Asia USA Realty (Singapore)
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Affordable Homes for Expatriates
Article No. 808191Case Study: Landlord, Integriy of, "The CPIB and bread"
Subject: Asia USA Research: Old Mistress with spacious 4-bedrooms: Cuscaden Tower
For Rent: 4+1 3766 sf $13,000, 15th floor, renovated. Other units, contact Asia USA or
drsing@asiahomes.com
Cuscaden Tower Date of report: August 19, 199813 years old
- Location: 6 Cuscaden Walk.
- Age:
Contact Asia USA (65) 9668 6468 if
you wish to rent a unit, anytime when you arrive in |
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Total No. of units: 16
- Orchard Road location and within 10-minute walk to the Orchard subway and the American Club/Tanglin Club and shop till you drop.
- Low density (16 units only).
- One unit/floor. Maximum privacy. No need to greet neighbours. Suits ambassadors and expats who dislike neighbours.
- Caucasian expat enclave neighbourhood, usually senior management-type Tenants.
- Four-bedroom units only and very spacious. There is a shortfall of spacious four-bedroom apartments in Singapore especially in Orchard area where the demand is greatest and Cuscaden Tower has the spacious feeling of all rooms and panoramic view of city (higher floors).
- Close to the Paterson Road International Schools (OFS & ISS).
- Supermarkets in the Lido and other malls nearby.
- Many eateries along Orchard Road.
- City noises and crowds.
- No gym, tennis court and therefore will not attract the young expats.
- Not sexy looking like Costa Rhu or new condos. Whole apartment is overdue for upgrading. Looks like an old bomb although swimming pool is clean and well maintained.
4-bedroom: 350 sqm
Penthouse: 661 sqm
Finishes & Fittings: Living/dining - marble tiles. Bedrooms - wool carpet
unless renovated. Built-in wardrobe, kitchen cabinet, cooker hob & hood, air
conditioning, depending on remodelling by Owner.
Facilities: Swimming pool, 24-hour security, squash court, covered car park and
barbecue area.
Occupancy rate: Almost 90%. 2/16 units available.
Competitiors: Parisian (27 units) at Anguilla Park. The Claymore (146 units). Few
city condos have 4 bedrooms with such large living areas and most command a monthly
rental above $10,000.
Note to newcomer expat:
please contact Asia to help you get the best deal.Investors to note: Freehold. Worth investing as this is prime Orchard Road location. Targeted niche of older Caucasians (above 50 years old) who want Orchard Road but none of the fanciful swimming pools, tennis court or gym. The American & Tanglin Clubs are within walking distance. Hopes of making a quick kill at enbloc sale have faded with the present economic downtown.
Advantages:
Disadvantages:
Case Study: Landlord, Integrity and bread
What should the Landlord do when the Tenant asks for beneifts like maid services, payment of utilities and the Introducer asks for monthly management fees ? |
Case 1.
"This is not Vietnam, this is (squeaky clean) Singapore!"
reiterated the Singaporean realtor in charge of a house in Vanda Link when Asia USA associate asked whether her client was willing to provide monthly fees to pay for the maid. "We have our integrity and we don't deal with such prospects (and lose our agency licence). "The CPIB (Corrupt Practice Investingation Board of Singapore) would consider this practice corruption……" No money goes to the Tenant or Asia USA but the Landlord would foot the bills. The Landlord's agent considered this corruption and the case was thrown out.Case 2.
"We are not comfortable in paying the utilities bill (out of the rental payment)"
said a Taiwanese Owner of Costa Rhu. Another case was thrown out. As Costa Rhu has so many listings, it was not difficult to find one Landlord agreeable to this practice.Case 3.
"We have so many properties and have not encountered such a situation. It is kickbacks to the Consulting Agent!"
said a ruffled Singaporean Owner of Costa Rhu. The Introducer or the local management consultant company to this American firm wanted $500 from the $4,500 rental to be paid to the firm (invoices and receipts properly done) monthly. The Landlord was happy with the $4,000 rental and a good corporate lease. The wife was saying that Australian Realtors managing the unit charges only 6% of the rental fee. However, this is besides the point as in this case, no management fee was charged for the $4,000 rental received. The $500 was not given to the co-broking agent or Asia USA.Asia USA associate advised that the "management fee" is an incentive for the Introducer to recommend the unit (and it had been over 3 months without any interest in this ground floor Costa Rhu unit). The unit had been advertised by the Landlord and by Asia USA (3 times/week in the Straits Times with poor response).
The Landlord has a high mortgage interest to pay. The investment condo cannot be vacant for longer periods as there must be bread on the table and the bargaining power of the Landlord has eroded tremendously. There will always be another flexible Landlord
It can be considered an expense and although it constituted 20% of the rental, there are no statutory regulations, as far as Asia USA is aware of, limiting the scale of management fees. Whether this is a kickback or not is debateable as the Consulting Agent has had provided services to the American couple, accompanying them on house inspections with the co-broking agent.
Conclusion. Value for money is now more important to catch the Tenant. If your condo is on the ground floor, it is extremely unpopular because of the perceived lack of security and privacy. Once you get a Tenant and you probably get one offer in several months, in general, you should be flexible.
Tax implications, rather than corruption is the crux of the matter for most sophisticated Landlords. Management fees are tax-deductable as the services provided are bona fide. Provision for maid services under Management fees may also be tax deductable. Please consult your own Accountant and Auditor.
In the end, early occupancy and more taxes to be paid are more important. Integrity is important too but there does not appear to be any corruption in paying management fees. Perhaps, Internet surfers would like to comment and email comments to
drsing@asiahomes.com..
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