Ep 60: 3 Personal Tips for 1st time Home Renters

3 Personal Tips for 1st time Home Renters

Getting your own space for the first time is a nightmare! Where do you even start? Should you get an agent or go directly to the owners? In today’s episode, Reggie will share with you his personal experiences through renting his first property to reduce that anxiety and provide a game plan to roll with.

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podcast Transcript

So I know many of you guys know that I rent a place in KL (Kuala Lumpur) for a period of time. Physically now I’m back for Singapore. But during the past year, before Covid was a thing, I was living in KL and I rented my first apartment of my life. And there are many things that happened. Oh, some things better, some things not so good, but over time I learned, I learned some stuff and I have some friends who also rent their own apartment.

I asked them for some tips and some ideas as to how to become a better renter. So today I’m going to share with you essentially three tips to be a better person first time renter. So yeah, I hope you learned something useful. Welcome back!

Good morning, everyone! I welcome you to another day with The Financial Coconut. In our podcasts, we’ll be debunking financial myths, discovering best financial practices, and discussing financial strategies that fit our unique life. You get it, ultimately empowering us to create a life we love while managing our finances as well.

And today we’re going to talk about 3 tips for a first time home renter.

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In Singapore it’s not very common for young adults to rent an apartment or rent a room or rent somewhere. So for a lot of people, this idea of renting a space is very questionable. And honestly, a lot of our parents have not rented a space ever when they were younger. And in essence, renting is a very foreign concept, especially amongst the Chinese people.

I think that there is an idea of owning a place. There’s always about saving money to buy a place. And we’ve talked about this extensively in some of the earlier episodes, where one of the things I think is very good for you to consider having, is to go and rent a place.

Because when you rent your own place, you learn about your likes, your dislikes, you throw away all the arbitraries. Like what I said before, you think you love a pool, right? You think wah, it’d be so amazing to live in a condo with a pool, but now after you shift in, you realize, damn I don’t use it every day.

In fact, maybe I use it once a week or twice a week. So, it is interesting to understand yourself better and renting your own space gives you the information and understanding before you decide that, “Okay, actually, in my life, as part of my apartment as part of my house, I want this, this, this…” So when you have that clarity, when you buy the apartment and your own property, it is much clearer.

It fits your needs in a more accurate standpoint. And I do encourage people to try and rent your own place to get to know yourself better, know your quirks and just experience life away from your family, right? Because that is a very good part of building your own life, your own ideologies and your own beliefs.

So I do encourage that. I thought that because I encourage you to go and rent, then a lot of you guys would probably be first-time renters, let me just share with you some tips. How to be a better first time renter? So my very first tip is to only rent for a year.

I don’t rent for more than that. I also don’t try to rent for less than that. I think a year is a very good time for you to understand yourself and your life. Of course, if you rent longer, sometimes things are a bit cheaper. And also if you rent longer, it gives you a lot more certainty as you could develop your life around this space.

Because when you live in a place, you start to develop your own life around the community and the neighborhood, right? If you live, let’s say if you live in Upper Thompson, then you’ll be visiting the makan areas of Upper Thompson. Then, there will be a certain way of life. There’s Bishan Park.

If you choose to live in Pasir Ris, then there’ll be another way of life. Or if you choose to live in KL, it’d be a different way of life. And the reality is yes. If you have a longer lease term, 2 years, 3 years, 5 years, you get more confirmation that I want to live here. And you will be more able to develop your life there.

Rather than having this idea that I’m just here for a year and I’ll see how things go. But as a first time renter, assuming that you don’t know about the kind of place that you enjoy living, you don’t know enough about yourself. You have a lot of fantasy and ideas in your head.

Like “Wah! I must have a pool downstairs! Must have a running track, opposite must have a bar, behind must have like some cafe” and all sorts of stuff that you think in your head that you love and you enjoy. It may not be the case after you rent right after you start living there.

You may start to appreciate that auntie downstairs who every morning stays high, or that small little corner shop with that very beautiful lady, or that very happy man, whatever! So different, different ways of life will exist. And when you start renting your own place, you get a much clearer view of whether is this the life you want.

So to me, rent a year, start there. After this one whole year, you’ll start to recognize yourself better. And maybe, you should do that for the next few apartments too, 1 or 2 years. Then after maybe three or four rentals, you will very clearly and vividly know that, “Okay, these are what I enjoy. I want to live in a place where there are lesser people, low density housing. I don’t need to be very near the MRT. I’m able to cycle and I want to make sure that around me, there’s a lot of makan places all around me” or “all around me, there’re no makan places so it’s quiet.” All these different things, you don’t know until you actually live in a place.

So try out for that one year, have the kind of timeline to get the clarity as to what you actually like. Or decently get a better grasp of what you enjoy before you decide that, “Okay, maybe I want to continue to rent here, or maybe I want to try another place.” Continue to get more information, get more idea of what you enjoy, and what kind of life do you want to shape.

Of course that being said, it means that I’m disencouraging you to rent for too long, just for the convenience, because it is very much of a hassle to keep shifting. Some people would think, “Ah, just rent for 2 years, 3 years and then I’ll decide.”

