March 2010

(rented) PARK INFINIA $5,200 CONDO 2 ROOMS

PARK INFINIA    $5,200    CONDO    2 ROOMS

NOVENA MRT, UNITED SQUARE SHOPPING, WONDERFUL FACILITIES, GOOD CONDITION INTERIOR, BRIGHT AND BREEZY, ALREADY COBROKE

CALL 9001-1207    http://gothere.sg/maps#q:park%20infinia

Get better yield for your rental property

How to get better rental yield for your property?

The four core principles in getting good rental yield;

1. Increase rental fees
2. Decrease vacant period
3. Increase tax-deductible expenses
4. Manage proper accounts

1. Increase rental fees (monthly rental rates)

This will obviously help to improve your rental returns. Stay updated on the market rental rates, so that you will know how much to increase for the next renewal or new tenant. Do remember to keep your rental competitive because over-pricing will result in longer tenant-searching period, and result in longer vacancy period. You can provide incentive monetary schemes (on top of the commission) to attract more agents to bring tenants to your rental property. Many corporate tenants (especially for budgets above $5000) are exclusively handled by specialist agents. Getting them to like you and your property should result in your property getting better rental. A good rental property specialist who has a close network with the corporate specialist agents will be highly beneficial to you.

2. Leave your rental property vacant for as short a time as possible.

Expect realistic market rental rates instead of pricing yourself above the market range and subsequently having to reduce down to the market level after 2 months of vacant period. 2 months of vacancy already equates to at least 15% decline in gross rental revenue. During a downturn, the time taken to source for a tenant will naturally take longer because of the economy and job market situation. There is no solution for the market’s cyclical nature, however, you can work to mitigate the situation by capitalising on the depressed rental market to do improvement works to your property. Depending on your budget and range of work to be done, you can time the renovation to finish at the time your new tenant decides to commence the lease. Once the rental market starts to improve again, at the next rental revision, you can then get to re-rent your property faster (being renovated) and at a better rental value than others. A good property manager will be able to advice you properly on how and where to do the improvement works – doing a complete overhaul may not be the best solution.

3. Increase tax-deductible expenses (and reduce other unnecessary expenses)

See a list of tax-deductible expenses for your investment property (from Inland Revenue Authority of Singapore). A few deductible expenses to note (which may sometimes be neglected) include

• Repairs done to restore the property to its original state
• Cost of maintaining the property (e.g. painting, pest control, monthly maintenance charges to management corporations)
• Agent’s commission, advertising, legal expenses for getting subsequent tenants
• Costs of supervision and rent collection if you rent out a number of properties and incur costs in engaging a third party (e.g. property agent / company) to supervise the properties and to collect rent on your behalf, a sum not exceeding 5% of the gross rent or the actual amount spent, whichever is less, may be considered. Each case will be considered on its own merits.

NOT-DEDUCTIBLE

• Penalty imposed on property tax (or late-payment)
• Cost of renovation, additions, alterations to the property or repairs done resulting in improvement
• Agent’s commission, advertising and legal expenses for getting the first tenant
• Depreciation of furnishings (e.g furniture, fixtures, electrical appliances)

4. Keep proper accounts for your rental property

Manage your rental property like how you would operate a business. The contracts and accounts should all be kept properly and in a systematic manner. This will help you to get a good overall picture of your “business” and substantiate appeals if tax expense claims are rejected by the authorities. Download for free – Rental Income Statement (excel spreadsheet) for reporting to IRAS

List your Singapore property for rent with us. See Featured Properties with Good Rental Yield.

(rented) ASTORIA APARTMENT $6,800 CONDO 3 ROOMS VERY SPACIOUS – 1800SQFT

ASTORIA APARTMENT    $6,800    CONDO    3 ROOMS   VERY SPACIOUS – 1800SQFT

WALKING DISTANCE TO ORCHARD ROAD, WELL-KEPT, NEGOTIABLE

CALL 9100-1090    http://gothere.sg/maps#q:astoria%20apartment

Why you really need an exclusive agent to sell your property

Many property sellers don’t like to sign an exclusive agreement with an agent.

Typical reasons we hear are

1. Then, there will be more agents working for me and I can get a higher price << our reply — not correct, because these agents may not act solely in the interest of getting the highest price for you
2. I’m worried he doesn’t spend time and effort on my property and if the property is still not sold after 2, 3 months, I am still tied down by the exclusive agreement and can’t list with other agents << our reply — correct, and that’s why you can sack us at any time if you are not satisfied with our service
3. I can save on the commission by selling the property myself << not correct — because majority of buyers are brought in by an agent and the agent will still get commission from you
4. What’s so difficult about selling a property? It’s just advertising, answering phone calls and going to open the house << half correct — you need the time, effort, knowledge and experience to do the whole process correctly, one wrong move could prove “fatal” to the deal

A good, reliable and professional property agent will not only get a higher price for the seller in the shortest time but also with the least amount of hassle for the seller.

