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Landlord guide: How to attract tenants when renting out your unit in 2023



Anyone in touch with Singapore's news would have heard that rentals went crazy in 2021 - 2022. After growing over 10% in 2021, overall rents further increased by almost 30% in 2022 (Today Online).


Will it ever stop? That's the question many tenants wonder.


As construction recovers post-COVID, National Development Minister Desmond Lee projected about 40,000 residential units to be completed in 2023 (The Straits Times). This could mean that days of insane rentals being snapped up almost instantly might soon be over.


With more HDB rooms and private residential units available for lease, landlords (especially those in a newly TOP project) should begin rethinking their rental strategies in 2023.


As a landlord, the highest recurring cost to worry about is not furniture, repairs, taxes, or even agency fees. The highest cost to worry about is in fact - vacancy cost.


This refers to the rental income that is lost while your unit is unoccupied. While it is natural to have periods of unoccupancy, the goal as a landlord is similar to a hotel owner - to minimize vacancy period where no revenue is earned.


So how then, do you minimize that vacancy cost?


That's right - by attracting more tenants!


If you're a landlord, here are some tips to help you attract more (and the right) tenants to reduce your vacancy cost.


 

1. Identify your target tenant profile

First of all, know your audience.


Depending on your location and unit type, you're likely to attract a specific tenant pool. Knowing who would most likely rent your unit can affect your subsequent decisions. How you furnish your unit (or whether you should) and how you market your unit will be dependent on this.


For example, areas like Raffles Place, River Valley, or even East Coast tend to be popular with foreign expats, while the heartlands in the outskirts of Singapore would be favoured by locals or those working nearby. While there will always be exceptions to the case, knowing your ideal audience will allow you to best cater your unit to them.


 

2. Know your competition - to determine the right price


With the convenience of the Internet today, tenants looking at your unit will always compare with other similar units. Research what your neighbours and those in the surrounding are asking for on sites like PropertyGuru or 99.co, in order to determine the right price. Don't forget to compare less obvious factors include layout, facing, and condition - to see where your unit stands.


What happens if there aren't similar units for rent?

Find the closest comparison. This could be further down the street, in the neighbouring estate, or even with a larger/smaller unit.


Another good indicator could be recent rental transactions within the area. However we've found that rental data tend to be less available/updated, so take them with a pinch of salt.


It won't always be easy to find a good reference point, and it can take experience and knowledge of the current market to do so. Remember - just because your neighbours are asking for unreasonable prices doesn't mean setting a slightly lower price would get you a tenant immediately. Tenants can always look at other listings beyond your neighbourhood and will compare it with yours.


Eventually it will be an evaluation of the best price vs the vacancy cost. Sometimes it might be worthwhile to be patient and wait for the right tenant, while other times better returns might come from a lower offer!


 

3. Be open to flexibility in your lease terms


Don't you wish to find that perfect tenant who doesn't spend much time at home, doesn't cook, smoke, have pets and is willing to take a long lease?


Well, we all do.


Sadly the perfect tenant doesn't appear all the time. Having some flexibility opens up your pool of available tenants, some of which might even be willing to pay a higher rent! Some terms that can attract a higher rent include allowing shorter leases, allowing pets, or even allowing sub-leasing.


Naturally some landlords squirm at this (you might already have!), as it comes with increased risk and hassle in future. The key is to have necessary safeguards to mitigate those risks. Perhaps asking for a higher security deposit, having a mandatory regular cleaning service, or regular checks.


With that said, check in with your own appetite before accepting that risk! After all, earning less and having less hassle isn't the worst option.


 

4. Package your product well


Think of your unit as a product. How do you make this product more attractive to the right consumers (tenants)?


First consider the furnishing. Remember what we discussed about identifying your audience? Foreign expats who are new to the country tend to require more furnishing as compared to a local who might have their own furniture. So plan your furnishing based on your audience, and stick to the main necessities if you're unsure.


Things like lighting, curtains, and bed frames would be top priority as most tenants would likely not carry their own from place to place. Many tenants will also require white goods like washing machine, refrigerator, and stove - so these will likely be mandatories. Other items like couch, dining table and chairs, or even television are added bonus that can potentially make a difference, but aren't always fully appreciated.


Beyond the furnishing, the design style of the home can also make a difference. A general rule of thumb would be to keep it timeless and classic, especially if you're unsure of your audience's preferred style.


Having an industrial or farmhouse style can certainly make your unit stand out, but it will definitely repel those preferring a more conservative design. Contemporary and modern styles are the safest bets, as their neutral colour palettes and styles tend to appeal to the majority for a longer period of time. There are plenty of articles online to help you learn more about timeless home designs.


Lastly, consider including value-added services such as cleaning services, wifi, and utility, where appropriate. Especially if you're renting out rooms to individual tenants, such value-added services will make a difference! However this might be less suitable when renting out an entire unit due to the hassle of coordination, so make the right judgement!


 

5. Your marketing matters!


After all the effort you've put into your unit, don't skim on the crucial last step - the marketing! This final piece of the puzzle is something often overlooked by landlords who are renting their units on their own. Don't ignore this blindspot as it essentially affects who will learn about your listing, how many of them will learn about it, and what profile of tenants you'll attract.


Yes, some units can have high demand no matter how you market. Those that are asking for low rent, in low supply, or perhaps a very unique property can get away with it when the market is good. But more often than not, your unit will face several competitors. The difference between a tenant checking out your listing or your competitors' could just lie in the marketing.


Very often, landlords (and even owners) might mistake having more agents as having better marketing. After all if one agent does a good job, having five others means a great job, right? Wrong!! Don't mistake quantity for quality.


Think about it, if all the agents are putting in the same level of marketing effort and having presence in the same channels, what you will encounter is not greater presence, but merely a duplication of the same effort. That's not to say that having one agent is always the best - definitely not when the single agent is only doing the bare minimum, which is often simply posting your listing online.


At the minimal, please ensure you have good quality photos, clear information about the unit, and marketing presence on all the top property platforms.


 

Eventually after you attract more potential tenants, you'll be able to shortlist and compare the prospective tenants to find the most suitable one(s) for you.


And there you have it, five points to help you stand out from your competition and attract more tenants to your rental unit.


Of course, it is easier said than done (being a landlord is never 100% passive), so you'd have to still roll up your sleeves a little before the tenants arrive.


Good luck!


If you're still unsure or are looking for help in renting out your unit, simply click the button bellow to contact us and share your situation!









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