So to me, I would think a year is good because of all these perks, but any shorter will be a lot questionable also, right? I think one year is a good benchmark, at least from my personal experience and from the many friends that I have who live abroad, whether it is to study or work.

I think most people agree that this one year process gives you a decent timeline to understand yourself, understand your environment, and then make a better decision over the next few other properties that you choose to live or buy or rent. Which brings me to point number 2. Point number 2 is that you need to set a budget and stick to it.

This is why I called benchmarking. And I’ll share with you a little bit of my story, my first time renting a property in Malaysia, after a word from our sponsor.

So I think buried deep down somewhere, I’ve this belief about cheap and good. Probably it’s a family thing. You want to buy something that is cheap and good, right? My experience when I was shopping for a place to rent was that I kept wanting to find something cheaper and better.

Which is a pretty cute lah! Pretty questionable, because we’re not buying one-off things, we’re not buying something on discount. We’re not buying a fruit basket or something. We’re actually renting a place with a market benchmark and with an ongoing expense.

So renting a place is an ongoing expense. And what I realized was I could actually already find a place that I wanted. That means, I really thought, “Okay, I want this place and I know that it fits my budget.” Like I’ve said, it’s on a budget as it’s an ongoing expense.

It’s part of my budgeting for my month to month rent. It fits the budget. It fits the bill. It fits what I want, but even then I feel I want to go and negotiate with the agent. I feel I want to go negotiate with the landlord to get a cheaper rate just because I got this underlying belief of cheap and good.

And that caused me to feel a little jittery. It’s like, “Oh, can I get a better deal? Can I get a better deal?” And when I thought about this, maybe I shouldn’t waste too much energy and time and be so anxious about getting a better deal because it has already met my benchmark and met what I need, right?

And it’s what I was expecting to pay for given my expectations. So I thought that is something very important to recognize, especially for first time renters, because you have no experience, you don’t understand the market. And of course you use the apps, they will give you all the information, like in this area, in this estate, what is the average price?

Just tons of this kind of property apps. I don’t need to tell you any, but because of your lack of experience, because of my lack of experience and my underlying belief of cheap and good, I felt very jittery trying to pay and commit to something.

And I always feel like I need to get it at a more affordable rate, but if I’m always pressing prices and my landlord is uncomfortable and you just feel like they’re getting forced into this agreement, then maybe not that great lah because it’s an ongoing kind of purchase… every month, every month.

It’s not a one off thing that you don’t need to really care about the sellers, like uh whatever lah! The relationship ends at the purchase. But for this, it’s not. The relationship starts at the purchase. So in my view, after I thought about it, after this one year of experience, it is very important from a renter’s viewpoint to essentially set a budget based on what you understand to be comfortable, probably somewhere in the ballpark of 10 to 15% of your salary. I think that’s what some people say. 

So I spent about S$500 to rent an apartment in KL. So that is my hack, my geo-arbitrage as what the FIRE (financial independence retire early) guys say. So set that benchmark, set the price, understand yourself, and stick to the budget..

It definitely gave me comfort to know that I’ve met my objectives, and I stopped shifting the goalpost and always try to get a cheaper one. To me, recognize that as long as it meets your budget, renting a property is an ongoing purchase. It is not a one off thing. So that is something for you to note.

And the third point and tip for you all first time, home renters is, always get an agent. Always get an intermediary. I know, because for a lot of guys that are first time renters, we usually have a tighter budget and we always want to save money, and the agent fees can go up to a month, two months.

And for whatever reason, you know, there’s a lot of distaste for agents. You don’t like them, you always feel like they’re eating you lah. You always feel like they’re making money off you, which is not wrong, of course. They are providing you a service. They’re helping you to do certain things and they’re charging you a fee.

But I feel that as a first time renter, or even second time, third time rental, even a home buyer, I would think having that agent as an interim helps a lot. I save on a lot of things. I cut back on a lot of costs, but property agents is one of these costs I find it very hard to cut it because they do provide very interesting value, that if you’ve never transacted a property in any way, you will probably not appreciate this. 

So some people think the agent only does the sourcing, they help you find your place, and with all these apps these days, you can automate the sourcing, which is not wrong.

That is one part they can automate. And probably most of your agents are on all these platforms trying to source for properties based on what you like, based on what you’re looking for. So that is that part about property. But on top of that, actually a lot of our agents, they do serve as the lubricant of the discussion.

They can help you with recognizing what is the market here and negotiate with the landlord. Sometimes, they represent a landlord. They want to negotiate with you, but it’s important to have this intermediary to help lubricate the discussion and negotiation.

So everybody gets that middle ground to discuss. Because sometimes, it gets a little fiery lah. Let’s say you want something, you know, or whatnot. And also, the agent’s job doesn’t end at just the transaction. Ongoing, they will service you. I remember I’ve had an experience of my sink being choked.

And it was the first time I’ve ever experienced a sink being choked. And I was like, “What to do ah? I don’t know what to do.” So, I could have directly reached out to the landlord and be like, “What the hell is going on? Right?” But I instead went to the agent and asked him, “Hey, can you just help me sort this out, what is going on?”

