Recently, I met property investors who complained about the property rental market, citing difficulty in renting out their properties. Some common reasons given were the reduced number of expatriates coming and staying in Singapore, coupled with the increasing number of condominiums being completed. This posed a challenge to the investors as they faced stiffer competition against a backdrop of lower demand.
But is that really the case?
I studied the data released by the URA on the 4th Quarter 2018 real estate statistics. Looking at the rental index of private residential properties, 2018 saw a positive increase of 0.6%, compared to 2017, which saw a decline of 1.9%. This is contrary to the belief that rentals are not doing as well as before.
Source: URA, Release of 4th Quarter 2018 real estate statistics
The next critical piece of information that I looked for was the vacancy rate.
The vacancy rate of completed private residential units (excluding ECs) has in fact decreased to 6.4% (at the end of 4th Quarter 2018), compared to 6.8% in the previous quarter. Hence, the rental market is picking up and indeed recovering.
Despite the figures, why are there Investors expressing difficulty in renting out their property?
The numbers depict here are the average across all private residential properties in Singapore. Hence, I do not expect all areas in Singapore to have the same level of rental performance.
TIPS ON RENTING OUT YOUR PROPERTY
If you are experiencing difficulties in renting out your property, here are 6 tips to help you:
1. HAVING A REALISTIC ASKING RENTAL
No investors would want to “under rent” their property. Similarly, no tenants would want to “over pay” their rentals. With rental information readily available these days, it is easy for potential tenants to compare and find the best value on rentals done to properties of similar development in their area of interests.
However, you can also use the same information to your advantage. By keeping yourself updated with the latest rental market trends, you will be able to gauge a better asking price for renting out your property.
Having an excessive asking rental will result in alienating potential tenants, which translates to your property being vacant for extended periods and a net loss of earnings.
2. MAKING YOUR PROPERTY MORE APPEALING TO TENANTS
Even before putting your property up for rental, making improvements on its interior such as repainting, tidying up, rearranging, cleaning and decluttering can make a big difference in giving a better first impression to potential tenants.
3. EFFECTIVE MARKETING
A visually aesthetic property, coupled with professionally well taken photos, will set the stage right towards marketing your property for rental.
However, it is also equally important that your advertisements are listed on the correct marketing platforms or websites to capture direct viewership.
These measures will in turn generate more responses and increase your odds in securing a tenant.
4. ADVERTISE YOUR PROPERTY IN ADVANCE BEFORE CURRENT LEASE RUNS OUT
Instead of leaving it to the last minute when the current tenant is about to move out, you may want to advertise and facilitate the viewing of the unit to prospective tenants before the current tenancy runs out. This approach will shorten the vacancy period of your property, and this means more earnings! In addition, it will also give you a chance to do some advance repairs on the unit and to see the unit’s physical conditions before the current lease runs out.
5. HAVE A PROPER HANDING-TAKING OVER
Have a checklist to establish a clear understanding between you and your outgoing tenant on the cleaning and clearing expectations of your property before the handing-taking over day. This should be done well ahead to minimize inconveniences to both parties.
Taking over your property in a neat and tidy condition puts you in good stead to either, receive any new tenant moving in immediately, or, to facilitate viewing for potential tenants.
6. OPENNESS TO AGENT SEEING THE UNIT
It is interesting to note from my personal experiences, as well as those from my fellow property agents in my Division, that sometimes home owners do not allow the agent to view their property, unless he(she) brings along potential tenant(s).
I can understand sometimes why owners don’t want the agent to view the unit. As many agents may have already approached the owner to see the house, and yet after seeing the house, they are not bringing any prospective tenants to view the house. Thus home owners felt let down by the agents.
On the other hand, if an agent did not see the property, how will the agent be able do the marketing well?
The important thing here is not to have many agents marketing the same property, but rather, one who can do a good job.
An agent who adopts the various tips as mentioned above will most likely fetch you a good rental rate, and possibly secure a tenant faster.
If you have any queries on renting out your property, you are welcome to drop me a message: