3. Realistic Rental Rates
Realistic rental rates do not for a Rolex if he can afford it.
necessarily mean low rental rates.
Rather, it means giving perceived
And that is how you should
value.
be thinking about the rental price.
Would a potential tenant see your
What is the difference property and perceive your asking
between a Mercedes Benz E-Class price as reasonable?
and a Honda Accord? What is the
difference between a Louis Vuitton
In 2011 I visited a studio
and a Coach handbag? What’s the apartment in Damansara Perdana.
difference between a Rolex and a It blew me away. The renovation
Tissot?
was not expensive but the
apartment was classy, functional,
There
may
be
clear and cosy. You could tell that a
differences in quality, but this lot of thought had gone into this
difference in quality is not apartment. The owner’s asking
necessarily marked by an equal price was RM1,500. It was about
difference in price. The difference 10%-15% higher but I had no doubt
in price can be 100% to over it was worth it.
1,000%. Yet, people are willing to
pay this huge difference for the
I think everyone who saw it
brand.
thought the same. This apartment
has no occupancy problems. I’ve
This is because consumers also never seen it advertised in
perceive the brand to be worth the any of the online property portals.
price. So, while John can tell the This owner is getting a hot supply
time just fine with his Tissot, he of leads and does not even need to
would be happy to pay RM30,000 advertise!
Then
I
have
visited
apartments that barely impress
but have significantly higher price
tags than the average. Needless to
say, these apartments are vacant
longer than usual.
You do not necessarily have
to put inexpensive furniture or
make your property look like a
page out of the Malaysian Tatler.
You just need to be realistic.
I know a very savvy
property investor who owns
several properties. His rental
rates are 10% below the market
average. He does not try to make
his apartments very beautiful but
because he exceeds the perceived
value with his asking price, his
occupancy rate is very higher.
To him, keeping a tenant
long-term
and
increasing
occupancy to nearly 100% saves
him more than 10%. He is therefore
happy to lower his rental rate.
4. A Manageable Number Of RENs With Good Track Records
Real Estate Negotiators (RENs) reducing the price to secure the
are perhaps your most important same pool of leads.
partners in the business of finding
tenants.
A better approach is to have
5-10 RENs with solid track records
A good REN will have for your type of properties.
a strong network of clients Interview the REN you would
(corporate
and
individual), like to appoint. Ask her about her
advertises her listings frequently client base, ask her for the number
and consistently, is specialized in a
particular area or genre and has a
good soft skills.
of properties she has let out in the
last 12 months, ask to see some of
her advertised listings and observe
her soft skills.
Having
a
manageable
number of RENs with solid track
records by your side is akin to
having the Dream Team play
basketball for you.
The biggest mistake you
can make is to appoint 50 random
agents to rent out your property.
More so in the high-end market.
You will find yourself wasting a lot
of time dealing with unqualified
leads and too many distractions.
You could inadvertently also create
a price war as RENs advertise on
the same channels.
50
marketing
RENs
with
little
skills will end up
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