Rents Heading South – What Should Landlords be Doing?
If you own a residential property and have bought it for pure rental investment, you would be a little dismay reading the recent articles on Straits Times and Business Times should it be your turn in renewing or to look for new tenants.
If your tenant has signed with you just recently, don’t be amused if he comes knocking at your door to ask for rental adjustments.
Now with all the turmoils that Landlords might be facing with Tenants, given the current outgoing expatriate market, and with brand new supplies coming up, what should Landlords really do in order to sail through this period of crisis?
If it’s Tenanted..
This would be the best case scenario should your tenant’s job be secured or should the company that has signed lease with you have not door knocked your way for a discount. Congratulations.
According to some of my existing expatriate tenants, many have taken the initiative to ask for a rent adjustments due to a reduction in salary or company budget for their leases in Singapore.
It’s not an obligation but a goodwill gesture to listen to your tenant’s request as a good Landlord for a long term relationship.
Assuming your tenant has been a good occupant that hasn’t been given you any trouble for the number of months that he has paid his rental, you can consider his plea; alternatively, if he haven’t been one, you can take the chance to force him out should he default on the rental.
Again, should there be any adjustment, you can base on reducing a small percentage or base on the current market rental rates by comparing similar properties in the same development.
If it’s Unfortunately Not..
It’s a good time for you to do some renovation depending on your property’s condition. It’s a tough market out there for contractors now so you might be able to get someone to touch up your apartment at a good rate.
If you are having a new apartment which has just gotten TOP (Temporary Occupancy Permit), you can consider doing up the apartment to stand out from your competitors in the same project.
This option is not available yet as Jardine Lloyd Thompson and QBE Insurance Group is still working on the details, but this is one you can look into if you’re thinking the premium is worth the protection.
Getting a Responsible and Effective Realtor to Market
Have your regular Realtor do a good job in this down market. Listen to what advice that he/she has to offer, and award the Realtor an exclusive if they’re determined to push your unit for you.
The commission that you’re paying for will definitely be worth the money in the long run during the introductory, the settling down of your new Tenant, the duration of your Tenant’s stay and finally the handing over of the apartment back to you.