Property Investment 101: It’s the tenant’s market. It’s also the buyer’s market.
I am desperate for tenant
If I have a home which I am not staying and yet I am paying, I would be desperately looking for a tenant to rent it from me. You see, every month that I could not rent it out, I would have to pay for it. If I could rent it out, even if I could not cover my monthly repayment, at least I do not have to bear the full repayment by myself. I am very sure there are homeowners who are in this situation.
I am desperate to find a home
If I do not find a place to stay, I would have to sleep under the bridge! If I sleep under the bridge, I am scared the water may swept me away! I do not want to sleep on the road because people may not see me and accidentally kicked me. I do not want to sleep in the public park because the grass will always be wet in the morning. I must quickly find a place to stay. No matter what the homeowner charges me, I will have to pay.
Which is more likely to happen?
Between the two desperate situations, which one is more likely to happen? Of course it is the one where the home owner is desperate for tenant. Right? Surely not many tenant would be so desperate that they are willing to pay any rental being asked by the homeowner. Just need to remember that on one side is someone who actually owns the unit and on the other side is someone who does not own any unit. Who would have the bargaining power in the long term? I did not say it’s the homeowner yeah. You decide yeah.
A foolish homeowner when I was younger
I wanted to rent out my apartment of 730 sq ft because I have started paying for my 1,258 sq ft condo. I could not afford to pay for two at the same time. Typical rental is RM550 per month at that time but I wanted to rent it out at RM650 because my unit was fully furnished. Everything a household should have, it is there in my apartment unit. Even the bed frames and built in cabinets etc. One potential couple came to view the unit and in front of the agent said to me. “You know your rental of RM650 is very high. I have seen so many units at just RM500 or RM550.”
I did not look at them, I look at the agent who brought them. “It’s best that you bring them to the cheapest unit yeah. Really no point to bring them to view my RM650 unit if they have viewed cheaper units earlier.” The agent smile sheepishly. The couple left and the very next day, the agent called and said they would like to negotiate to RM600 per month. I said, okay. RM600 then. Since I was SO DESPERATE.
I just like to point out this fact. Most homeowners would love to rent out their unit as soon as possible. However, there is a reason why the bank approved their home loan for the second unit yeah. It meant they could afford to pay for both units at the same time. There is really no need to ‘offend’ any homeowner so openly. They may prefer to rent out at the price you asked BUT they will rent to others and not you.
This is why no matter what happens a homeowner is known as a LANDLORD
By the way, a tenant can find a cheaper place. In a market where the supply is many and the demand is few, the tenants can demand. In fact they can move if the homeowner dares to increase their rental. For all the tenants who believe they have the upperhand, I think they are right. Especially in some places where the number of units on offer is too many. Especially just after the Covid-19 when people have yet to move back into major cities in big numbers.
Do try going into any malls today. Do try driving during peak hours today. Do try going to the KLIA today. Do try looking at the passengers in the LRTs today. Happy understanding and all the best in always getting low rentals forever and paying for it forever, no matter how low it may be. It just could not be free…
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