Dear Reuel: Should I Compromise On My Asking Rent?

Dear Reuel, 

I have been putting my 3 bedroom condo unit for rent at an asking price of $3,000. I’m willing to negotiate to $2,800 since it was last rented out at $2,800. That’s reasonable right? I have an offer of $2,500 and the tenant can move in by end of the month.

I was told by my agent to consider the offer since the recent transaction is hovering between the $2,300 to $2,600 range due to the weakened rental market. That’s so low! Do you think I should compromise on my asking rent?

– Reasonable Landlord


Hi Reasonable Landlord,

So you have an offer of $2,500 and the tenant can move in at the end of the month.. What are you waiting for?! Take the offer already!

While the property market is beginning to pick up as supply of new launch properties diminishes, the takeup rate in the rental market is slower in response. According to a Singapore Business Review article, private residential vacancy rate stands at 30,100 at the end of Q3 2017.

The root cause is due to the fact that there just aren’t enough Foreign talents coming to S’pore to work. And it isn’t because Singapore is undesirable. Rather, the reason why we are in a pickle is because of us – our dear fellow netizens who complained about having too much Foreign talents in S’pore. Our dear PAP-run Government responded in kind by granting lesser work visas.

Simple economics of supply and demand has it that when demand is not able to meet the supply, prices slide and vice versa. I hope you weren’t one of the netizens because you would have literally sabo yourself. #ownselfsaboownself

Here’s a true story. I had a landlord who wanted to rent a 3 bedroom condo unit in East. The condo is an older condo and requires a ten minutes walk from Tanah Merah MRT. Landlord has previously enjoyed past rentals of around $3,000/month and was determined to keep it that way.

She asked me to assist to rent her property out at $3,000. I explained to her it was difficult since the recent rentals was around $2,600 but advertised at $3,000. After three months of marketing and arranging viewings, I managed to get her an offer from a local tenant family of three, at $2,800.

Guess what? She refused! She insisted that the tenant increase the offer by $50 to make it $2,850. The tenant was unwilling to do so and the deal fell through. And it took another four months before she rented her unit out to a tenant at.. drumroll please$2,500. *Shakes head*

The opportunity cost was more than seven months loss of rental income. While this is one of the more extreme (true) cases, it can happen to you if you are asking for sky-high prices for your property.

If your property agent convinced you to buy a new property promising high rental returns, chase him or her to rent it out at the promised rental yield. 

Your priority is to make sure your unit isn’t vacant, or at least not for too long. Get your unit occupied so you still get rental income coming into to help you shoulder the monthly installments. While you may feel butt-hurt that you couldn’t rent out at the price you wanted, remember – it’s better than having it vacant for months.

But good news, the rental market WILL recover. I quote TODAY Online’s 5 December 2017 article, “Raising the intake of working-age foreigners will help shore up growth and fiscal revenue, and reduce the tax burden on younger Singaporeans”.

It’s only a matter of time before the Government open the floodgates to bring in more foreigners. Soldier on fellow landlords! RW

 

Editor’s note: Every week, Reuelwrites dishes out uncensored, practical advice to friends, family members or strangers regarding real estate. Got a question for Reuelwrites? Email it to eugenetayhy@gmail.com.

Consultation: There is no one-advice-fits-all solution. For more in-depth advice, contact Reuelwrites at eugenetayhy@gmail.com or call +65 9833-6450.

Disclaimer: While the author Reuelwrites is a certified real estate agent with Huttons Asia, the above thoughts represents his own and is in no way representative to that of Huttons Asia.

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Condo Review – Kingsford Waterbay (D19)

Located along the Sungei Serangoon River and Park Connector, Kingsford Waterbay is Hong Kong-based Kingsford Development’s second project in Singapore. The massive development has sold more than 600 units so far.

Details

KWB

Pros

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Without a doubt, the price is easily the most attractive element about this project. With the 2 and 3 bedders going below $1 million, and their 4 bedders well below the $1.2 million range (average $1.1k to $1.2k psf), the barrier of entry to acquire a private property for homestay is very low. It’s competitive pricing also means exiting (selling) won’t be difficult. Avid joggers will rejoice since the massive project is located along the Punggol Park Connector. The project also contains a childcare centre and six retail space. Not really a ‘shopping mall’ but hey, it’s better than nothing.

Another of the projects main selling point is in the project surrounded by water. On the benefits of staying near water, read this article Science Explains How Staying Near Water Can Change Our Brains. I would prefer the units facing the Sungei Serangoon River since there is potential for the government to improve it further with its Active, Beautiful, Clean (ABC) Waters Programme. Kingsford Waterbay is also a peculiar development where the pool facing units (which are usually the premium priced units) is also the west-facing units. Value buyers who love pool-facing and don’t mind a little sun will be delighted.

