Real Estate Matters | Common misconceptions about renting a property in Macau – Part 5
Juliet Risdon
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…
I can use the security deposit to pay the last two months rent
No. Deposits may not be used to cover rents.
A deposit is for the fixtures, fittings and furnishings of the property. Macau Law is very specific about this.
The moment that a rent is unpaid for 30 days, the landlord is entitled to the amount of rent owed plus an additional penalty equal to 100 percent of the rent.
In other words, if you don’t pay rent for the last two months, you will owe four months rent. If this goes into the courts and remains unpaid, a person returning to Macau risks being detained at immigration.
The owner is responsible for looking after my rental apartment ?
The tenant is responsible for the safekeeping and care of the contents of the apartment, and returning the apartment in the same condition that it was handed over with an allowance for reasonable wear and tear.
The owner is responsible for the infrastructure of the apartment such as the shell of the apartment itself, the plumbing system, the provision of power etc. In other words, providing reasonable and safe conditions for habitation.
I will rent an apartment for three months only
Yes, it is possible, but unlikely.
There is usually great difficulty attached to renting an apartment for less than six months. Most owners consider it too much trouble, and many agents refuse to handle such short leases.
However, it is possible to rent for shorter periods using a Corporate Rental program.
Under the program, the rental agreement is signed under the company name, and the agreement provides the tenant with more flexibility than a traditional long-term lease.
The owner has lots of money. They are being greedy asking for a higher rent
You will already be aware that property prices are high in Macau, and in most cases owners have had find large chunks of cash to purchase properties.
Even with interest rates at a current low, the vast majority of owners do not receive enough rent to cover loan payments, and must therefore subsidize the mortgage every month.
Many such owners are individuals, but they may have borrowed money from family members and put themselves in long-term debt in order to ‘get a foot on the property ladder’.
Whilst it may be difficult to feel sorry for landlords, it is wise to recognize the need for both parties in the relationship. Without an owner who is willing to risk investing money in a property in which they don’t live, of course there would also be no tenant.
24. I’m only here for a short time, so I wont buy anywhere.
As long as you think long-term, it’s still a good time to buy in Macau. You may plan to be here for a short time, but plans change, and even if they don’t and you end up leaving, your property investment can continue with you as an overseas owner.
As more new casinos and resorts take shape on Cotai, the demand for housing will increase as the population grows.
Property of a ‘livable’ quality is in short supply, and basic economics tell us that prices will continue to rise.
However, rising prices cannot continue indefinitely, and we are currently experiencing a slowdown of course. But we have to live somewhere, and it makes good financial sense to own the property we live in.
Apart from anything else, we are at least in control of our living arrangements, and not looking for a new place to live every two years.
Continued next week…
Juliet Risdon is a Director of JML Property and a property investor.
Having been established 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.
info@JMLProperty.com
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