Rental questions

[corneyAmber]

MMM:

Wanted to tap on the experience of those parents who knows how to handle this.


We've a rental property that is due in Sept this year. Contractually, the tenant was given the option to extend based on current term for another year. Just planning in case the tenant is keen to renew which I feel there is a good chance as they have stayed in another unit within the same development and our unit is one of the good units in the development and they are pretty happy so far. My questions are :

1) Do they usually negotiate for rental adjustment for extension or based on current contract? How does it work?

They would negotiate based on current market terms especially if it is lower. If higher, they may sign longer term to maintain the rate.

2) My tenant loves to go through their agent. They have been in Spore for 30 yrs and have been renting :roll: For this property, my auntie was the one who got the tenant for us. When there was aircon issue, their agent got in touch with my aunt but we were the ones who did the follow up by ourselves. I've been communicating to them to come direct to us if there are any problems. Should I send them a email asking if they intend to renew at some point?

Going through agent for them is hassle-free because they leave their agent to do all the follow up for them. Also, they may not be keen to build relationship with the landlords. If they have rented so many years, I don't think they want to deal with so many people plus they really need an agent to look for new places each time they terminate an old tenancy. No harm sending them an email to trigger the renewal process as it takes time but they will redirect to their agent again I suppose.

3) For renewal, we are trying to minimise agent fees but we need to get the paperwork done too. What is the best way to do it? Eg. for extension, what is the market rate for agent fee for paper work? It doesn't make sense for us to pay them 1 month rental. Can we potentially do this paper work ourselves?

You need to rework the tenancy agreement and get the stamp duty done.
Was their agent the one who provided you with the first copy of the tenancy agreement? If yes, then it may hard for you to shake off the agent. If no, then you can go ahead to renew the tenancy agreement on your own and do the stamp duty. If the agent wants a fee in this case, he/she should get from the tenant who has been using his/her service for this renewal.

Appreciate your advice.

[MMM]

Hi Hquek,


Thanks for your advice.

My tenant is a US couple who has been staying in Spore for the last 30 yrs. My 1st question when I met them was \"Why didn't you buy a house?\". We actually visited our unit when there was aircon issue.... They are the type who turn on aircon all the time. Dunno if 24/7. My sil stayed just opposite our unit so she told us that the windows are always closed.

They are couple in their 70's with their finance mgr staying with them as this is a company lease and they run their own business. All adults and we can see that they really do up our place. Eg. placing table runner and decors on the dining table that made me wonder how frequent they use that table.

Unlike the horror stories we heard about late rental payment. We never have this issue with them and in fact, they are always early. So my agent (my aunt) never had to do anything. I like their profile and believe that they will treat our house well and we are keen to continue with them if they want to.

For the tenancy agreement, you mean we can mirror the existing template of the version that was signed. We just need to get stamping at IRAS? Is that all the legal requirements we need? I was thinking if they go through their agent which they usually do so, we probably engage her service but on the other hand, the other agent is my aunt so .... In addition, I am thinking what are the value add the agents can bring us. I was thinking if we can cap the agent fees? Is it usually 1/2 month for 1 yr? Frankly, I feel that $500 for the fees for admin is already alot :?

[MMM]

ks2me:

If the agent wants a fee in this case, he/she should get from the tenant who has been using his/her service for this renewal.

It's the same agent who got them the place. I know my aunt and the agent co-broke and share the fees. So this time round seems alittle tricky to get rid of them? On the other hand, hubby was like.... quite expensive huh and where is the value add?

[hquek]

hi mmm,


I see from the agreement I sign that if the tenant continue, I have to continue to use the agent also. It's a matter of trust, and now I guess breach of contract.

I understand, it seems a bit too much for such small paperwork. Just take it as payment for finding a good tenant? Yes, market rate is 1 month for 2 year; half month for 1 year (and plus GST ).

I would say go through a good agent can resolve a lot of worries. Like if anything spoilt, I am fairly sure that my agent will be the one informing us. If there is any bad issue, it's good to have middle party cos emotions won't run so high. I tend to get a bit worked up, so it's good lah.

I would think if you use the tenant's agent. There MAY be conflict of interest and I'm guessing he'll charge market rate also.

If you are keen to continue, maybe you can think to set your base a little lower (ie don't have to set new record for highest rental in the estate lah). I see now units at my estate asking $500 per month MORE than what i settle for. Cest la vie lah...I console myself by saying that this is asking price AND I am not renting out to a carousel of subtenants.

Share story. My mum's current neighbours always change face. I think the tenant sublet it out on short term leases. And they don't take care of the place. The place machiam like hotel (I don't like).

Yet on the other hand, if there is upside, I sure won't want to lose out entirely cos the estate is 99 years....when the place is older, I'm sure tenants would be willing to pay only lower rates.

[MMM]

I will go back to read our agreement tonight.


