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Thread: J Gateway rental not bad

  1. #21
    Join Date
    Mar 2009
    Posts
    10,349

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    I also don't understand how a collecting a monthly rental of $2k pm when you have to pay out a few thousands dollars upfront can be considered to get high yield? (not to mention another few thousands upfront later to make good the property ready for next tenant).
    Other the curtains and blinds, landlords also have to install lamps, pay maintenance and sinking fund, property taxes, pay agent fees etc. May be you can show how much is the net rental yield (rather than gross including all these costs)? Also, I heard agents asking for 1 month commission per year of rental (vs usual 0.5 month) for for helping to rent out mickey mouse unit.

    I never want to deal with property whose rental is <$4k pm. The effort is just not worth it!

    Or just like the 95.8FM, can only hear the good news?

    Quote Originally Posted by Kelonguni View Post
    Exactly. He is scrutinizing every word to see if he can find a gap.

    To begin with, the issue was with us explaining why (and how) units with very low yield rates make do, i.e. 1,800 per month for a J Gateway MM unit.

    We never really know how the landlord could have optimised his position with this purchase. For example, I do remember reading that such caveats are priced at about 700K instead of 800K. The max PSF it went to was 1700PSF but most should have paid below this position.

    There are some other potential ways the landlord could have derived value from this move on top of the rental which should not be discussed here as well.

  2. #22
    Join Date
    May 2012
    Posts
    3,370

    Default

    You are partially right on a few things though.

    1. One of the reasons against some emerging markets may be that the rents may not justify the efforts even though the yield may be high.

    2. All the costs are important. Rental yield calculations and simulations I have done several, including all the relevant costs. Just go and dig dig dig for them I guess.

    3. You don't understand.

    The above three points are correct.

    Even if the property is fully paid, you still look down upon those with rent lower than 4K?

    Quote Originally Posted by teddybear View Post
    I also don't understand how a collecting a monthly rental of $2k pm when you have to pay out a few thousands dollars upfront can be considered to get high yield? (not to mention another few thousands upfront later to make good the property ready for next tenant).
    Other the curtains and blinds, landlords also have to install lamps, pay maintenance and sinking fund, property taxes, pay agent fees etc. May be you can show how much is the net rental yield (rather than gross including all these costs)? Also, I heard agents asking for 1 month commission per year of rental (vs usual 0.5 month) for for helping to rent out mickey mouse unit.

    I never want to deal with property whose rental is <$4k pm. The effort is just not worth it!

    Or just like the 95.8FM, can only hear the good news?
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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