To renegotiate rent or move?

[Dert42]

When we moved to Singapore in in 2013, we only had a few days to househunt. We found a good place, but kind of got put over the barrel on the price because we were kind of desperate.

Now the rental market is down, we're settled in and are on better footing to negotiate. We're coming up to the end of our 2 year contract. We're paying too much for not great finishes. To avoid the hassel of moving, we're ok to stay where we are, but the price needs to come down by $300-$500 a month. Otherwise we can get as good if not better for around the same price. I'm willing to walk away(and we may anyway) to get closer to kid's school and the ridiculous bus service.

Questions:
1. Our contract is up in July. We already started looking, but it's unrealistic we would lock down a place this far out. How do I start the dialog with the landlord about lowering rent? I have a feeling an ultimatum approach will not work at all. Are we too early?
2. We're paying 4300, a similiar, newely renovated unit in our building is on . for $4400(and I'm guessing they'll settle for less). Our unit doesn't have major stuff wrong with it, but it's showing it's 14 year life. Does an offer of $3800 sound reasonable? Is that consistent with the market drop?
3. Anything I'm not thinking of? I heard moving costs should be around 2k. Is that realistic?

[x9200]

When we moved to Singapore in in 2013, we only had a few days to househunt. We found a good place, but kind of got put over the barrel on the price because we were kind of desperate.

Now the rental market is down, we're settled in and are on better footing to negotiate. We're coming up to the end of our 2 year contract. We're paying too much for not great finishes. To avoid the hassel of moving, we're ok to stay where we are, but the price needs to come down by $300-$500 a month. Otherwise we can get as good if not better for around the same price. I'm willing to walk away(and we may anyway) to get closer to kid's school and the ridiculous bus service.

Questions:
1. Our contract is up in July. We already started looking, but it's unrealistic we would lock down a place this far out. How do I start the dialog with the landlord about lowering rent? I have a feeling an ultimatum approach will not work at all. Are we too early?

We always did it 1.5-2 months before the end of the contract typically securing the new place (signed TA) 4-2 weeks before the end of the current lease. Of this, 4-3 weeks was for finding the place and ~2 weeks for wrapping everything up.

Talk with your LL not about lowering the rent but extending/renewing the contract. The question about the rent will come up out of this naturally. Just after initial verbal confirmation (to have him willing to be extended), ask him how much he thinks the rent should be as the market is this and that comparing to 2y back.

Out of these negotiations, expect to have it a bit more expensive than the market value - the LL knows hardly anybody wants to move unless has a good reason. If the case, try to make him to improve something in the apartment (refresh the walls, replace some old equipment etc.)

2. We're paying 4300, a similar, newely renovated unit in our building is on . for $4400(and I'm guessing they'll settle for less). Our unit doesn't have major stuff wrong with it, but it's showing it's 14 year life. Does an offer of $3800 sound reasonable? Is that consistent with the market drop?

IMHO the condition of the unit does not matter as much as its size and the location of the condo, unless your current place is a total disaster. I would aim around 4k but surely you may want to start from 3k8.

3. Anything I'm not thinking of? I heard moving costs should be around 2k. Is that realistic?

It really depends how much stuff you need to move. It could be more than 2k or less than 1k for the mid-priced companies (e.g. Shalom). 2k is definitely not unrealistic.

[Brah]

LLs come in all shapes and sizes regarding knowledge about current prices and how kiasu they are about accepting that.

If I were you I would have a very strong Plan B and Plan C at the ready and use that information to guide your negotiation. You will have to negotiate. Know your position, and be ready to exercise your options.

One has to wonder if the cost next round is going to be this much less cheaper than this round, so the longer one waits to get the lower market price you will always be 2 years away from to getting closer to it.

We were in a similar situation in a similar place and we negotiated down, but then again were were already below market for our place. But I won't say more on that as I prefer to keep this anonymous and private.

Another tactic is to get a 1-year lease and take your chances to go through this again next time and try negotiating down again. "Tactic" sounds bad but it is nevertheless a tactic.

[JR8]

I'd like to come back to this question later this pm when I have time, so this is just a place-holder for now.

First off though:
Research what the market has done in your area, and to the extent you can in your block.
What's listed now? With a say 6 month window, on a larger block, you can cross-ref asking rents (ads), to eventual agreed rents via URA.gov.sg. Gives a good idea of supply/demand pressures.
Check if your TA has any mention of 'Option to extend at prevailing market rent', and so on.

IME you get a good gut-feel if the LL will extend on reasonable terms very quickly. If there is a sense of 'captive-market/let's really nail him with a rent review', then you might as well just move.

[x9200]

It more dpends on the LL himself than any other rational, quantitative factor. I had a LL once who, on my argument that the market price is like this (he wanted more) he responded that yes, he knew this, but he thoght the price he proposed was just more fair because I saved some money not moving out.

[JR8]

It more dpends on the LL himself than any other rational, quantitative factor. I had a LL once who, on my argument that the market price is like this (he wanted more) he responded that yes, he knew this, but he thoght the price he proposed was just more fair because I saved some money not moving out.

Typical local LL logic; conveniently only considers the one advantageous side, i.e. his own.

You not moving out saved him:
- A void.
- The hassle and cost of of a new tenant, paperwork etc.
- Having to make good the Wear+Tear that is required usually only after a tenant departs, prior to a re-let.
- and then caused him to have to face the unknown of a new tenant.

IME a good tenant is considered 'a bird in the hand' (i.e. as the saying goes, 'A bird in the hand is worth more than two in the bush' - something to value and nurture). Keeping a responsible and reliable tenant in place really pays dividends, financially and for an easy LLs life. Doesn't matter if you go so far as stopping any upwards rent reviews after say three years, it still easily pays for itself in the overall picture. I had one tenant stay 10+ years with that scenario, almost unheard of in London. It worked handsomely for us both!