I had my first tenant since 2002. For more than five years, I was renting out four condominium units at the same time. Over the years, like any multiple-property landlord, I signed tenancy agreements with dozens of tenants on both company and individual leases. I had tenants who were Japanese, Koreans, Europeans, Americans, Indians and Singaporeans.
Similarly, I encountered problems and issues like any other landlord, including bad tenants, dishonest agents, low rental, frequent repairs, late payment, etc. After being an owner in Singapore for longer than a decade, I thought I could call myself an experienced one.
Well, not until I attended the Smart Landlords vs Smart Tenants Education Seminar with 140 participants last Saturday.
You mean I will be taxed?
Between 2002 and 2004, I was snapping up properties in a buyer’s market, completely unaware of all the tax implications. I always think that capital gain tax charged by IRAS only goes after companies, property traders or speculators who flip, sub-sale, buy frequently or buy in bulk.
The first speaker Leung Yew Kwong, Principal Tax Consultant of KPMG Services, proved me wrong: Whether your gain/loss is taxable/deductible depends on your intention at the time of purchase.
Unless one buys a property and never sells, when an owner sells a property, it is difficult to tell whether the property was originally bought for re-sell or for long-term investment. There is only a thin line dividing the two and the IRAS guidelines are vague. That is why it is critical to document your intention during your purchase as the proof of evidence.
Mr Leung also quoted a few interesting court cases to illustrate under what circumstances that owners were taxed on their profits after selling their properties. Getting the clues from these old cases, I have learned what to look out for when buying or selling my next property in order to be exempted or partly-exempted from being taxed on gains.
Looking for good budget tenants in a bad market
Deborah Law, Executive Director of Expat Realtor, showed some miserable figures on the current rental market. With the decline in population growth and massive housing supply, non-landed rental prices drop 4.5 percent in the second quarter. Private property vacancy rate increases to 7.1 percent and is expected to reach 10 percent by the end of this year – that is over 30,000 units left vacant in the market!
With an increasingly competitive rental market and stronger negotiating power from tenants, to keep your property occupied and rented at a good rate, your place must be well-located and well-maintained.
Deborah also shared many leasing tips for landlords, and above all, for landlords looking for expatriate tenants.
Number one tip: Give them that home feeling that they are looking for.
Too often we see Singapore owners decorating their properties with local taste. But if you have visited a foreigner’s home in western countries, you will understand exactly why they often ask for WiFi, cable TV, dishwashers, hot water running in kitchens and washing machines. They also look for sunlight, open space and low floors (forget about fighting with other homebuyers and paying top dollar for a high floor or penthouse unit).
Love what you are doing
I always admire people who start a business to make this world a better place. I was honored to see at least three in this seminar:
1. Roomies.Asia was started to help fellow tenants who are looking to rent a room in Singapore. The website helps tenants and owners to find a match directly without the need to go through a middleman. And best of all, everyone can use the site for free!
2. In the past, furniture rental is only available for expatriate homes in the upscale rental market. Singapore Furniture Rental wanted to give ordinary owners and tenants an affordable option to rent good quality furniture and decorate their place more cost-effectively for a short-term lease.
3. The founder of Kluje.com had bad experiences with contractors in Singapore and wanted to protect other homeowners from falling into the same traps. Kluje ensures that all the contractors signed up with them are credible and takes the hassle to vet through every proposal and comment from homeowners.
When the teams came early in the morning to do setup for their booth, they were all in high spirits. While busy attending to participants, everyone could easily feel their high energy and great enthusiasm.
Lesson learned: To enjoy your work, invest time in your passion and you will always love what you are doing.
Leaning back on my seat, I was secretly thankful that I didn’t volunteer to give a speech sharing my trivial experience of being a landlord, without trying too hard to sound smart.
Aristotle said “The more you know, the more you know you don’t know”. I am really grateful that the speakers let me know what I don’t know.
I got my ‘aha!’ moments many times during the presentations when I nodded with agreement through that common sharing of wisdom and realization. I am grateful that I hear from these experts at this stage of my property investment journey. If this happened much earlier, I wouldn’t have been able to understand all their valuable advice – not before I had my fair share of mistakes and oversights and learned my lessons through trial and error.
You can see more photos of the seminar in the facebook.
This is the last education seminar from Property Club Singapore. See you again next year at the Buying My First Private Property 1-Day Workshop, and the Buy, Fix and Profit from Old Houses/Apartments Strategy Sharing Talk.
Hi PS, thanks for the article. Was doing my “personal summary” after attending the seminar and your article was a very succinct overview of the day’s learning points 🙂
The pleasure is all mine : )
Hi PS, thanks for the article. Was doing my “personal summary” after attending the seminar and your article was a very succinct overview of the day’s learning points 🙂
The pleasure is all mine : )