806171- Tips for 1st Time Landlords

SURFER’S GIRL

TIPS FOR FIRST-TIME LANDLORDS

Educational article sponsored by
Asiahomes Internet
Affordable Internet advertisements for Singapore Owners/Realtors
Blk 1002, Toa Payoh Lorong 8, #01-1477, Singapore 319074.
Tel: (65) 9668 6468. (65) 254 2728, 254 3326, 254 7944. Fax: (65) 256 0501

Please email drsing@asiahomes.com or call (65) 9668 6468 to:

advertise globally, 24-hours, cheap and effective: S$13.50/40 words/3 months your property for rent or sale by Internet

seek AFFORDABLE HOMES FOR EXPATS.

Real life common encounters on property problems and some possible solutions are shared to benefit all international surfers to www.asiahomes.com.

Ref: 806171
Representative selection for newcomer

Subject: Qualify Internet Tenant to succeed

Comments: Satisfied expats will not go to other agents

A British couple, aged around 50, no small children, will be relocating from Hong Kong to Singapore to start a business. They have no knowledge of Singapore housing and ask you to show them a representative selection of housing at $8,000 rental budget. The husband's company may not provide a car. Specifications given in email correspondence (below).

Write down 14 properties you propose to show them in one Saturday morning and check with "Affordable homes for expats: Article No. 806162- Housing desired by Caucasian chief executive officer.

Email No. 1.

Subject: Re: Relocation to Singapore
Date: Mon, 01 Jun 1998 05:23:20 +0000
From: David Sing drsing@asiahomes.com
Organization: Affordable homes for expats - www.asiahomes.com for tips/Singapore rentals/pets. Asia USA Realty Tel: (65) 9668 6468, (65) 254 2728, 254 3326, Fax: (65) 256 0501

To: XXXxxx@iohk.com
June 1, 1998

Thank you for interesting email and detailed queries. Pl read reply below.

XXX wrote:Hello,We (myself and my wife, both British Citizens) will be relocating toSingapore from Hong Kong later this year and would like to hear from you if you can help find and negotiate accommodation. First some information about our requirements and then some questions about your operation and estate agent practice in Singapore.

My company is based in the UK and has had an office in HK for five years. We are a small consulting company and I will be the only representative in Singapore to start up. It is likely that the apartment will be a part time office until a more permanent company office is set up.

Legally, you will need an employment pass (salary over S$2,000/month)or Work permit or set up a Singapore company to do any business in Singapore.

Because this is the first assignment to Singapore there is not yet a declared budget and this will probably be determined based on information from our initial survey. The budget will also be affected by whether it is necessary to use a car.

The work will involve calling on client organisations rather than sittingbehind an office desk and so transport to and from meetings at business locations (major organisations, mainly government organisations such as LTA, CAAS) will affect choice of location. The company will be setting up an office in Singapore but this will not exist until after we have arrived (since I will have to organise that). The office location will probably be central with the same factors determining its location as the factors for accommodation.

REQUIREMENTS

Location: Probably central close to CBD, or perhaps Orchard Road or Tanglin area.

Near to MRT: yes since a car may not be available.

No of Bedrooms: Three with one of these being used as a Home Office.

Size: After Hong Kong anything would be bigger! Around 2,000 Square Feet, probably.

Budget: Difficult since there are no rules yet. Could vary over a large range depending on the need for car. Assume that accommodation and car lease together would be S$8,500, suggesting that a Central location not requiring car could be at the top of this range and outlying location around S$5,500, assuming a car to be around S$3,000 per month to run (is this a reasonable estimate?).

Car lease varies. From bigger car companies, a Toyota Corona will lease Around S$2,200 - $2,500/month.. I know of a smaller company which will lease a BMW 7 (drinks petrol like water) but is impressive for around S$2,200. $5,500 rental budget should be able to get you an older but renovated 3-bedroom (2100 sq. ft) in Orchard Road location, such as Elizabeth Towers (5-minute walk to Orchard MRT and Orchard Road). I have brand new 3-bedroom (1565 sq. ft) in UE Square for around S$5000/month partially furnished at the moment and some other units. A 4-bedroom maisonette in UE Square (2100 sq ft) at $5,900/month. This figure is subject to change when the company gets involved in the final decision about budget.

Commencement Date: Provisionally 1st August 1998.Duration: 1 year to 18 months, not fixed. See questions.Other facilities: Partly furnished. We will move home office furniture (desks filing and bookcases etc), and King Size bed, but expect other furniture to be provided. Built in or alternative storage/wardrobe space essential. Kitchen to be modern with clothes washer and dryer, hob/oven fridge/freezer as minimum. Dish washer desirable. Quiet Air con important.

Amenities: require Balcony/Roof/Garden space according to style of accommodation. View not critical but privacy important. Convenient for local shopping (provisions, supermarket etc).

Difficult to get good units with balcony and/or roof garden for budget Around S$5,000/month but will try.

QUESTIONS

1) The company will require a lease arrangement that allows a flexible term. We expect to be in Singapore from August 1998 until December 1999 but in this business climate things can change and so it must be possible to limit the lease commitment. A one year break clause would probably be sufficient. Can you confirm that this kind of arrangement is available.

