Passive rental income, awesome idea right? The rental process isn’t all rainbows and money counting happiness; it can come with many problems as well if not handled properly. Having been in this industry for 5 to 6 years, I’ve met some real estate agents that have sworn to “not do rental” ever again, saying it’s “too much trouble” for the meager commission earned. Here are some practical tips to help you navigate your rental transaction.
It’s all about perspectives
Landlords point of view
If you have a property, naturally you’d want to spend as little and earn as much as possible right?
- For example, since the washing machine is still spinning, let’s not waste money replacing the 8 year old washer. Why should we?
- The queen size mattress still can sleep on mah, it’s still springy what, just a few stains. I spent $XXX on it 8 years ago ley!
- I want to get the highest rental in my block/condo! Break record!
Of course, not all landlords are like what i have described, while majority of the landlords i’ve met are nice and understanding people, it’s not uncommon for landlords to have the above mentioned mindset.
Tenants / Prospective tenants point of view
- Aiyo, I wonder how many people slept on this mattress before me.
- Is that mold all around the rubber gasket of the washing machine, am I supposed to use that in the future?
- White walls have some stains and marks, can I ask for repainting?
- Asking rent so high, can nego or not for brand new appliances?
Compromise (win-win!)
Have you heard or said some of the comments above?
A real estate agent’s job is to reconcile differences between landlords and prospective tenants, so both sides can move forward. We have to dig deeper and understand both sides point of view to get a win-win situation. If you are a property owner trying to rent out the place yourself, please ask to find out more to screen the prospect and don’t take it personally about the feedback they make.
My point is, we have to get a deeper understanding of one’s requirements and perspectives to be able to provide alternative solutions.
- Maybe the Tenant is bothered about the washer being old and dirty, but don’t mind paying themselves and buying a set to replace the old one. Same goes with the mattress. Some tenants don’t mind paying to buy some items that they deem important and will eventually leave it as the landlord’s inventory. (win-win!)
- Maybe tenants want to ask for repainting because they are afraid that they’ll be held accountable at the end of their lease and the landlord will accuse them of dirtying the walls. The tenant might be more likely to accept and go ahead if it’s just some minor scuff marks and they can get some assurance from the landlord that it won’t be penalized when lease term is up. (win-win!)
Lease term up soon! Renew or not?
It’s almost the end of the lease term. In some cases, landlords might want to increase rates, but tenants are reaching their limits.
My advice would be for the landlord to consider the “behavior and conduct” of the tenant this past period, although rental income is the primary objective here, it should not be the most important decision factor for renewal.
- Did the tenant pay their rental on time?
- Did the tenant upkeep the property and fixtures to the best of their effort?
- Did they do any “funny stuff” for example, rearing a pet dog when the Tenancy Agreement explicitly has a No-pets clause; burning incense indoors leaving you with a black ceiling and leaving the pungent smell lingering in every corner of the house
- Are they easy to communicate with? Sometimes missing a payment due to their busy schedules or overseas deployment can be solved with a simple text reminder.
Those are just some of the intangible positives that give the landlord peace of mind and should most definitely be considered. In my humble opinion, even if it’s a little bit less than the market rate, but the tenant is a good tenant, it’s worth it to renew with them. You might not know if the next tenant is an angel or tenant from hell!
You might not know if the next tenant is an angel or tenant from hell!
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