Date: October 27, 2014
Venue: A condominium unit in Orchard with home staging in progress
Interviewee: Kelvin Yeo, General Manager, Singapore Furniture Rental
PS = Property Soul
Kelvin = Kelvin Yeo
PS: The rental and property price indexes of private residential properties have been on the decline since the second half of 2013. There are four to five thousand completed private residential units added to the market every quarter. Facing intense competition from fellow owners and lower rental return, how can owners lure good buyers and tenants in the current market?
Kelvin: The more stagnant the market, the more aggressive you should be in your marketing efforts. The ability to grab the attention of your target customers is very important. Professionally-taken photos or videos that offer a 360-degree virtual tour of the property can definitely draw eyeballs and prompt interested parties to arrange for viewings.
Go the extra mile to make viewings more homelike: place fresh flowers or fruits on the dining table; play soft music in the background; offer drinks for potential buyer or tenant; or invite them to rest on the sofa making them feel comfortable. You are more likely to close the deal when they are emotionally attracted to the place.
PS: I know that your company deals with owners, tenants and agents every day. Tell us why some properties can be sold or leased in a matter of weeks, while others are left in the market for longer than a year.
Kelvin: It is all about expectations. There is often a mismatch of expectations between landlords and tenants, and between sellers and buyers. Owners and landlords have to be realistic in setting their asking price.
A newly-listed property has the highest chance to secure the best offer in their first ten days in the market. Afterwards, it will slowly be obsolete and become just another relisted property that many have seen before. The owner often ends up having to settle for a lower offer.
Besides the physical aspects of the project (including the location, age, maintenance and tenant profile), the emotional appeal of the property is also a critical factor. A nice view, neutral colour tone, warm room lighting, newly-polished flooring and good quality curtains can easily arouse the emotions of your target audience. With buyers and tenants spoiled for choice these days, this is an effective way to trigger that buy or rent decision instantly.
PS: What are the immediate turn-offs for potential buyers and tenants during flat or house viewings?
Kelvin: Many owners haven’t paid a visit to their property for long and have no idea about the conditions of their place.
First impression counts. Make sure that there is no untidy room, old kitchen or dirty toilet. Get rid of that musty or foul smell. It is a big turn-off for a new owner or tenant to imagine fixing or cleaning unpleasant things left over by the predecessor. And yes, get rid of those uninvited guests like cockroaches or ants!
PS: How to create that sense of ‘wow’ when prospective buyers or tenants step into your property?
Kelvin: Adding that wow experience is exactly what we are doing in every home staging (furnishing and decorating a property before selling/renting) assignment. One of the tips is to make the place smell pleasant by placing some scented candles.
One of our clients whom we served had a listing at Fifth Avenue but was not able to get a tenant despite over 20 viewings. We home staged the unit with furniture and accessories like carpets and cushions, creating that wow factor to potential tenants. Within two weeks, the unit was rented out.
Another real-life example: a 3-room HDB flat was unable to find a buyer for six months. After we did the home staging, within three weeks it was sold at a price higher than any previous offer. It was very worth it since the expense to rent our furniture for a month is only $300!
PS: For a rental property, how to evaluate the options of buying versus renting furniture and appliances?
Kelvin: For landlords, they face the hassle of sourcing the right stuff, arranging deliveries, dealing with tenants’ early termination, and handling totally different requests from the new tenant. Landlords often end up wasting their time and money.
Reasonably-good quality furniture and appliances for a flat can easily come up to $5,000. With gross rental yield in Singapore dropping to a miserable 2 to 3 percent, renting furniture is a better option to lower initial capital outlay and improve cashflow.
For tenants, if they are signing for a short-term rental, it is not justified to buy everything new and dispose after one or two years. Unless they are planning to stay in the same place for a few years, it is more flexible and cost-effective to rent rather than buy.
PS: How do you see the changes in the furniture rental market in Singapore in the next few years?
Kelvin: We are seeing a higher demand of furniture rental and home staging services in Singapore.
In the past, furniture rental only targeted expatriates with handsome relocation packages. After the financial crisis, housing allowances are less generous. In fact, many are paying rent from their own pocket. With a tighter budget, tenants might find it more cost-effective by renting rather than buying furniture for an unfurnished unit.
On the other hand, owners are facing less import of foreigners and stronger rental competition. For either selling or leasing, their objective is to shorten the vacancy period and improve the cashflow of their investment. After the TOP of a new condominium, the first batch of owners who manage to sell or lease their units often secure the best offers and the best tenants. In this case, home staging service can help owners to list their unit in the market much faster than the competition.
Find out more about home staging and furniture rental from the Singapore Furniture Rental booth at the Smart Landlords vs Smart Tenants Education Seminar this Saturday.
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