Yes. It is called the "diplomatic clause". After 12 months' occupancy, the Tenant gives 2 months' notice or rent if the Tenant (if it is a corporation) or its employee (the occupant) is repatriated or no longer residing in Singapore. Documentary evidence from the company is needed.

2) As in the first instance all payments will be by Bank Transfer from UK or HK accounts it is important to know what deposits and advance payments are customary or expected. Please advise the items required and at what time in the transaction. Include any government fees such as stamp duty.

Before commencement of lease, the Tenant needs to pay the following:

1. Utilities deposit. $150 (if payment of utilities is by electronic means). $250 if payment is by cheque as is commonly practised by companies.

2. Telephone deposit. No need if the corporation certifies they will be getting an employment pass for you. If you do not have or will not get an employment pass, there may be difficulties getting a phone installed. Unless a local is willing to subscribe and you pay the bills.

3. Stamp fees payment for lease. The Tenant pays the fees for the stamping of the lease agreement. Formula is (monthly rental x 12)/250 x 2 if it is a 1 to 3-year lease.

4. One month's rent in advance.

5. One or 2 months' security deposit for one or 2-year lease.

3) What is the relationship of the agent in Singapore? Do you act for the buyer or the seller? How are the agent fees split? What are the fees based on and therefore what is the amount of agent fees payable?

I assume you are referring to Singapore rental housing. The industry's Practice is as follows:

1. Agent acting for both the Landlord and Tenant gets paid the agency commission by the Landlord only. The fee is one month's rent for a 2-year lease and pro-rated according to the number of years.

2. If the Agent acts for the Tenant, he does not get paid by the Tenant unless the Tenant wants to pay him for securing the lease.

It is very rare but I have encountered one smart practice whereby the Tenant "covers" the agent for securing the rental below market rate. For example, I have this Dutch boss who promised to compensate the agents (myself and the co-broking agent) if we achieve the target of less than $6,000 for a brand new 4-bedroom condo in UE Square. We managed to get for him $5,800 and therefore he will compensate for the difference of $200 if it is a 2-year lease or pro-rated accordingly. Obviously, he saves $2400 x 3 years since it is a 3-year lease.

The Landlord can also motivate the Agent for securing a higher rental by payment of extra cash. A common complaint is that the Agent says every house seen rents for $6,000 And this indicates that the Agent is not honest. Obviously, the Agent tries to earn as much as he can while the Landlords appreciates higher rent. Once you have seen several units, you will be able to judge as there is no "market rent" in a declining market. Many units rent lower than advertised if the Landlord is shrewd and knows that rent declines over the next few months till the new condo is filled. Much depends on the integrity of the housing agent as in this case, I acted For the Tenant and the co-broking agent acted for the Landlord. An agent going For the long haul should be honest with the other agent and landlord and will ensure that the Tenant gets the lowest rental or value for money.

3. The Tenant does not pay any amount to the Agent for securing private housing but pays an amount for public housing called HDB (Housing Development Board) apartment.

4) What are the customary legal processes in a property transaction. What are typical charges?

It is best to consult a good lawyer on legal matters. From my experiences with expatriates and assuming you are referring to Singapore rental housing, the legal processes involve the proper set up of the office legally and getting an employment pass for you. I can get for you a "serviced office" (commonly used by start-ups), representative office or an office space.

If you work from home, you should have an employment pass. Residences are Not meant to be offices, esp HDB apartments. Since you do not conduct business at home, it should be all right.

I doubt there are typical charges. Charges include your lawyer's fee for advising on the lease contract, setting up of office and employment matters. If your lawyer has to write the lease, he will charge you according to a Scale of fees. Include the accountant's fees.

Payment of stamping fees to the Commissioner of Stamp Duties (formula given in reply).

5) What extra costs are there over the rental (government rates or rent, management fees, etc.) These will all have to be included in the budget estimate.

Utiliites bill monthly amounts to more than $300 if your air condtioners Are switched on 24 hours.

Car parking fees of S$110/month payable by the Tenant (usually) in some Condos such as the UE Square. Usually free of charge in almost all condos.

Television licence ($100/year) and cable TV subscription bills payable by the Tenant. Amount varies.

Minor repairs of S$100/occurrence if repair is less than $100 is payable by the Tenant in many agreements.

Air-conditioning service to be the Tenant's expense in many cases. Charges are usually $50/compressor/quarterly.

Condo maintenance fees are usually payable by the Landlord.

6) In the event of a company set budget limit it is to my advantage to negotiate other items such as water, electricity charges etc to be included in the rental figure. Can this be done?

Yes. Get a good realtor to negotiate inclusion of utilities bill, capped e.g. at $300/month for you. Sometimes, the maid's services and other services such as car rental can be included in the rental offered.

ACTION PLAN

We propose to visit Singapore during the weekend 12th to 14 June and to spend some of the time on Friday and Saturday investigating locations and associated costs, advantages and difficulties. We would then return around the 7th to 10th July to view with a definite intention to decide and commence the process to start the lease on or around the 1st August.

