Despite the economic ups and downs in many countries, people are doing their best to look into multiple ways of earning extra income. Most are nowadays opting for real estate investments. This seems like a reliable and hassle-free alternative for extra income. With a property rental, you are assured of a steady income without the need to go to work. But rental investments require you to pick the highest value rental property. They also require routine maintenance and other elements to guarantee high returns.
Only investors who work with a property management company for their Singapore-based rental property could realize the kind of returns for their rental properties. Good property management will guide your property’s day-to-day management and help you set the right price to attract tenants. Among the elements that affect the returns of most rental property owners is their lease. Here are the different lease options you could choose.
Term for Years
This is a lease that ends within a specified timeframe that can be weeks, months, or years. The crucial element of this lease alternative is that your tenant will not give you a notice when they vacate at the end of the lease. If you and the tenant decide to extend the tenancy, you should draw up a new contract unless your primary contract has a renewal clause.
This is the most common residential lease. Here, there is no exact timeframe for the tenancy. The contract is instead automatically renewed at the end of a set period. Thereafter, the tenant will pay rent for the next period if he/she wants to continue the lease. If the property owner or tenant wants to terminate the lease for whatever reason, he/she will give the other party a one-period advance. If, for instance, the period of your contract is a month with rent paid monthly, you will provide a one month notice for lease termination.
Tenancy at Will
This resembles the periodic tenancy, but unlike the latter has nothing in writing. The lease will continue as long as both landlord and tenant agree to the same, and there is no set rent. The tenancy at will generally exists between friends and is an informal relationship that can be terminated any time one party wants to end it without notice.
Tenancy at Sufferance
Here, a tenant continues living in your property after the lease expires but without your approval. If the tenant still pays rent and you accept it during this time, the contract is considered a holdover tenancy wherein the terms of your primary lease will apply. If however, you do not want the holdover tenancy, you should give the tenant a month’s notice to vacate.
Your residential lease will specify your property’s description, the rent amount, and when it should be paid, and the lease term. This document will prove crucial in case there is a dispute between you and the tenant. You should make sure that it is drafted under the guidance of a seasoned property management agency.