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Last updated: 21 Jun 2000
neighbour had a better offer.
educational article for first-time landlord sponsored by AsiaHomes Internet
"You should rein in your client's additional demands" said the Owner of a Hillcourt apartment. We had a meeting with the Owner's contractor to discuss the renovation works stated in the Letter of Intent.
My client was the prospective Tenant. The Landlord had her own realtor who was not present or was told he was not needed.
What were the additional demands? The Owner said that the prospective Tenant wanted the bathroom doors to be painted the same colour as the walls of the bathroom, as agreed in the Letter of Intent and the Owner's contractor had said it would be much cheaper than varnishing.
During the meeting, the next door neighbour had told the Owner that had rented his unit for $6,000 while she had just signed the tenancy agreement for $4,000.
Now, the prospective Tenant had become demanding. I don't want to antagonise the Owner by saying more or explaining the financials as angry owners don't want to listen to the financials. It was the $2,000 difference in rent.
"How come I did not get her a higher rent?" she had asked me. I was co-broking with her realtor.
The neighbour has spent $40,000 to completely renovate the apartment with new kitchen, bathrooms, air conditioners, flooring. Here, my client was asking for repair which would cost around $15,000. The 20-year old apartment needed repair as it was tenanted for 7 years.
Let's assume a 2-year lease. The neigbour has spent $40,000 to get an extra $2,000 rent per month or $48,000 in 2 years. She spends $15,000 in repairs and replacement of a window unit air conditioner by a split unit.
Could she get $6,000 since her apartment was not in an excellent condition? It is unlikely as Hillcourt is a 20-year old apartment with only a pool and no tennis court or gym. But if she can wait, she may be lucky. I doubt it. Is she willing to spend $40,000 to renovate the whole apartment? A 3 - 6 month's vacancy is common for older apartments. Assuming 3 months' vacancy and $4,000 rent per month. That is already $12,000 rental revenue not earned.
Can she not go ahead with the tenancy agreement since she has signed it? However, the prospective Tenant had made "new demands" and therefore the offer was deemed not accepted. This issue will need to be resolved by the lawyers.
My advice to first-time Landlords. If you want more rent, renovate your older apartment 100% to match a modern one. Get all realtors in Singapore to market your property. Better if you do it yourself.
We have our emotions. We hate to earn less money. Once we have signed the tenancy agreement, why not try and be satisfied? Best of all, don't contact the prospective Tenant to say that you hope they will stay for longer than 2 years since you will have "renovated" the apartment partially. Especially, if you are the type who gets worked up knowing that your neighbour has a higher rent. Know your financials - the profit and loss statement. If you want higher rent, spend large amounts of money to modernise your apartment.
Do remember that the realtor can only bring prospects to you. You are the decision maker.
All rental realtors want higher rents too. They get paid based on one month's rent for a 2 year lease. I will prefer a $6,000 rental tenant instead of a $4,000 one, but can I find one in this case?
How to rent your condo faster? has 5 tips to help you. Good luck.
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