By signing on exclusively with one agent (but do make sure he or she is a good, reliable and professional property agent), a seller will get to enjoy these benefits

1. The agent’s and agency’s network of in-house agents and co-broke agents who are specialists in the particular market segment
2. Getting featured, enhanced ad placements for marketing – website, flyers, e-newsletters, newspaper ads, etc
3. Much more awareness and buyer traffic for the property than if the seller tries to d-i-y
4. A professional’s skill in selling benefits to potential buyers – sales techniques, targeting the correct group of buyers, ad copywriting, pricing and negotiation
5. A professional to solely protect seller’s interests – getting the best price for the seller, otherwise the buyer’s agent will aggressively try to reduce the seller’s price in order to get maximum savings for buyer
6. A professional’s objectivity in the negotiation process – not being emotionally involved, staying focused on the purpose – getting the best price for the seller
7. Hassle-free selling – the agent handles everything – from valuation to marketing to conducting viewings to negotiating to document processing to liaising with banks and lawyers to handover
8. Ability to transfer the stress of selling to the agent and have fun pressurising the agent to show results

Now, if you are convinced about why you really need an exclusive agent, exclusively to sell your property and look after YOUR interest, let us tell you how we benefit you;

1. Acting as your exclusive agent, we will have the confidence to market your property aggressively – your property will receive much more attention from agents and potential buyers, receiving more newspaper placements, featured ad placements in website and other marketing materials
2. As your exclusive agent, we will make sure you get to spend more time with your family, on your work, with your friends, rather than be busy with the property
3. Working as your exclusive agent, we will put in 100% effort on your property, ensuring all viewing requests for your property are given top priority in our daily schedule
4. Our commission fees schedule will be given to you BEFORE you sign the exclusive agreement with us and it will fair and yet flexible (“attractively incentivised” to ensure we work doubly hard on your property, and ensuring you get the best price for your property)
5. Our exclusive agreement will have an “escape clause” for you – if at any time you are not satisfied with us, you are free to terminate the contract immediately

Contact a good, reliable and professional property agent today, or you can submit your property details and we will be in touch with you shortly.

(rented) SCOTTS 28 $6,000 CONDO 2 ROOMS

SCOTTS 28    $6,000    CONDO    2 ROOMS

WELL KEPT INTERIOR, LOVELY CONDO FACILITIES, EXCELLENT LOCATION (WALK TO ORCHARD ROAD), PRESTIGIOUS CONDO

CALL 9851-2159    http://gothere.sg/maps#q:scotts%2028

(sold) NEWTON EURO-ASIA $1,630,000 CONDO FH 1,184SQFT 3+1 ROOMS

NEWTON EURO-ASIA    $1,630,000    CONDO    FH    1,184SQFT    3+1 ROOMS

NO WEST SUN, GOOD LAYOUT, LESS THAN $1400PSF! NEWTON & NOVENA MRT, NOVENA SQUARE, UNITED SQUARE, SJI JUNIOR, ACS JUNIOR

CALL 9380-7211    http://gothere.sg/maps#q:newton%20euro%20asia

Singapore home loan calculator – get it free

Get a free home loan calculator

1. Easy to use (excel spreadsheet format)
2. Information fields required – property price, loan period, loan percentage loan amount (seeing how strong prices are going, you might have to pay a price which valuation can’t match, so this is more appropriate) and yearly interest rates
3. Displayed results – downpayment amount, monthly mortgage, initial cash outlay, monthly cash component (less of CPF), typical fees for property purchase
4. Direct links to banks and financial institutions

(rented) EMERALD PARK $4,000 CONDO 3+1 ROOMS

EMERALD PARK    $4,000    CONDO    3+1 ROOMS

PARTIAL FURNISHED, NEAR GREAT WORLD CITY, CONDO FACILITIES, MINUTES DRIVE FROM CBD

CALL 9380-7211    http://gothere.sg/maps#q:emerald%20park

See reviews about Emerald Park Condo

Buy high sell high, buy low sell low

Many people say property investment is only for the rich people who can “time” the market because they can afford to buy & sell investment properties at the correct time. “They” also say those who can only afford a single property for own-stay will always have to follow the “buy high sell high, buy low sell low” concept.

