It’s a people business
In evaluating whether you are landlord material, remember this: While you shouldn’t need to constantly be on the watch, you shouldn’t be twiddling your fingers, waiting for the money to come in. Landlords need to find time to keep in touch with their tenants. “This is a people business where you must build rapport with your tenants. One must like working with people to become a good landlord,” says Leong.“My current stable of tenants includes students, expatriates, McDonald’s, Tai Thong Restaurant, Secret Recipe and Angel Cake House. I support them in whatever way I can, such as giving business to them,” she says. “You see, building rapport and acting promptly on problems are the keys to managing tenants well.”Chong finds the problem of collecting rent from the lower income tenants manageable. “Only about 5% to 10% of my tenants may be late in paying,” he says. “It is important to visit them immediately after payday.”“In order to minimise problems in collecting rent, from the onset, you must be firm about your rules, and then build a rapport with your tenant along the way,” says Lee of middle-income tenants. “Send them gifts during festive seasons and be responsive to problems. Sometimes, I prefer to collect the payment personally to remain visible to them. Check the utility bills frequently to ensure your tenants are settling them promptly. Remind them immediately if any bill is overdue.”For high-end units, Tan of Eng Lian says, “We have some expatriates, particularly the younger ones, who do not take the trouble of handing over units in good condition. So, it is absolutely vital to be diligent in checking the inventory listing when the tenants move out and deduct all repair costs from the deposit.”If you lack the time, you can engage someone to handle the work. “It is advisable to engage somebody to help you manage if you have more than 20 properties because it can be very time-consuming,” says Leong, who employs two full-time staff to manage her tenants. “The fee to the property manager would be 9% to 10% of the rent collected for low-end properties and 7% to 8% for highend properties.“In addition to this, you must have a team of people to help you such as lawyers, property appraisers, agents, insurance companies and handymen.”This article first appeared in Personal Money, a monthly publication of The Edge.
(The Sun 22-3-2008)