Cons

Kingsford Waterbay isn’t exactly near Hougang MRT (3 bus stops), so buyers who are looking for a home within walking distance to MRT will be disappointed. But hey, there is 2 years free shuttle service and the units are priced from $1.1k-$1.2k psf, it’s safe to say that the gains outweigh the losses – unless you die-die want a condo near MRT to which you also have to pay a premium price.

Kingsford-Waterbay-Plan

Kingsford Waterbay is Hong Kong-based Kingsford Development’s second project in Singapore. So they have a lot to prove if they want to compete with the big boys for buyers. The first project is Kingsford Hillview Peak in Hillview Rise, which almost sold out except for the last handful of penthouse units. The development has some minor defects (as with most new developments) but the developer has – and I quote – “been helpful and willing” to resolve the issues.

Another concern for potential buyers are probably the number of units in the development. Kingsford Waterbay has 1,165 units altogether. More units may result in higher competition for tenants or for sale when MOP day comes, so buyers buying a unit here purely for investment might be disappointed. At the same time, if we take a look at Kingsford Waterbay’s most identical competitor The Minton, 1,145-unit development which completed in 2014 transacted 34 sales and 202 rentals in just year 2016 alone (source: The Edge Property). So maybe, the concern of oversupply and competition is unwarranted.

The Verdict

Overall, I think Kingsford Waterbay is a safe and good buy simply because of its very attractive pricing. This project will be good for buyers looking to upgrade. I’m not exactly sold on the idea of it being a investment development but only time will tell, and maybe with the government’s intervention, first movers will be rewarded after all. RW

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Share this article with your friends! The above review represents the writer’s honest opinion on the project and does not reflect the sentiments of any real estate agency or developer. Want to buy and need more info? You can reach me at 9-833-6450 or eugenetayhy@gmail.com. The author is a licensed real estate salesperson with Propnex.

Condo Review – Artra at Redhill (D03)

Touted as the place that’s right next to the city without the hustle and bustle, Redhill has been the subject of interest with the addition of the new condo by FEC Skyline Pte Ltd (a subsidiary of Tang Group of Companies) amongst other completed and soon-to-complete developments.

Here’s what Reuelwrites have to say about Artra.

Details

Artra

Pros

Without a doubt, Artra’s best asset is in its location. Located right beside Redhill MRT, residents and tenants need not fear about the elements. Since moving in to a condo in Kovan that is situated right beside a MRT, I cannot even imagine having to walk more than 3 minutes to get to an MRT anymore. Besides that, Redhill MRT isn’t some ulu MRT station in the outskirts of Singapore. So location alone, Artra is a winner.
pool evening view -e

Besides that, Artra is the only mixed development in the area with 16 retail shops, a childcare centre and Fairprice Finest. Plus, if you stay high enough (tentatively*** above 29th floor and facing south), you can actually enjoy sea view! There is also a sky garden on the 44th floor for all to enjoy the breathtaking views of the city and the sea.

But most importantly, the major concern for all homeowners and investors is to enter at the right entry price. Based on insider info, we are hearing that the lower floor units will (highly likely) start from $1.53k psf (and might be even lower) while the higher floors will start from $1.63k psf. Comparing this with prices of the nearby new launches and even the new developments in Queenstown MRT, we have a clear winner.

Cons

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One of the main complaints of Artra is the potential oversupply of condominium developments in the vicinity. Numerous condos have been built in the recent decade to the likes of The Metropolitan (TOP 2009), Ascentia Sky (2014), Echelon (2016), The Crest (TOP 2018), Alex Residences (TOP 2018), Principal Garden (TOP 2019). Oversupply? Only time will tell. But the fact that Artra’s location is the best (closest to MRT) and price is very competitive makes this a non-issue for investors and potential home owners.

The other main complaint is ironically related to Artra’s greatest strength. The development is located right beside an above-ground Redhill MRT which also means there will be MRT track noise. Fortunately, it is located next to the station and not the tracks in-between, noise level should be kept to a minimum since the MRT trains would have slowed down on approaching the MRT station. Of course there is the “Please mind the gap” announcement everytime (Laughs).

The Verdict

In short, just for the location and price alone, I don’t see why this project doesn’t sell well on the launch day (expected to be in end April 2017). There will most likely be balloting for the units (only 400 in total) on the first day as observed at other new launches this year especially since the psf is so low. Only the fastest buyers will get their choice units so do contact a real estate consultant and register your interest as soon as possible. RW

This space will be updated once developer disseminates more information. 

Like what you see?

Share this article with your friends! The above review represents the writer’s honest opinion on the project and does not reflect the sentiments of any real estate agency or developer. Want to buy and need more info? You can reach me at 9-833-6450 or eugenetayhy@gmail.com. Disclaimer: The author is a licensed real estate salesperson with Propnex.