On the way home today, I talked with a Scottish friend who takes the same bus as me. We were talking a little about investing and financial stuff and he mentioned that he is currently renting out his home in Scotland.And when i asked him if his tenant was troublesome.. i.e the kind that complains about every single thing from a blown bulb to a dirty wall, he mentions that all of them are taken care of by his agent.
This got me thinking.. Does Singapore has a service that is similar to this?
The rough idea is that the agent takes a commission of say 10% a month from the monthly rental,and in return he takes care of any requests the tenant might have ( blown bulb, burst pipe etc). In addition, if the tenant defaults, the agent will have to pay up.
Also,the commission rates varies according to the house condition. A brand new house would require lower commission rate, as things are less likely to spoil, and hence the agent would not need to work much. On the other hand, a higher commission is required for an older house, because it is likely that the agent would have to fork out money to change bulbs, repair a leaking pipe etc.
In all, basically the landlord is purely an investor. Sitting back to collect rental income without worrying about implications that come from renting out their homes.
I find that this business opportunity is feasible because
- Usually if a person has a house to rent out, he would be rich enough to be busy with his own work and hence would be willing to pay a little for someone to settle the nitty gritty details of renting out an apartment. ( I mean would you want to wake up in the middle of the night to repair your tenant's busted pipe, when you have a meeting the next day?)
- If Singaporeans who are relocated overseas for say a year or so, they could engage such an agent 'to take care' of the house. This could range from answering all the complains from the tenant and even to sourcing for new tenants should the lease expire
Comments from anyone? Or if you interested to develop the idea further..feel free to drop me an email at ntuchartist@hotmail.com
4 comments:
I'm currently in Shanghai and also rented a house to staying. The commission is higher, but I think the service quality is extremely lousy. Housing agents are not easy also if you want to please both the landlord and the tenants.
Yes, this is also done in Australia.
I was also wondering why this is not happening in Singapore.
It is indeed hassle free for both tenant and landlord.
If you are interested, let's meet up and explore.. maybe we can start something like that in singapore :)
Hi I agree with you. There is a potential in this business. Currently agent only take their commission of about 1 moth to 2 moth worth of rental and that the end of the deal. No follow up or service after that. Its also a huge lump sum on the owner part to pay in one short and the tenant even need to put a heafty 2 months worth of rent as deposit. For a condo about $3k rent, it means the tenant need to fork out 2mths + 1mth = 3 mth rent of almost $9 to $10K just to move in. I think a monthly comission based might work if and make thinhs easier for the tenant.
Its really hard to own real estate at a distance.
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