CEO Series

The Answer This M'sian Startup Gives To Houses Being Too Expensive: Rent A Room For Life

  • TheKatil is a Malaysian company that provides long-term room rentals to tertiary students and young working professionals.
  • These rooms can be rented for indefinite periods, and come equipped with all the necessary fittings such as utilities, wifi, cleaning services, along with the ease of access to public transportation such as the LRT or MRT.
  • TheKatil also welcomes investors looking to get into the rental market by allowing them to invest their money, while TheKatil handles things such as renovations and all miscellaneous services.

It’s the era of hassle-free: wherever you look, people are leading lifestyles that are geared towards them being able to accomplish plenty with little effort. Co-working spaces, ride-sharing, and food delivery are all indicative of a time in which people are always looking to do things easy, and do them quick.

Fully aware of this, Alwin Aw a former university tutor and current chairman of the Malaysian Buddhist Cooperative Society, decided to leverage on the do-it-easy outlook and along with five other partners co-create TheKatil in 2016.

It’s a platform and service that offers students and working professionals long-term accommodation that they can attain easily, and one that also allows investors to get into the property rental business in a quick and direct fashion.

“My passion to become a landlord [started] when I was in university and an international student in Australia,” Alwin explained. “Rental was expensive, so I took the whole house to do subletting.”

“I started subletting 20 rooms, and it was enough that I didn’t need to pay my own rent for the long term,” he added.

Alwin then went on to become a university tutor, and then a marketing campaign manager for an IT company. But despite what he was doing, his passion remained, and he finally settled himself in Malaysian real estate investment.

“I eventually set up TheKatil to cater to the needs of property investors who need to maximize rental income for their shop lot properties, and for those who want minimal operating costs without property loans, which have been so hard to get within the past 3 years.”

Live Easy, Invest Easy

Where coworking spaces let people pay for office spaces for the long term, TheKatil applies the same concept to living spaces, offering prospective tenants rooms that are equipped with a glut of essentials including things like free Wi-Fi, essential fittings such as beds and wardrobes, free utilities (water and electricity) and cleaning services. Think of this as more like an Airbnb you can rent for however long you want.

In terms of availability, TheKatil currently manages about 300 rooms in commercially strategic locales (close to public transport and retail stores) such as Kuala Lumpur, Johor Bahru and even nearby KLIA, with about 70% to 80% of them currently occupied.

Image Credit: TheKatil

Alwin also says that compared to other providers of similar fully-furnished living spaces (like those nearby tertiary institutions and commercial zones), TheKatil is able to provide tenants the convenience of simply paying one flat price to cover everything—meaning no disputes about water, electricity, or internet bills, and services such as housekeeping are all included with the fee (which TheKatil advertises as being under RM1,000 a month).

And as for investors, Alwin also thinks that TheKatil represents a valuable opportunity for those seeking to get into the property investment market. TheKatil essentially making themselves a place where people can place their money and leave things like renovations, housekeeping, and the overall growing of the business to the management team.

Image Credit: TheKatil

“TheKatil was actually born out of the passion to cater to the ‘rental management’ space,” Alwin explained. “This is for investors who don’t want the hassle of applying for a home loan and investing in properties but want to park their extra cash into a business that can generate a better income than an FD account.”

Property & Opportunity

In terms of growth, TheKatil hopes to become the preferred asset management provider in terms of helping private developers and the government create affordable and complete rental solutions for their market. The idea is by creating these offerings, their tenants will be open to the idea of renting for life.

“The biggest obstacle has been licensing our business model, as there are no guidelines set by MPPJ or DBKL to do so,” Alwin explained. “We’re doing our best to prove to the authorities that our business model is the next best alternative to PR1MA housing, as we can complete renovations within a month to cater to the needs of between 10 to 12 working professionals.”

“Also, we can solve the problem of oversupplied shop lots that find it hard to get their middle floors tenanted.”

Alwin (far right) presenting TheKatil at the myRumah 2017 event / Image Credit: TheKatil

Alwin is also convinced that his business model has what it takes to be successful in the local market, with its 14.8 million-strong labour force providing them plenty of opportunity for growth.

“As property prices rise, and as the income levels for junior to middle level staff stagnates due to the slow economy, the younger generation will resort to renting as a cost-saving option for their lifestyle,” he said. “We think the market potential is huge.”

With that in mind, Alwin says that TheKatil team has been working quickly to leverage on this opportunity.

“Our biggest accomplishment is developing 155 rooms within a year, which has been an amazing feat among the team members,” he said.

And building on that momentum, Alwin says that his team are also actively researching ways they can work with outside parties to make such living spaces more attainable for tenants and sustainable for their investors.

“We’re consulting with developers on creating solutions for investor-friendly units so they can enjoy sustainable rental returns,” he said. “And we’re also letting investors with empty units and rooms to partner with TheKatil so we can build an ecosystem of available rooms.”

“These rooms will be along the LRT and MRT lines, catering to the needs of the ever growing mobile workforce.”

As for their tenants, TheKatil will also be introducing more services and convenience features to improve the overall experience of staying in any of their rooms. So far they’ve already introduced things like the “Rent a Transport” service that provides transportation from some of TheKatil’s rooms to a tenant’s university or workplace.

“We also want to enable our tenants to participate in our ‘zero money down’ development scheme,” he said. “This will allow them to become our tenants and also our shareholders, so they can ultimately provide us with input to better improve the experience for all TheKatil tenants.”

Feature Image Credit: TheKatil

 

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