The COVID-19 pandemic has disrupted nearly all aspects of life. This is especially true for those dealing with property matters, as the Circuit Breaker represents a significant obstacle to the real estate industry. As we are in temporary lockdown mode, property viewings are halted and supporting businesses, such as property agencies, are also harder to engage. However, it is not impossible to fulfil rental needs at this time. This article aims to provide simple tips that can help landlords secure leasing contracts with ease and maximise their returns.
Increase in Residential Rental Market
Interestingly, despite the Circuit Breaker, there appears to be increased demand for rental properties. For example, the number of rented units increased by 10.8% for private apartments 10.8% and by 15.4% in the HDB sector, as compared to the previous month.
The increase in demand may have been driven by the uncertainties that are brought about by the novel coronavirus. For example, many tenants may choose to stay put in their current properties instead of relocating to avoid any inconvenience that may arise from the Circuit Breaker. Furthermore, minimising movement will also decrease their chance of contracting the virus. Also, due to the sudden lockdown by the Malaysian government in March, many Malaysian workers may have opted to rent a property in Singapore because they were unable to return to their hometown for at least a month. Either way, this may actually be a good time to consider renting your property.
Tips for Landlords
Being a landlord can be tricky in good times, let alone during a global pandemic. In this section, we aim to provide useful information for those hoping to lease their property.
Establish Clear Communications
Bridging the gap between landlord and tenant with effective communication is essential for ensuring that both parties are clear about their expectations and deliverables. It is important to make sure to clearly list all terms and conditions in writing and ensure that the tenancy agreement captures all the necessary details. Additionally, it is important to verify all supporting documents. When in doubt, we recommend calling your agent or prospective tenant to clarify any details, before signing on the dotted line. Since you are unable to meet in person, it is important to be thorough during the application process.
You may also be heartened to learn that lease signings can happen remotely. According to the Council for Estate Agencies (CEA), digital signatures are deemed valid for executing property transaction documents such as tenancy agreements. This implies that there is no need for a physical meeting to sign on the agreement, all you need is the digitally signed documents to validate the authenticity of the contract.
Opt for Virtual Tours
Given that property viewings are an impossibility for most landlords and prospective tenants, you will need to get creative. We recommend leveraging technologies to facilitate viewings, meetings and communications. For this period, virtual or live-streamed viewings may have to suffice. To make the most of these "tours", it is important to make sure your property is organised, clean and well lit.
If a real-time virtual tour is too challenging to handle, it is best to take multiple, high resolution photos from different angles of the property, as well as to shoot a video with your smartphone while you walk through every corner of the premise. It is important to be as clear as possible because missing out on any details may just lead to disputes when the tenant moves in. To share these videos and photos, simply upload them on sharing platforms like Google Drive or Dropbox.
Tie Down Details Based on Circuit Breaker Guidelines
Even as the Circuit Breaker measures begin to ease off, property-related businesses are still likely to be restricted, this implies that it is still best to defer any physical move, in-personal take-over or handover until the Circuit Breaker period is over.
However, as stated in the Covid-19 (Temporary Measures) Act 2020, it is not illegal to make a house move at this time. Landlords can still proceed with the transaction but there are some precautions that they have to take. For example, if landlords need to conduct maintenance on the property before renting it out, ensure to keep these works to emergency household services, such as plumbing, electrical works, locksmiths, repair works pest control and fumigation that are classified as essential services. Non-urgent works should be deferred until this period is over. Also, it is prudent to advise your tenants who are hiring movers or transportation companies to assist in the move to obtain a permit from Covid-19 dedicated business site before the move. The assisting staff will also be required to wear gloves and masks and exercise the one-metre safe distancing guideline.
If you have an outstanding mortgage associated with your property, it is worth considering refinancing as a way to reduce your rental expenses. Doing so can save you hundreds of dollars in monthly mortgage payments and thousands of dollars over remaining years of your loan. If you're a candidate for home loan refinancing, just make sure to look into any fees associated with refinancing your existing loan or applying for a refinanced loan. In some cases, your current or future lender may impose fees that effectively reduce the value of refinancing in the first place.
Keep the Community Safe
It is not entirely impossible to lease a property at this time, there are just more precautionary measures that landlords need to adhere to and more planning required. It can be cumbersome to follow through with all the measures but the COVID-19 pandemic is no laughing matter, it has infected over 3.5 million people worldwide and the number is still growing. This is why we should all be doing our part to prevent its spread. Being willing to take the extra steps will help the community tremendously at this time. If possible, why not defer the transaction until after the Circuit Breaker period when everyone will have peace of mind and handle the logistics with a bit more ease.