Standard Deposit for a 2 year rental?

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Brenstar
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Standard Deposit for a 2 year rental?

Post by Brenstar » Mon, 09 Nov 2009 7:00 pm

My partner and I are currently looking for apartments. We have put in an offer on two and have been asked for 1 months rent for a deposit and 2 months rent when the lease is finalized, for a total of 3 months rent. After talking to a few co-workers though we hear that 2 months rent for deposit isn't standard the norm is 1. We are working with a reputable relocation company so we're not worried about being scammed just curious?

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Saint
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Post by Saint » Mon, 09 Nov 2009 7:06 pm

It's quite standard that you have to pay 1 months deposit for each year of lease, so if you sign a 2 year you pay 2 months deposit and 1 month rent in advance. Which always makes me wonder why anyone would want to sign a 2 years lease in the first place. I always insist and will only sign a one year lease.

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Post by Brenstar » Mon, 09 Nov 2009 7:20 pm

Well we were told that landlords are reluctant to sign anything less. We were also told that if we signed anything less than 2 years we would be responsible for paying our brokers fee as the listing agent will no longer co-broke their fee with our rep.

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jpatokal
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Post by jpatokal » Mon, 09 Nov 2009 9:11 pm

Brenstar wrote:Well we were told that landlords are reluctant to sign anything less.
Bullshit. 1 year with option to extend 1 year is standard.
We were also told that if we signed anything less than 2 years we would be responsible for paying our brokers fee as the listing agent will no longer co-broke their fee with our rep.
Again, bullshit. Find a new agent :x
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ksl
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Post by ksl » Mon, 09 Nov 2009 9:23 pm

Got to agree with JP! 1 year lease or nothing! Once they get a hold of your cash deposits, you will have hell of a job to get it all back! There are pro's and cons, because the rent could increase, but i suspect they are screwing you on the rent anyway, and want to lock you in on a 2 year contract.

There is a link on the forum , that gives you an idea of fair rental price
read this thread!

http://forum.singaporeexpats.com/ftopic64695.html

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Post by BooneC » Mon, 09 Nov 2009 9:36 pm

Interesting. My experience is different. Many owners are reluctant to accept 1+1 leases because of the potential effort, time and opportunity costs of changing tenants every year.

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Post by Strong Eagle » Mon, 09 Nov 2009 10:18 pm

My landlord has done 2 year leases with only a standard 1 month deposit... but I think next time I might want the flexibility of 1 year. First two year lease expired in the middle of the price rise... got screwed, relatively speaking. Second 2 year up in 6 months... I might have got a better deal this year instead of next.

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Post by ksl » Mon, 09 Nov 2009 10:48 pm

BooneC wrote:Interesting. My experience is different. Many owners are reluctant to accept 1+1 leases because of the potential effort, time and opportunity costs of changing tenants every year.
Think about it, there is very little time or effort involved! It's an empty apartment in a supply and demand market, the more demand, the more they will try to screw you into a longer contract at a high rent. Less demand and they will be dropping the rent and doing contracts to how you want it, but will only offer 1 year in case the property rentals move up...so its all about the rental price at the start, and how you can negotiate to your favour.

High demand, more difficult to swing it your way, but never give 2 months deposit on a two year lease, that's mostly money down the drain.
The amounts are significant, come the end of contract the landlord may say sorry i don't have your deposit, just now, and you have to be on that plane within 10 days. No way will you see your deposits.

There are some good agents, but finding them is a nightmare, and then they can do nothing if the Landlord keeps the deposits. Agents here are basically freelancers and have no real legal obligations to tenants, the agents have to pay there own advertising and marketing of their services they are mostly individuals on self employed basis and looking out only for themselves.

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ProvenPracticalFlexible
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Post by ProvenPracticalFlexible » Tue, 10 Nov 2009 10:09 am

Saint wrote:It's quite standard that you have to pay 1 months deposit for each year of lease, so if you sign a 2 year you pay 2 months deposit and 1 month rent in advance. Which always makes me wonder why anyone would want to sign a 2 years lease in the first place. I always insist and will only sign a one year lease.
I see the benefit of 2 years lease is that you got fixed rent for 2 years. Of course if you signed during the peak times that is not so much of a benefit, but it can be. If you renewing there is no guarantees of how much the rent can be raised.

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Post by ProvenPracticalFlexible » Tue, 10 Nov 2009 10:14 am

Strong Eagle wrote:My landlord has done 2 year leases with only a standard 1 month deposit... but I think next time I might want the flexibility of 1 year. First two year lease expired in the middle of the price rise... got screwed, relatively speaking. Second 2 year up in 6 months... I might have got a better deal this year instead of next.
If you stayed for some time your negotiating power gets stronger.

After my first 2 year contract, we got a 6m + 6m and when that run out we only renewed for 4 months, as we were in a middle of purchasing our own place but need some time before we can move in. On the other hand the 2 months deposit is still in with the landlord.

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Post by Saint » Tue, 10 Nov 2009 10:27 am

ProvenPracticalFlexible wrote:
Saint wrote:It's quite standard that you have to pay 1 months deposit for each year of lease, so if you sign a 2 year you pay 2 months deposit and 1 month rent in advance. Which always makes me wonder why anyone would want to sign a 2 years lease in the first place. I always insist and will only sign a one year lease.
I see the benefit of 2 years lease is that you got fixed rent for 2 years. Of course if you signed during the peak times that is not so much of a benefit, but it can be. If you renewing there is no guarantees of how much the rent can be raised.
Swings and roundabouts, I renewed my lease a couple of months ago with a 15% decrease. My main reason for not signing a 2 year lease is, as young Ksl, mentioned above, I wouldn't want to give a landlord a large wad of cash with no way of knowing that it wont be spent on 4D and you will get little if any of your deposit back.

I'm lucky that I have a very good agent and landlord, but I didn't know them from Adam when I first viewed the place.

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