And he came over to help me. He started out and he was like, “Hey, let’s say this doesn’t work out.” He will tell the landlord that there is a choke and they will need to clean up that choke. So there is that kind of aid in terms of having that additional layer of discussion, and that additional layer of people being around to help you to mitigate this kind of slightly more complex situations, because the reality is you are living in a landlord’s place.

They own the place and you are renting the place. So I don’t think you want to anger the person that owns the place lah, let’s be honest and real. So to me, that is one role that the agents do play, it’s very important. Of course, they have the legal tender, they have the legal kind of arrangement that is involved.

They will ensure that the contracts are being kept up to date. They will ensure that the contracts are being met. So they do serve in the intermediary of assurance. And I think that is where the future of agencies will be serving as the intermediary of trust and mediation. So don’t be too happy when you go on Carousell and you see this thing and no agents or blah, blah, blah.

It will be cheaper of course, because there’s no agent fee, but I feel that because you are a first time, especially because you are a first time renter, and you don’t understand what are your rights, what can you control and what you cannot control, then pay a little bit of their fee to give you that interim of trust, assurance, and mediation.

To me, I think that makes your life much easier. While you are trying to figure out your life, figure out what you enjoy, what you don’t, and just kind of shape your life. I’m sure you don’t really want to be too bothered about all these kind of hassle and stuff lah. Of course, all that being said, feel free to change your agent.

Right from the start, if you feel that the agent is not meeting our needs, or they’re not serving you with that intention, then definitely change the agent. Be happy and upfront. Don’t be paiseh lah. A lot of Asians are very paiseh lah, as if the first day you must marry lah. No! That’s not the truth.

So if you don’t like the agent, then change the agent. But. I would think personally from my experience, even for my next few properties that I rent or when I buy, I would believe that I need an agent to help me with all of these kinds of additional stuff beyond just the search, beyond just paperwork.

It’s really the mediation and the kind of trust intermediary that I’m looking for when I work with an agent. So to me, that is something that you should consider. So to sum up today, 3 tips for your first time home renter. Number 1 is I feel that you need to rent for a year. Not too long, not too short. A year is a good time to understand your habits and your preferences.

And if you want to continue, so be it. If you want to change a place, so be it. Maybe after you change one or two places, you realize, “Hey, actually I quite like the first place” and you can always go back. Don’t need to over commit because it’s your first time, you want to explore, you want to know yourself.

Of course, don’t under commit and you keep shifting and very mafan right? You got to shift your stuff again and again and again, and it is quite a hassle shifting house.

Number 2 is set your budget, set a budget that is comfortable to your way of life. And stick to it. Use that as the benchmark. Don’t be on an endless pursuit to find cheap and good.

Because there will always be better, there will always be cheaper. It’s an endless pursuit, right? Why not stick to something that you’re comfortable with? You know this is where you can, and recognize that this is the start of a purchase. It is not an end of a purchase, because when you rent something, that’s only the beginning, right? It’s not like when you’re buying some vegetable out there on offer, okay? 

And point number 3 is to always work with an agent that you’re comfortable with, that you can trust, that can be there to do the mediation, and be there for you to entrust. So it is not just about how flattery they are when they talk about, but whether you can really trust this person to do these additional stuff of mediating and serve as an intermediary of trust. I hope you have learned something useful and I hope you find that first apartment of yours to rent and discover your life. See ya!

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Test test. Okay, I hope you guys learned some interesting stuff. Keep your budget low. Of course, those are good things. Lean down your expenses, blah, blah, blah. Those are fine. But these are real firsthand experiences from myself and my friends who have rented the place before.

It’s not all about budgeting, not just all about technicalities, not all about finding a place that’s closest to town or most convenient, which is not true. Because sometimes you just don’t want to stay too near to town. Sometimes, you want to do that little bit of walk and all sorts of stuff.

So, these are some guidelines, I think for a first time renter, it’s more realistic lah. It’s not like some, you know, ya lah. Some advices are very questionable, but anyway, I hope you’ve learned something. I hope you can go and find your very first property to rent. So that’s that for today.

And next week, talking about cheap like how to reduce your expenses, next week we have a person that’s coming onto the show who thinks being cheap is an insult. Because he goes one step further to work for free. He’s looking for free. So he is Daniel. Next week. We’re having Daniel on the show and he will be sharing with us his freegan movement..

This whole idea of living in Singapore for free, is it even possible? And when you live for free, do you need insurance, financial planning? What do you do with your life? How do you spend your day? You know, all these big and small things, we’ll chat with him next week. And of course, he’s not a new guy, right?

If you go on the media and you search Daniel Tay, freegan activist, you will see him around. He said that he had a good time chatting with us, and probably had a lot of interesting juicy things you probably cannot find elsewhere. So next week, we’re going to have him on the show to talk to us more about his way of life, how to live without spending, spending almost nothing in Singapore, and how to live a freegan lifestyle.

So we’ll see you next week. Bye guys!

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