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Rent and increase

  1. #1
    temajie is offline Registered User
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    Hung Hom
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    Rent and increase

    Hi everyone,

    Making budget for our new life in HK, I would like to be sure of what I am going to pay for the rent which is of course the highest expense.

    Besides the price of the rent itself, are there "hidden" taxes? I heard of government and management taxes but they are most of the time included in the price, right?

    Can I start visiting apartments with higher rents than what I expect to pay, assuming that the rent will be lowered after negociations or it is not a good idea because I do not speak mandarin/cantonese? By the way, is it common practice that agents negociate for us or not?

    Last but not least, can the rent be increased each year? Is there a law limiting such an increase to prevent tenants being in a difficult situation?

    Thanks.

  2. #2
    kellyst is offline Registered User
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    The rental market is quite crazy now, a landlord's market still, so do not expect rents to go down by a lot from negotiations, but do negotiate a little.

    Rent increase can only be controlled by how long your contract is, leases in HK are usually one year fixed and then the next year both sides can serve 1-2 month notice, but staying on the same rent. we've been renegotiating within the 2nd year for the past 2 leases, one time to our advantage and the other time to the landlord's, so it depends on the market.

    Watch out for repair terms, see who is responsible for repairs and $$$ and under what circumstances.

    Mostly taxes and management should be included in rent. You just need to look out for utility bills.

  3. #3
    kellyst is offline Registered User
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    also, u will need to pay the agent commission equivalent to one month's rental, this is split between you and the landlord.

  4. #4
    matemate is offline Registered User
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    most important: everything is negotiable. especially for expensive apartments, i would never pay the full agent fee. we also once implemented an incentive system, i.e. we had a target price, and if the final price was below, the agent got 0.5%, if above he got only 0.2%.

    all rents can be negotiated, but it depends how the landlord is. my base assumption would be that if a flat is out at 16k, the final price (mutually agreed between agent and landlord) is 15k. for a flat advertized at 60k, the final price is probably 55k.

    remember that most agents have more loyalty to the landlord than to you, as they get more repeat business from the landlord. as such you should always handle the negotiation yourself, and only use the landlord as a conduit or negotiation ploy (which means for example: never tell the agent how much you are really willing to pay).

  5. #5
    Shenzhennifer is offline Registered User
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    If you state your budget to the agent, they will always show you more expensive flats. The rule of thumb seems to be to tell them a lower budget. I never have because I don't like to waste time and play games and then if the flat is more expensive than I'm willing to pay, I just tell them that unless they will go down to XXXX then I'm not interested. They get the point soon.
    There are actually some good agents out there, though there seem to be more sleazy ones. When we were looking a few months ago for a new flat, our budget was 12-15K(prices had risen by about 30-40% from the previous year during the recession). I was using 3 different agents (from 3 companies) and found everyone pretty much added $500-$1000 per month on what the landlord would ultimately accept. Some landlords are very strict and will not negotiate at all, however, particularly if the flat has some good features.
    If you use the agency's lease agreement like is accepted practice here, I think it says that the landlord is responsble for all structural repairs. The agreement is quite sensible. For us, our landlord is some big business dude who uses lawyers instead of agents and we had to negotiate through a 30 page contract where originally it said we were liable for anyting and everything. Luckily, that was all negotiated down. But the problem in HK is that there actually is no law stating that the landlord is responsible - only conventional practice. But for the most part, it shouldn't be a problem unless you have a problematic owner. I would make sure that the flat is in really good condition before you move in and any appliances are also in decent working order.
    Generally, all management fees and gov't taxes are covered by the owner. Sometimes you have to pay the stamp duty though. We had to pay half (bc of our anal landlord) which was about $400-500. I would not move into a place where they tried to make you pay management fees because they are expensive.

  6. #6
    kellyst is offline Registered User
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    i'm learning lots from this discussion too, e.g. negotiable agents fee. i've never even thought of that. we're suckers at negotiation. matemate, when you say 0.2 or 0.5% sounds like you're referring to when you're buying? coz the usual is 1%?

    i have yet to see a good (not sleazy) agent, so depressing.

  7. #7
    carang's Avatar
    carang is offline Registered User
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    they don't mean .5%

    they mean 50%.... you pay 50% of one month for agent's fees. this is possible to negotiate but not much really.

  8. #8
    jvn
    jvn is offline Registered User
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    Some of the agents have pre negotiated discounts on their fees with some of the companies here depending on who you are coming here to work for, it's always worth asking.

    From what my friends who are looking move have been telling me it is a landlords market at the moment but I'd still negotiate, your agent can negotiate for you with the landlord if you give them a price range but like anything some are useless negotiators some are excellent. Often a landlord will be more likely to agree to a couple of months free at the start of your lease than an overall discount on the monthly rental so it pays to be creative with what you offer.

    Depending on where you're looking and what sort of price range I really like my contact at Hong Kong Homes, she gets a good handle on what you're after and is a feisty negotiator, the agency also sorts out all your water, gas and electricity connection and is good with recommended suppliers like handyman and curtains so I feel like they earn their fee a bit! PM me if you want her contact details.

    I agree with the others, read your contract carefully and don't be afraid to ask for changes if there's something you aren't comfortable with.

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