You will be able to prepare for and hold a lease negotiation using market data and several terms.
Priya and Kevin rent a two-bedroom condo unit in Sengkang for S$3,000 a month. Three months before the lease ends, the landlord's agent sends a WhatsApp message: the owner would like S$3,300 for the next two years. Kevin's reaction is to start looking for somewhere else. Priya's is to ask what the flat next door went for.
Priya has the better instinct. A lease renewal is one of the most common negotiations adults in Singapore face, and it's one where a little preparation tends to pay off, because both sides lose something if the tenant leaves. All figures in this lesson are examples.
Start with current asking rents for similar units nearby. Property portals list rentals by area, size and type, so you can find units in the same development or the next one, with a similar number of bedrooms and a similar floor area. Note five or more, with the asking rent and the date you saw each.
Asking rents aren't the same as the rents people actually agree. Listings often settle a little lower, especially if they've been up for a while. So note how long each listing has been up, or check back a week later to see which are still there. Units that stay listed for weeks suggest the market is softer than the asking prices make it look. Units that disappear within days suggest the opposite.
Priya finds six comparable units. Their asking rents run from S$3,050 to S$3,350, and two of the higher ones have been listed for over a month. Her read: the realistic market for their unit is around S$3,100 to S$3,200, below the owner's S$3,300. That's her objective criterion, in the sense of lesson 1.3, Separate the people from the problem.
Now think about the landlord's BATNA, the way lesson 2.3, Estimate theirs and find the zone of possible agreement, described. If Priya and Kevin leave, the owner has to find a new tenant. That usually means some time with the unit empty, possibly an agent's fee, perhaps some redecoration, and the risk that the new tenant pays late or treats the flat badly.
Run the numbers. The increase the owner wants is S$300 a month, or S$3,600 a year. One empty month at S$3,300 costs S$3,300 in lost rent. Two empty months cost S$6,600, almost two years of the increase. That's before any agent's fee. A tenant who pays on time and looks after the place is worth a lot to a landlord, and most landlords know it.
Priya and Kevin have paid on time for two years and kept the unit in good condition. That's part of their case, and they should say so plainly.
As lesson 3.2, List the issues and decide what you can trade, showed, price is rarely the only issue. In a lease, several other terms are negotiable:
Lease length: a longer lease gives the landlord certainty, which can be worth a lower rent to them Repairs: who pays for what, and whether an old appliance gets replaced before the new lease Furniture: adding, removing or replacing items The diplomatic clause, which some leases include to let a tenant end the lease early in set circumstances, such as a job posting overseas The move-in or renewal date, and the notice either side must give
Priya's priorities are rent and a newer washing machine, since the current one has broken down twice. A two-year lease suits them, since they plan to stay. So she proposes a package in the style of lesson 5.3, Put several offers on the table at once: S$3,150 a month for two years with the washing machine replaced, or S$3,200 for two years if the owner would rather not replace it now.
Whatever you agree, get it into the tenancy agreement itself, not just the WhatsApp chat with the agent. A message saying "OK, owner agrees to change the washing machine" is helpful as a record of the discussion, but it's the signed agreement that both sides will turn to if there's a dispute later.
When the renewal agreement arrives, read it against your notes, item by item, the way lesson 5.4, Close the deal and write it down, described. Check the rent, the dates, the repair terms and any clause you discussed. If something's missing, ask for it to be added before you sign.
Priya will start with the listings. The activity asks you to do the same for your own area, and then name the three terms besides rent you'd put on the table.
Collect five comparable listings for your area and write the three terms besides rent that you would negotiate.
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