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> Is there a rental reduction trend going on now ?, Your input, personal experience and comm

tmc
post Jan 12 2019, 02:41 PM, updated 3 months ago

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My tenant left my unit and now I have been looking for a tenant, but agent thinks my asking price need to drop rm200 to be comparable with market. I am keeping the same rate but coming to two month over, cannot find a tenant.

Is there a rental rate drop going on ?
trust4you
post Jan 12 2019, 02:42 PM

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QUOTE(tmc @ Jan 12 2019, 02:41 PM)
My tenant left my unit and now I have been looking for a tenant, but agent thinks my asking price need to drop rm200 to be comparable with market. I am keeping the same rate but coming to two month over, cannot find a tenant.

Is there a rental rate drop going on ?
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where is ur property location?
AskarPerang
post Jan 12 2019, 02:46 PM

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QUOTE(tmc @ Jan 12 2019, 02:41 PM)
My tenant left my unit and now I have been looking for a tenant, but agent thinks my asking price need to drop rm200 to be comparable with market. I am keeping the same rate but coming to two month over, cannot find a tenant.

Is there a rental rate drop going on ?
*
Normal at today situation when supply > demand.
Especially when got newer supply completed offering the same rental package. Of course people will move on and rent from the newer unit.
For slightly old place will have to adjust the rental to remain competitive.

Here an example: https://forum.lowyat.net/index.php?showtopi...post&p=89989592

QUOTE
My tenant move out to a another condo same building for RM900 a month cause it aircon and kitchen cabinet. I rented out at 1.2k.


AgentVIDIC
post Jan 12 2019, 08:02 PM

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definitely lo TS, nowadays is buyer market, too many units to choose from.
nexona88
post Jan 12 2019, 08:34 PM

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I have bad news..
Yes... Nowadays tenants have choice...
Very much oversupply situations....

Try to survey around... See what the pricing.. Try to match or lower like rm100... I'm sure u can get tenants...
icemanfx
post Jan 12 2019, 08:36 PM

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For every month the unit is left vacant is equivalent to 8.3% shortfall of yearly rental income. It is better better to drop 10% than leave it vacant for 2 months.

Babizz
post Jan 12 2019, 08:44 PM

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normal everywhere. even in prime locations.
Sand Dust
post Jan 12 2019, 09:06 PM

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Almost everywhere.

You will be quite surprised what rental you can get in MK these days, compare to just couple years back.
airtawarian
post Jan 12 2019, 09:59 PM

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Yes drop 500
puchongite
post Jan 12 2019, 10:11 PM

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QUOTE(Sand Dust @ Jan 12 2019, 09:06 PM)
Almost everywhere.

You will be quite surprised what rental you can get in MK these days, compare to just couple years back.
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Give figures. Not something like "surprised", different people surprised at different thing.
puchongite
post Jan 12 2019, 10:13 PM

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If rental is still dropping, then more auction will enter market, auction price will drop to new low.

This post has been edited by puchongite: Jan 12 2019, 10:16 PM
noiseemunkee
post Jan 12 2019, 11:46 PM

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imho, it is dropping and no sign of bottoming yet as supply keep on coming in from the 2013-2015 launches. new condos also tend to be higher density adding more supply to the already high inventories to be cleared.

agree with icemanfx, mathematically its better to just lower down the rent than to lose the one month rental. when it is low enough maybe the market will find its new equilibrium. i see this as market is undergoing correction. eventually it will correct itself after much blood is spilled.

agree with askarperang also that new unit will pull away existing tenant if the rental is not so much different. its a buyer/renter market now.

my thought is to focus on the extreme end of the spectrum i.e. look into cheaper units with lower absolute rental but high ROI. these segment may also serve as the floor to the market, so price more difficult to go much lower. or go for the niche high end segment where the supply is not easily flooded and the demand is not much affected by the slowing economy. the middle segment is too risky right now in my view.
icemanfx
post Jan 13 2019, 12:02 AM

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QUOTE(puchongite @ Jan 12 2019, 10:13 PM)
If rental is still dropping, then more auction will enter market, auction price will drop to new low.
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rental is a early indicator of property price. property price track rental price most of the time; property price is likely to drop until rental yield is attractive to buy to rent investors.

This post has been edited by icemanfx: Jan 13 2019, 12:12 AM
Tan&tan
post Jan 13 2019, 03:05 AM

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QUOTE(icemanfx @ Jan 13 2019, 12:02 AM)
rental is a early indicator of property price. property price track rental price most of the time; property price is likely to drop until rental yield is attractive to buy to rent investors.
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And 3% networth not more than 100k kthxbai
kuci_mayong
post Jan 13 2019, 03:57 AM

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QUOTE(puchongite @ Jan 12 2019, 10:11 PM)
Give figures. Not something like "surprised", different people surprised at different thing.
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You know Malaysians, like to pluck stories from their backside. Funniest one was say country was going bankrupt then introduce the year’s largest budget.
kuci_mayong
post Jan 13 2019, 04:03 AM

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QUOTE(icemanfx @ Jan 12 2019, 08:36 PM)
For every month the unit is left vacant is equivalent to 8.3% shortfall of yearly rental income. It is better better to drop 10% than leave it vacant for 2 months.
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This is sort of a double edge sword too. If you discount your rental, you will reduce overall asking price and set a new low.

Unfortunately, this is hard to control when you are not the only provider.
icemanfx
post Jan 13 2019, 04:17 AM

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QUOTE(kuci_mayong @ Jan 13 2019, 04:03 AM)
This is sort of a double edge sword too. If you discount your rental, you will reduce overall asking price and set a new low.

Unfortunately, this is hard to control when you are not the only provider.
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Landlord tenant relationship is like game of chicken; at current market sentiment, landlord is likely to brink first.
kuci_mayong
post Jan 13 2019, 04:22 AM

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QUOTE(icemanfx @ Jan 13 2019, 04:17 AM)
Landlord tenant relationship is like game of chicken; at current market sentiment, landlord is likely to brink first.
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Nice analogy
trust4you
post Jan 13 2019, 09:11 AM

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The reason why its dropping becos ppl like new thing. As arron says people like to small new thing, new car, new house, if ur condo is aged n worst still management is poor, many tenant wull just leave. They wun tell u straight, but most of the reason the tenant will leave for other building if management is poor
SongSongLai
post Jan 13 2019, 10:45 AM

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Tenant from 1050sf RM1500 rental old apartment move to new 850sf RM1700 rental new service apartment is the trend now..end up all the old apartment force to rent to bangla is the trend now

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