We’re not greedy, we’ve been ‘subsidising’ tenants with low rates since 2003, they say
RETIRED doctor S.M. Soon, 62, is one happy landlord.
She collects $16,000 a month from her tenant at Emerald Hill, which means she doesn’t have to use her own funds to top up her monthly mortgage payments.
But things weren’t always so rosy.
From 2002 to last year, the monthly rent from her 5,000 sq ft Peranakan house was $12,000, and she was coughing up $4,000 every month to service the loan and pay for maintenance.
‘Prices are just returning to what they were 10 years ago. For us landlords, it’s not always Sunday,’ said Dr Soon.
Tenants have been crying foul over soaring rents which have shot up by 31.2 per cent over the past year.
Last week, The Sunday Times featured a family whose rent rose from $2,400 to $7,200 when the lease ended this year.
In the end, the family had to move from Jervois Road near the city to the East Coast area, and still pay rent that is twice as much.
But landlords are also keen to debunk their greedy image.
In a letter to The Straits Times’ Forum page last week, Madam Yeo Boon Eng pointed out that expatriates had been enjoying extremely low rents since 2003 and owners were ‘subsidising’ tenants before the increase in rents.
She is now charging her tenant $2,100 for a corner terrace house in Yio Chu Kang, up from $1,600 last year.
She said her tenants did not complain or bargain. But if they did, she would have stood her ground and they would have had to look elsewhere.Nine of the 12 landlords who spoke to The Sunday Times said they, too, collected very low rents in the past few years.
The higher prices are not arbitrary, they argued. They simply reflect property prices now and are a function of demand.
It is only recently that landlords are seeing returns on their investments, with rental yields exceeding monthly instalments.
Said Dr Soon: ‘It’s not a matter of raising prices because we’re greedy. We get whatever the property will fetch in the market.
‘I wouldn’t dare ask for $16,000 if the market rent is $10,000.’
Retired lecturer H. Chu, 65, who is renting out three properties in Holland Grove View, Binjai Crescent and Eastwood, said: ‘Landlords are not unreasonable. It’s just that there are too many people at this time who want a place.’
He didn’t even have to raise the rent on his Binjai Crescent bungalow; the tenant offered him $8,500 this year, instead of the $5,600 he was paying.
‘He knows the market,’ he said.
Property agent Andrew Tan, 51, agrees. The only landlords he would call greedy are those with ‘moving targets’.
This year alone, he has dealt with five landlords who kept upping their prices even after letters of intent had been signed by prospective tenants. Among the landlords contacted by The Sunday Times, none admitted to doing this. Most said they try to keep their existing tenants.
Said Dr Soon: ‘It makes sense to keep a good tenant, instead of waiting another month for another tenant to come along and paying commission fees to the agent.’
She said she charged her existing tenant $16,000 when she could have put her property on the market for $20,000.
But no matter how much of a ‘discount’ existing tenants get, they are bound to be unhappy about the sudden rent hikes. And landlords are peeved by the attention the more vociferous tenants get.
‘When tenants were enjoying low rents, nobody thought about the landlord. It’s not that prices have gone up drastically. It’s that, in the first place, they went down so much,” said housewife V. Wong, who is in her 50s.
Her 1,800 sq ft apartment at Central Green in Tiong Bahru used to fetch $4,300, which meant she had to chip in about $800 to meet the mortgage payments and taxes. Now she rents it out at $6,800.
Ultimately, the sums have to add up.
Said landlord Ms Y. Tan, an accountant who is in her 60s: ‘Who wants to charge low rents? We’re not running a charity.’
Ups and downs
‘When tenants were enjoying low rents, nobody thought about the landlord. It’s not that prices have drastically gone up. It’s that, in the first place, they went down so much.’
HOUSEWIFE V. WONG, on why tenants are unhappy about the sudden rent hikes
Source: The Sunday Times 23 Sept 07