GIVEN that we live on a tiny island, and rely heavily on foreign workers, you’d think renting out a property is easy. Well you’d be wrong. Singapore’s rental market, particularly for high-end properties, have been declining despite the influx of foreigners. Now, landlords will have to engage in vicious, no-holds-barred fights over tenants, and at least a handful will be offloading their property in shameful defeat. There are some ways to make sure you’re not one of them:
1. Make imitation furniture
If you are renting out a furnished unit, there are ways to make it seem like a higher rent is justified. The hard way is to invest way too much money, by buying designer furniture and Persian rugs. Have you seen Eames chairs? They look really cool, can go for upward of $5,000 a piece, and constitute an investment that you will recoup when the sun burns out.
But you’ve seen people with top end furniture, who claim they only spent $30,000* on everything right? That’s because it’s not always stated, but interior designers and contractors can make their own furniture. That includes when you point at something in a magazine, and tell them to “make something that looks like that, but at 1/10th of the price, thanks“.
Alternatively, go to custom made furniture websites and get them to create designs inspired from elsewhere. You don’t actually need to buy the high-end furnishings.
2. Fight for two year leases, avoid the shorter ones
Pop quiz: When the rental market is soft, do the number of rental contracts signed go up or down?
Answer: Up, which you answered because you know it’s a trick question so the answer will be counter-intuitive. But yes, rental volumes have gone up, even as rental rates have gone down. That’s because some tenants (especially those with cunning agents to represent them) often push for shorter leases in a weak rental market. That way, in six months or nine months or a year, they can attempt to renegotiate with you and get lower rates (they are betting that rental rates are likely to be just as depressed, or even worse, in that time).
So rather than just be grateful for any tenant, and just jump on a short-term contract, at least try to negotiate for a longer lease. Make your rental income consistent and fixed in a declining market.
3. Empty space? Store things for a fee
Singaporeans buy a lot of stuff, and we’re all running out of space. A less known, unofficial perk of rental properties is that they’re also giant cupboards (If you’ve had a landlord, you’ll know many of us like to keep spare stuff in our other properties). A landlord can monetise this function.
Find someone who needs space to store something, and who would otherwise need to pay a storage company (like a warehouse) for it. Writers with 1,000 copies of self-published manuscripts, blogshop owners who need inventory space, musicians who need a place to stash the old drum kit, etc. Get them to sign a contract that absolves you responsibility should their stuff burn down (improbable), and then charge them to store their items.
It may just come to a few hundred dollars a month (don’t store so much it actually affects a prospective tenant), but take what you can get in this economy.
4. Learn to stage your place for viewings
If you’ve skipped using a property agent, you’ll have to stage the property yourself. You can create significant improvements just by making some basic changes. Some of the tips given to me by property agents include:
– Repaint, preferably using white. You can get the paint company (like Dulux) to do this for you these days, and you’ll get a professional team.
– Shut off the downlights during the viewing, and use uplights. Downlights are the regular lights that shine down from the ceiling. Uplights point up at the ceiling. Examples are these floor lamps that can be pointed at the ceiling, or track lighting angled upward (like the sort used for pictures in art galleries).
You know how rooms in design magazines look nicer than they do in real life? That’s because they’re using uplights.
– Hang big mirrors on the walls, which will bounce the light around. This makes your place look more spacious, and also brighter.
– Scent the room, with a generous number of aromatherapy candles (or at least air fresheners). Do this especially for older units, which may be musty in areas.
– Remove any sagging cabinets in the kitchen, or storage units with missing knobs. Also replace old faucets or mouldy mirrors. While these are actually trivial issues, they make an inordinate impact on the tenant’s perspective.
5. Cherry pick extras to nab tenants
If the tenant is hesitating on the price, ask them what they’d want if the budget was no concern. They might mention things like more space for their children. You can then offer small extras that are tangentially related (e.g. I don’t have a backyard, but I will do up one room as a play space with some toys at no charge to you). Cherry pick the “extras” that you are willing to do for free (they should be things that don’t actually cost much).
Sometimes, the little extra gesture will be all you need to secure the tenant.
6. Partially furnished is cost-effective
In general, unfurnished properties are harder to rent out (and obviously bring in less rental income). One way to save on costs, while still attracting tenants, is to partially furnish your unit. That means putting in only essentials like the tables, beds, chairs, and so on. But leave out other amenities like the feature walls, kitchen island, or television (especially leave out the television; few people need it anymore thanks to Netflix). This will help you save on costs.
Next, try and rent it out to a family first. They will usually buy their own stuff to round out the apartment, and when they leave you can offer to buy their stuff off them at a discount (thus saving money again).
Above all, keep the unit tenanted
In a worst case scenario, you may not be able to get the rental rate you want. Bear in mind that in desperate straits, low rent is better than no rent. They key is to avoid having to offload your property, in the current weak market.
Featured image by Natassya Siregar.
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Resource :http://themiddleground.sg/2016/11/07/rental-hacks-frustrated-landlord/
