms, Homestays, Short-term rentals with over 100,000 listings in Malaysia, Singapore, Indonesia, Brunei and the Philippines since 2009. We offer rentals with Zero Deposit, powered exclusively by BlueDuck Malaysia.
We provide the Zero Deposit solution exclusively to both tenants and landlords. Given the current need for social distancing, you can continue to enjoy searching and viewing your ideal room at your fingertips with virtual viewing. You can either view the property via video call with the letting agent or the landlord or video sent over via messaging app.
With iBilik’s 1-Stop Property Management Solution, as a landlord, agent or even operator, you can enjoy our range of hassle-free services from our automated listing via top room rental portals, social media marketplaces, room showing, rental collection, tenant management to even Zero Deposit insurance protection!
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For more info, checkout https://www.ibilik.my/