Juliet Risdon
Juliet Risdon is a Director of JML Property and a property investor.
Having established the company in 1994, JML Property offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.
When you consider the rental process usually involves at least two different languages (sometimes three), its not surprising that misunderstandings are commonplace.
This list of common misconceptions may look innocent enough, but the difference in expectation is usually the source of major rental conflicts, and one that could be easily avoided with a little more clarity up front.
Carrying on from last week, we continue with some of the most common misconceptions…
5-Rental prices are high, they must go down
As we are all very much aware, Macau is extremely small. Even with the addition of Hengqin Island, land and space are extremely limited. There is only one-way to build.
Macau’s economic future looks as certain as anything can be, at least until 2049. Over the long term, it is difficult to see anything other than a rise in property prices.
Every increase is met with similar attitudes from prospective buyers; It can’t continue to rise, there is a limit of ‘x’ beyond which it will never go etc. However, prices have continued to rise overall, and property that looked expensive years ago now looks like a bargain.
We can see many arguments for continued growth, whilst slowdowns like the one we are currently experiencing are usually the result of something happening outside of Macau.
As such it is difficult to draw a conclusion other than this. Provided you have a long term view of 5 years or more, Macau property prices are likely to rise.
6-There’s no big difference between gross and net area
The NET area is the area inside the walls of the apartment that can be used by the occupants.
The GROSS area is the net area PLUS a proportional amount of the common areas of the building such as the lobby, lift space and recreational club.
The net area in modern buildings with recreation facilities is usually around 70% of the gross area. This is sometimes referred to as the ‘efficiency’ or the ‘ratio’ of the building.
It is important to know the difference, you may be renting a space that is MUCH smaller than you think.
7-Insurance is a problem for the owner …
The owner is responsible to acquire insurance for the construction of the apartment, whilst as a tenant you are responsible for the welfare and safekeeping of the contents and furnishings.
We recommend that you have contents insurance, it can be obtained from banks in Macau, and we also have contacts for Insurance companies that we are happy to share if you are having trouble getting insurance.
The amount you pay depends on the sum insured, but its not expensive.
8-All apartments in Macau come with internet / connectivity
Setting up a network in the property is usually the responsibility of the tenant.
It may pay to know where the dead spots are in the apartment before you sign a lease in case you have to consider going ‘old-school’ and getting a landline installed.
For wi-fi, the thickness of the walls and strength of the signal will determine whether you can get wireless connectivity in the apartment with one router.
If not, you might need to get additional equipment which can be both frustrating and expensive.
The connection speeds vary tremendously dependent on the type of service available. Some of the older low-rise buildings do not have a high speed connections, whilst most of the newly built high-rises may offer the high speed service as a service or an option.
9-Its my apartment, I can sub-lease it or advertise on Air BnB…
Subletting may be the only way to avoid breaking your lease if you need to move out before the lease is up. It may also be the only way you can afford the rent.
However, not only is subletting without permission against the law, many owners are staunchly against and you may well be in breach of contract.
If you are given permission to sub-let the property, it must be specifically added into the Tenancy Agreement in writing.
Under Macau Law, the absence of this specific clause means that the apartment cannot be sub-leased.
To continue next week…
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