Groceries Management Part II

If you are one of the fortunate (or unfortunate, depending on the market cycle) few to own a couple of properties, you would have had first hand experience at managing and letting them. After a while, especially if you hold a day job, it can get rather nerve wrecking. I'm talking about needy tenants and those who are not used to taking care of stuff with their own hands.

"Oh, the bulb just blew, and I'm scared of heights. So can you please make a trip and help me replace it?"

"There was a power trip! What should I do! HELLLLLLLLLLLLLPP!!!!!!!!"

"Secondhand smoke from the neighbour kept drifting into my bedroom, can you come down and speak to them a bit?"

Sometimes, making the trip and spending the money on cabs (if you are lucky to get one quickly) for groceries shopping can make one feel weary and drained. Thank goodness for the internet - major grocers have an online presence so much so you can easily find most if not all of the goods for your shopping pleasure. All you need is a few clicks and your credit card and what you need will appear at your doorstep soon enough. Just pay for the nominal delivery fee.

Likewise, if you do not want any of the hassle dealing directly with needy tenants, you can spend some on commissions and engage a real estate agent to handle the whole process from soliciting, viewing, closing and all the follow up after moving in. You will still get your rental income right on time and you never even have to meet your tenant ever, if you prefer!

Of Being A Landlord and Groceries Management

There are indeed similarities between managing your investment properties and groceries.

If you know that you're gonna use the same brand or kinds of flour, oil, seasoning and spices to prepare your meals every other day or so, it makes sense to buy in bulk a month's supply at one go. Many grocers have bulk discounts or special 'day of week' promotions. Once you have enjoyed the economy of scale of bulk purchase, obviously as foods are eventually perishable and have expiry dates, you will need to use them up within that certain time period. Otherwise stuff goes to waste. In the example above, if you're say sick of bread, the ingredients may be used to dish up something quite different, for example, pies or even cakes. Just so they don't go to waste.

In the same vein, once your investment property is ready to let, every day it is empty is money down the drain, especially if it's mortgaged. It's money out and nothing in. So instead of insisting on getting a tenant that is willing to pay the rent you expect, why not consider dropping it by say 10% - who knows, you may seal a deal right away. Dollars and cents become much more sensitive issues to the average tenant in tough times like now. The month or months of vacancy would be more than made up for with the mere 10% drop in income, more so if the signed lease is for more than year.

Location, Location, Lor Mai Khai

Lor Mai Khai is usually seen as a quick snack when you are in a rush and have no time for a sit down proper meal. It costs probably only half to one third of a normal meal but supplies the needed calories and carbs (and fats). Made of glutinous rice, you will likely find that it can help you last another 3-4 hours before the next feeding.

Yet to some, Lor Mai Khai can be a guilty indulgence or even regular tea break staple. I know that for a fact as I have a colleague back in the army like that, and a few 'guilty as charged' ex colleagues too. So you see, a seemingly common thing as Lor Mai Khai can mean very different things to different people.

One often wonders about the true relevance of Location when it comes to deciding on a home purchase. Is it important that it must be in the prime district? A quiet residential enclave? Somewhere you cannot see public housing in view? Must it be near the family? Near the in laws? To good schools? Walking distance to public transport and mrt stations? The fitness center? Your regular soccer buddies pitch? Pubs and clubs where you hang out? Convenient stores and supermarket? Eateries? Posh restaurants to entertain visitors? Clinic and hospitals? The vet or pet supplies store? The list goes on...

Depending on your priorities, you will find Location could mean very different things to different people, just like Lor Mai Khai. Good luck in your search for that ultimate house or snack that fulfils most of your (if not all of your) desires.

Tapas as Bite-sized Mickey Mouse Apartments

Lunching a few days back at the Pu Tien restaurant for Mother's day, the first dish was the quintessential cold dish with food samplings of interesting stuff. I shall not go into detail what those were, but little bite-sized morsels are often the starters or even the main course in many cuisines. I'm sure many of you would instantly think of Spanish tapas.

The trick is - if you're hungering for more yet want variety, tapas often do the trick. You get the fill, and you get the variety. Heck, you even get the choice. Choose what you want - when you want. Variety is great as a man without a choice is a dead man in a dead end.

That is the same reason why sales of MM apartments (or Mickey Mouse apartments - size of which are 500sf and below - as they are affectionately called) have continued to skyrocket. The magic word nowadays is 'low quantum' - nevermind if that meant 1600psf for a MM unit in Siglap. The absolute amount you can bite on, is still 500k! Developers (smart ones) will take heed and reconfigure the projects into more bite-sized quantum units. Even major condo grade projects can't resist including bite-sized MM units for the specu-vestors or maybe there is really too many lonely singles wanting to live on their own these days, what with the gradual westernization of asian culture. In any case, if you're hungry and have limited pocket depths, you will still have to eat. At least you can now choose something that won't give you indigestion.

Up Up and Away!

Last Sunday while collecting mail at my tenanted apartment, I figured since it was lunch time I might as well make my way to the Lavender food court for a change since my favorite Killiney kopitiam opposite my apartment is no longer in business. There, I ordered duck rice, and noticed the (famous) wanton mee store has nobody in the queue. I thought it was not open yet. Then at 12:03pm, a queue started to form and in 5 minutes it has grown from 5 people to like 15-20 people.

