The COVID-19 pandemic created more opportunities for negotiating rents around the world. In some markets, landlords are willing to negotiate rents, especially with a different/non-traditional payment option, while others may offer shorter lease contracts.
Changing payment terms
In popular holiday destinations like Cape Town, South Africa, many holiday homeowners joined the residential rental market with discounted rates. They offer fully furnished non-serviced apartments with a much shorter lease length to attract demand from tenants who want more flexible lease terms.
A similar practice is seen on the other side of the world in mainland China. While it is common to see different payment terms (i.e., annual or bi-annual payment in northern China vs. monthly payment in southern China), rentals are typically leased for one year. However, in some of the less popular compounds, it is now starting to become possible for tenants to negotiate to a shorter lease to minimize the risk of losing the deposit if there is any change of plans.
In Hong Kong, tenants with 12- to 24-month lease contracts that are willing to pay quarterly or even entirely upfront to secure a good deal are very desirable to landlords, even with a 5-10% rental reduction. In Manila, Philippines where upfront payment and one-year leases are the norm, some tenants are asking for 7-month upfront payments to lessen the financial burden and to provide relief from a one-year commitment.
It is uncertain when the global economy will rebound and if these rental market trends will continue. For now, happy, reliable tenants who pay rent on time are especially important to investors who need to pay off mortgages without any sort of assistance.
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