Rental questions

[MMM]

Another question.... for the same property, we were recently contemplating if we should sell the place if it hits our psf target. Seems to be coming close in recent caveat. It's around 9 yrs old so we got it at high price.

We've been holding back as we didn't want to inconvenience our tenant. Some agent called me and I asked them what is the client's budget? He gave this crap that depends on the unit,etc.. client might be willing to pay. I just felt that he never do his homework well... All buyers have a targetted price and would want to get it at cheapest possible value.

My concern was that if we've people going to see the place and they cannot pay the psf we are looking at then don't waste everyone's time. Importantly, I don't want to run the risk of our tenant feeling inconvenienced and have 2nd thoughts about continuing in the future. Any thoughts/ experience on that? I think we will meet with this dilemma if the price movement continues to be stable.

[hquek]

I thought stamp duties are typically paid by tenants? Why do you need to pay when you are the landlord? Does the Tenancy Agreement stipulate that the landlord pays for stamp fee?

I think it'll say who pay, I'm not sure about this but I don't think I footed this bill. I only know someone has to get the agreement e-stamped at IRAS else the landlord may be in trouble with IRAS (always tread carefully on this).

[hquek]

Another question.... for the same property, we were recently contemplating if we should sell the place if it hits our psf target. Seems to be coming close in recent caveat. It's around 9 yrs old so we got it at high price.

We've been holding back as we didn't want to inconvenience our tenant. Some agent called me and I asked them what is the client's budget? He gave this crap that depends on the unit,etc.. client might be willing to pay. I just felt that he never do his homework well... All buyers have a targetted price and would want to get it at cheapest possible value.

Again, set the target and tell the agent upfront that it's your base (even if it isn't). They'll zhi nan er tui if their base cannot match.

My understanding is that it depends on the tenancy agreement. It may put in that if you sell the property, the tenancy will follow on same terms. My friend just bought one property and the tenant is entitled to stay until Sept. But it's all to do with tenant and new owner - in her case, tenant asked if can break contract and she was most happy to oblige without penalty. New buyer should be informed if there is a tenancy attached.

[MMM]

Check with them whether they want to go through their agent this time. If so, you have to get the agent in the loop. However, if they want to go through their agent, they have to pay the agent fee, not you. You have to make this known upfront to the tenant's agent, especially since the last time the agent co-broked with your aunt.

How does this work? Can you elaborate further? So I can go to them saying that I don't intend to use a agent and we will handle the paper work ourselves? If they want to use a agent, then it's between them and the agent? But if that is the case, what are the service that the agent will provide? Who is responsible for getting the agreement done up? US or the agent?

I thought stamp duties are typically paid by tenants? Why do you need to pay when you are the landlord? Does the Tenancy Agreement stipulate that the landlord pays for stamp fee?

You are probably right... I can't remember. see another thread on my poor memory....

[qms]

How does this work? Can you elaborate further? So I can go to them saying that I don't intend to use a agent and we will handle the paper work ourselves? If they want to use a agent, then it's between them and the agent? But if that is the case, what are the service that the agent will provide? Who is responsible for getting the agreement done up? US or the agent?

Yes, tell the tenant you don't want to go through the agent. If they insist on going through the agent, they will have to pay the agent.

However, you have to prepare the Tenancy Agreement (TA) yourself. If you need the agent to help you, you will need to pay the agent. As far you, the landlord, is concerned, you still go through the agent on any matters henceforth.

The agent will act as a witness for the tenant during the signing of the contract, and help do the legwork to get the TA stamped with IRAS.

[qms]

MMM,

Something major slipped my mind.

I suppose your monthly rent is more than $2,500, right? No wonder the tenant insisted on going through the agent. The landlord pays for the commission for any rent that is more than $2,500. Hence, to the tenant, they don't incur any cost at all.

So, under this circumstance, perhaps you would like to talk to the tenant, and see if they are willing to bypass the agent? If they insist on going through an agent, and you are keen to keep the tenant, appoint your aunt as the agent.

The tenant's agent supposedly has a share in any renewal. So, if you appoint your aunt, the task now is for your aunt to negotiate with the tenant's agent on the split of the commission.

[MMM]

MMM,

Something major slipped my mind.

I suppose your monthly rent is more than $2,500, right? No wonder the tenant insisted on going through the agent. The landlord pays for the commission for any rent that is more than $2,500. Hence, to the tenant, they don't incur any cost at all.

So, under this circumstance, perhaps you would like to talk to the tenant, and see if they are willing to bypass the agent? If they insist on going through an agent, and you are keen to keep the tenant, appoint your aunt as the agent.

The tenant's agent supposedly has a share in any renewal. So, if you appoint your aunt, the task now is for your aunt to negotiate with the tenant's agent on the split of the commission.

Yes, it's above $2500. Now that you mentioned I recall this rule when we were renting out. So if they insist on agent, then probably it's still best to get my aunt involved and they talk between themselves. Unless of course the agent is willing to do the work at 50% the supposed commission?

[qms]

Yes, it's above $2500. Now that you mentioned I recall this rule when we were renting out. So if they insist on agent, then probably it's still best to get my aunt involved and they talk between themselves. Unless of course the agent is willing to do the work at 50% the supposed commission?

Yes, looks like this is the way out.

Anyway, it was mentioned before that you could claim the commission against the rental income when you file for your income tax.

Good Luck!

[MMM]

Anyway, it was mentioned before that you could claim the commission against the rental income when you file for your income tax.

Good Luck!

But the financial impact of tax deduction is not as beneficial as eliminating agent fees.

Eg. 15% on 1.5k commission is $225. This is versus paying $1500 on the agent fee. Just an illustration.

[qms]

But the financial impact of tax deduction is not as beneficial as eliminating agent fees.

Eg. 15% on 1.5k commission is $225. This is versus paying $1500 on the agent fee. Just an illustration.

Well, that's life, right? You win some, you lose some.

Without this expenditure, you won't be able to get your unit rented out, and you won't be able to take in the rental income then.