Please confirm that you could help with arrangements during these times.

In the event that we are only able to be in Singapore for 13th and 14th June will it still be possible to do some preliminary viewing only on Saturday (or Sunday) to determine suitable locations and budget range.

June 12-14 is OK with me. However, please give me a 7 days' notice to plan. Sometimes, my schedule with other expats mean that I cannot be available for the whole period of time. June is a peak house hunting season. Will ask my colleague to assist but I prefer to handle the case.

Pl let me know if you have more queries.

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Email No. 2.

Subject: Re: Relocation to SingaporeDate: Mon, 08 Jun 1998 23:59:57 +0000From: David Sing <drsing@asiahomes.com>Organization: Affordable homes for expats - www.asiahomes.com for tips/Singapore rentals/pets. Asia USA Realty Tel: (65) 9668 6468, (65) 254 2728, 254 3326, Fax: (65) 256 0501

To: XXXxxx@iohk.com
Hi

1. My mobile tel is 9668 6468. Please let me know your mobile tel no.

2. Please specify the time and days available for viewing a representative selection of accommodation as it will be difficult for me to change schedule once appointments are made with landlords and other agents.

3. Plane can be delayed so it is not advisable to schedule so close to your arrival time. Recently, one prospect cancelled the whole afternoon viewing because he was busy with his meetings. Therefore, it is best to organise properly.

4. Once I get proper time schedule (to take into account your meetings as some units are quite far from downtown), I will propose itinerary.

5. To update, please let me know what type of properties you would like to see:

e.g. houses next to American School.condos with over 4 bedrooms. rental budget around $7000

It is 8th June tonight and I will have time to prepare a good selection since you have given me advance notice but I really need to know the timing. I work on weekends too. One afternoon viewing - can see around 5 - 10 units. But we need to qualify what you want first otherwise time will be wasted. E.g. if your rental budget is $6000 and we spend time seeing $3000 units, it will really be a waste of time. Bye.

XXX wrote:

I expect to confirm flight HKG-SIN arriving 11.35 on Friday 12th and so could meet in Business District or Hotel around 12 30 or after lunch. I will confirm this when arrangements made, probably tomorrow (Friday). We would be available at any time over the weekend but I may require to meet business contact on Friday afternoon or Saturday morning for a short time. If possible I will check this out tomorrow so that I can confirm the whole time schedule at the same time.

We will arrive Singapore on 12/6 as stated and I expect we will be in the City Centre around 12.30. I have an appointment at the British High Commission in Tanglin Road at 3.45 PM to 4.15 PM. We are available between 12.30 and 3.30 and after 4.30 on Friday, or any time on Saturday or on Sunday until around 3 PM. We depart at 5.35 from Changi. We do not expect to use the entire time for viewing apartments and hope that you can make a representative selection to allow us to discuss our detailed requirements

with you after we see what style and standard of accommodation is available. Note that we will not be able to make any decisions until our return around the 7th July.

I look forward to your suggestions for an introductory itinerary. Please suggest a meeting point. Alternatively we will advise you our hotel when arranged and we can meet there.

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Email No. 3.

Subject: Re: Relocation to Singapore

Date: Tue, 16 Jun 1998 04:06:25 +0000

From: David Sing <drsing@asiahomes.com>

Organization: Affordable homes for expats - www.asiahomes.com for tips/Singapore rentals/pets. Asia USA Realty Tel: (65) 9668 6468, (65) 254 2728, 254 3326, Fax: (65) 256 0501

To: XXX<xxx@iohk.com>

Most happy to have met you and wife. One of the better days for me and the prospective tenant in that there are so many appropriate choices. Will await your reply and act. If you need serviced offices later, please let me know. Best wishes to your wife and hope she will be happy in Singapore too.

XXX wrote:Many thanks for your attention on Saturday. You provided a comprehensive survey of accommodation to match our specification.I must review the information obtained during our visit with my Head Office in the UK and then will reply to you again with our preferred actions, final budget and timetable all of which must be confirmed by the company.

I do not expect any significant departure from the situation I have already described to you.

From the properties viewed we consider that the following is our personal preference in order:

See "Affordable Homes for Expats - Article No. 806162: Housing Desired by Caucasian Chief Executive Officer. 5/14 choices were selected by the surfer in 5 hours of viewing. This article emphasizes the importance of getting appropriate rental housing through qualification of the Internet Tenant. Co-broking is essential if you want to be successful as you want your prospect to get the best of what Singapore has to offer.

It is best to close with one viewing by co- broking, rather than drag on for more viewings and lose your client to another agent, due to your "incompetence" or inexperience.

Note that the No. 2 choice was a co-broking case.

Asia USA Realty is looking for retirees interested in providing a personalised service as rental housing agents. No quota. Please call us for further discussion.

Asiahomes Internet provides the cheapest Internet property advertisements for new housing agent, at S$13.50/40 words/3 months. If you have rental properties targeted at "ang mos", it will be worthwhile advertising with us as we focus on expatriate rentals and our website is probably the only one in Singapore to concentrate on rental housing.

Good luck in your new career.