Locals will know this is typical of Singapore and Singaporeans. I have ever even been in a queue and someone join it behind me asking me what I'm queueing for after others have joined in behind him. And therefore the perfect display of 'herd mentality' which stems from the Singaporean essential attribute of 'kiasu' (afraid to lose out).

Look at the recent launches since Alexis / Caspian, and you will notice almost every project SOLD OUT in days if not hours. Optima even had queues form before the showflat is officially open. Can you imagine this madness - in a recession? Or are we already so sure prices are only going to go up with the impending completion of IR. Soon, 600psf in Bedok new launches will be a thing of the past - if not already - when Optima in Tanah Merah has seen prices of 900psf-1000psf. AMK had launched at 1200psf. Balestier is being launched for 1400psf as we speak. Soon, nothing will be below 1000psf.

Sure, one can say, the mata (policemen) also had to start wearing pants instead of shorts as Singapore progresses through the decades, so why not property prices? I'm just wondering whether this pace is too fast. Anyway, I'm not fast to complain, considering this market upswing helped me to 'get rid' of my odd shaped apartment at a very decent price - enough to buy 2 new better and regular-shaped ones.

Heck, for every willing buyer, there is a willing seller. Same goes for wanton mee even if the price is $5 - when everyone seems to be just queueing (or killing) for it.

Fish Maw Masquerade

My newly discovered haunt lies somewhere along Changi Rd, in an inconspicuous noodle house whose original owner still waits and serves customers after more than 30 years in the business. I personally have always liked fish maw - the springy texture and raw fishy taste is just irresistable. Be it expensive restaurants or road side stalls, none of those I've ever tasted matched neither the quality nor the quantity of the Fish Maw soup based noodles served by this noodle house. I've seen much better presentation and color of this dish in the past, but the true value and wonderful aroma of this Changi Rd shop chef's creation is truly bar none.

Since I'm on the topic of presentation and value, it occurred to me that shopping for a house for the main purpose of investment is not that much different.

There is this ultra modern and super luxuriously finished smallish (sub 500sf) apartment right smack in District 09, just 2 mins stroll to Somerset MRT, going for 2000psf. That is a cool $1 million. However, realistically, it can only be leased out for about $2500 max.

Then there's this shabby looking walkup apartment over 30 years of age, no where really near any MRT station, along a busy main road in East Coast, all 1200 square feet of it in original condition asking only $500K or 416psf. Surprisingly (or not), it is fetching the same amount of rental - $2500. How so? Well, it's got 5 bedrooms and each has been leased to individuals for $500 each.

There you have it. At half the price, you get the exact same rental revenue. Not only that, you mitigate your risk (lessen by 5 times) as your lease income is spread across 5 parties vs just 1. Imagine if your ultra-lux condo tenant bails out all of a sudden - you'd be left with $0 rental income until you find a replacement tenant, whereas it is quite unlikely all 5 tenants in your shabby walkup bail out at the same time.

You may say the capital gain is higher for ultra-lux Orchard apartments. Yes, for sure, but don't forget the possibility of your 30-year-old walkup being purchased en bloc. That is substantial capital gain opportunity for you.

So as they say, same for people, don't judge a dish by its mere presentation - the same goes for investment properties.

One 'So-So Char Kuay Teow' Leads to a 'Lor Mee Discovery'

Just the other day, I was queueing up for the famous Char Kuay Teow stall (I shall not say which) at Old Airport Road hawker centre. Based on what I heard so far, almost everyone sang praises. So I decided to pay the stall a visit. There were tons of (used) plates at the front of the stall. Interestingly, the stall opposite also had a similar kind of presentation. Anyway, the standard Char Kuay Teow I ordered was so so, nothing to shout about, nothing to complain about either. 

Unfulfilled, I pranced over to the other side of the hawker centre. There I sighted a long queue - a Singaporean kinda 'quality seal'. It was Lor Mee. And so I took my chances and queued like any other deserving Singaporean would. Sure enough, when it was my turn, I finally realised what the Q was about. One of the best Lor Mee's ever...

Of course, that is not the story. Yet the lesson learnt was representative of how the market is today. Not the wet market. The property market.

Recent news about some 'ideal' property management company (you would know who if you're in the business) partitioning en-bloced condo units up resulting in no access to washing or garbage disposal facilities led to the authorities turning up the heat on checks. Some other "park complex" - a long standing iconic building in Singapore history - has also been earmarked as abuse potential. In fact, abuse has already been occuring for a long time with the influx of foreign labour in recent years - particularly the Chinese. Apartment units were partitioned and then rented out, often on short term leases too. This brought the legislation to the light - that private apartment units are not to be leased on daily, weekly or month-to-month basis. The minimum lease according to IRAS is one year. (Obviously, if short term lease was allowed, they would directly compete with the hotel industry - like one 'Soho'-style condo in one of the culturally rich areas in Singapore.) In  fact, there is even a new term coined - Condotel. Actually, if you have been to Europe, the concept of Condotel, Apartotel or even Boatel is not new. I am sure you have heard of B&B (bed and breakfast) too. 

Anyway, so thus luck knocks on my leisure boat house - now the expat who either has been priced out of the market or cannot commit to stay longer than a month or two has an option. And a pretty cool option at that.

So what does this teach us? People may say "one good thing leads to another". I say, one bad thing may open up the opportunity for a good one.