“They” are absolutely correct.

So then, what’s the point of this article?

An illustration

Let’s say, prices are currently on the high side, a home owner (currently in a 2-bedder) wishes to upgrade to a larger property (a 3-bedder) in the nearby vicinity. Assuming in general, prices of properties in his area has increased 20% from 2 years ago.

2 years ago – his own property value ~ $500,000, his intended purchase ~ $700,000

Today – his own property value ~ $600,000, his intended purchase ~ $840,000

In percentage terms, the value of both properties have increased by similar amounts. However, in absolute value terms, his intended purchase has increased by $140,000 whereas his own property has only increased by $100,000. The price gap between own property and intended purchase has risen from $200,000 to $240,000.

So, the smarter choice for upgraders would actually be to enter the market at a trough period of the property cycle, whereas those who are looking to downsize should actually buy high sell high because the equivalent percentage decrease in price would translate to smaller loss for the home owner.

UPGRADERS should enter at bottom of market (or uptrending market), and buy before you sell

DOWNGRADERS should exit at peak of market (or downtrending market), and sell before you buy

Need a professional property agent? We’re here for you =)

Sell my house fast and at a high price

1. Sell house fast
2. Sell house at high price

The two very common requests made by home sellers.

Of course, property agents love to sell houses fast and at high prices. It’s a fast turnover and higher prices means more commission for the agents.

Very often, reality proves that things aren’t so simple – speed of selling and asking prices are usually somewhat inversely related. An over-priced property will not receive as much attention from agents and buyers because they know the listing agent or the seller is “asking too much”. A quick search on the internet and newspaper classifieds will easily reveal the “market price” of a property. Even if there may be buyers who are emotionally attached to the property (reasons such as – used to live there during childhood, parents staying nearby), they are obviously not going to find the “attachment” if they don’t even bother to go view the property.

Either the seller needs to get realistic and reduce the price to market level or risk holding onto the investment going over the peak of the property cycle and eventually having to sell off the property at a discount off what he initially could have received when prices were on the uptrend (when there could have been lots of interest for the property).

Many property agents dislike having to correct the price expectations of the home sellers (even if it’s obviously going to be a record high price), because by agreeing to the seller’s price, agents will be able to get the exclusive listing from the seller more easily.

However, what home sellers don’t understand is this – if the property is not sold within the first 30 days or so, the number of interested buyers will reduce greatly (less buyers generally mean less interests, less competition and less probability of a high price).

Buyers’ agents are not interested in bringing buyers to this property anymore. They simply won’t waste time recommending or showing the property to buyers, when they know the buyers will never match the asking price for this property.

So, if the seller’s agent is unable to get a price reduction from the seller, fact of the matter is, he is simply going to leave the property in the back of his “to-do” folder and concentrate time and resources on another property listing which is more reasonably priced. Meanwhile the exclusive agreement still continues and the seller is still paying the maintenance, mortgage, etc on the property.

Properly priced properties will ensure there’s maximum exposure and interests for the property and sellers get “the best price” possible, in the shortest time. Properties that are priced correctly will typically sell (or at least have a good offer) within 2 to 4 weeks of being listed.

Valuation is merely an indication of the possible value placed on this property. The price is what the buyers are willing to offer to secure ownership of the property. These are two very different concepts.

Only during a rising market, will buyers be happy to pay a premium over valuation. The competition from multiple interested parties will help sellers maintain an advantageous position and sell the property at a premium price to the “highest bidder”.

Property sellers should take advantage of the market cycle (uptrend) to secure a high price (not overprice) for their property. Missing out on the opportunity to capitalise on the market uptrend might turn out to be a costly mistake later. Studies have often shown that prices rise slower during uptrend but crash faster during downtrends. Once “the peak” is reached, or generally perceived to be reached, the only way is down and buyers will turn up (if they even turn up) offering ridiculous discounts off valuation. Holding onto the property investment to wait for the next uptrend in the cycle could mean a holding time period of 3 to 5 years, or even longer, meanwhile still servicing the loan, hopefully mortgage rates don’t increase and you always have a tenancy running.

The smarter alternative would have been for the seller to cash out of this investment, lock in the profits, put the funds to use in other more liquid investments (when things look risky, switch to safer investments with reasonable returns to tide over) whilst waiting for the next downtrend and ride on the market cycle once again (this time – with even more capital funds to invest).

Interested to sell your property fast and at a “reasonably” high price? Send us your property details.

P/S – real estate is illiquid in nature, unlike stocks, you will need buffer time to market the property, execute the sale and receive the sales proceeds.

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