Actually, I was just thinking if it ends up that we must use agent, then probably I will just get my aunt to talk to them directly and then just wait to pay them for the service :roll: Yes + gst :!:

Hopefully she can offer some perspective on the latest rental value too.

[qms]

MMM:

1) Do they usually negotiate for rental adjustment for extension or based on current contract? How does it work?

New rate based on market. You quote the tenant a rate, and see what they say. If they are not happy, they will counter-offer. Now, it's your turn to decide whether you want to accept the new rate.

MMM:

2) My tenant loves to go through their agent. They have been in Spore for 30 yrs and have been renting :roll: For this property, my auntie was the one who got the tenant for us. When there was aircon issue, their agent got in touch with my aunt but we were the ones who did the follow up by ourselves. I've been communicating to them to come direct to us if there are any problems. Should I send them a email asking if they intend to renew at some point?

Check with them whether they want to go through their agent this time. If so, you have to get the agent in the loop. However, if they want to go through their agent, they have to pay the agent fee, not you. You have to make this known upfront to the tenant's agent, especially since the last time the agent co-broked with your aunt.

The amount of agent fees paid is just a guideline. Ultimately, it is up to the parties to agree on the agent fees to be paid by each party.

MMM:

3) For renewal, we are trying to minimise agent fees but we need to get the paperwork done too. What is the best way to do it? Eg. for extension, what is the market rate for agent fee for paper work? It doesn't make sense for us to pay them 1 month rental. Can we potentially do this paper work ourselves?

You can use the same template from the first agreement. Just need to change the rent and the term/duration of the new agreement, assuming the other T&Cs remain the same.

It is not difficult to do the paperwork yourself. You should do it yourself if time permits, or if you prefer to pay your aunt to do it. The tenant's agent should not get anything from you, unless you appoint her.

I thought stamp duties are typically paid by tenants? Why do you need to pay when you are the landlord? Does the Tenancy Agreement stipulate that the landlord pays for stamp fee? :?

[MMM]

Another question… for the same property, we were recently contemplating if we should sell the place if it hits our psf target. Seems to be coming close in recent caveat. It’s around 9 yrs old so we got it at high price.


We’ve been holding back as we didn’t want to inconvenience our tenant. Some agent called me and I asked them what is the client’s budget? He gave this crap that depends on the unit,etc… client might be willing to pay. I just felt that he never do his homework well… All buyers have a targetted price and would want to get it at cheapest possible value.

My concern was that if we’ve people going to see the place and they cannot pay the psf we are looking at then don’t waste everyone’s time. Importantly, I don’t want to run the risk of our tenant feeling inconvenienced and have 2nd thoughts about continuing in the future. Any thoughts/ experience on that? I think we will meet with this dilemma if the price movement continues to be stable.

[hquek]

qms:

I thought stamp duties are typically paid by tenants? Why do you need to pay when you are the landlord? Does the Tenancy Agreement stipulate that the landlord pays for stamp fee? :?

I think it'll say who pay, I'm not sure about this but I don't think I footed this bill. I only know someone has to get the agreement e-stamped at IRAS else the landlord may be in trouble with IRAS (always tread carefully on this).

[hquek]

MMM:

Another question.... for the same property, we were recently contemplating if we should sell the place if it hits our psf target. Seems to be coming close in recent caveat. It's around 9 yrs old so we got it at high price.


We've been holding back as we didn't want to inconvenience our tenant. Some agent called me and I asked them what is the client's budget? He gave this crap that depends on the unit,etc.. client might be willing to pay. I just felt that he never do his homework well... All buyers have a targetted price and would want to get it at cheapest possible value.

Again, set the target and tell the agent upfront that it's your base (even if it isn't). They'll zhi nan er tui if their base cannot match.

My understanding is that it depends on the tenancy agreement. It may put in that if you sell the property, the tenancy will follow on same terms. My friend just bought one property and the tenant is entitled to stay until Sept. But it's all to do with tenant and new owner - in her case, tenant asked if can break contract and she was most happy to oblige without penalty. New buyer should be informed if there is a tenancy attached.

[MMM]

qms:

Check with them whether they want to go through their agent this time. If so, you have to get the agent in the loop. However, if they want to go through their agent, they have to pay the agent fee, not you. You have to make this known upfront to the tenant's agent, especially since the last time the agent co-broked with your aunt.

How does this work? Can you elaborate further? So I can go to them saying that I don't intend to use a agent and we will handle the paper work ourselves? If they want to use a agent, then it's between them and the agent? But if that is the case, what are the service that the agent will provide? Who is responsible for getting the agreement done up? US or the agent?

qms:

I thought stamp duties are typically paid by tenants? Why do you need to pay when you are the landlord? Does the Tenancy Agreement stipulate that the landlord pays for stamp fee? :?

You are probably right... I can't remember. :lol: see another thread on my poor memory....