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Short-Term Rentals for Property Agents

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Vacation Rentals 101

1. Vacation rental (VR) homes are fully furnished residential propertyrented out for a duration of 1 day to 3 months mainly to tourist. Theycan either by owner-occupied or vacant properties.

2. The proper management of a VR requires someone to check the guestin, check the guest out, and organize for housekeeping. Basichousekeeping should be performed before and after.

3. A vacation rental with full occupancy will always have a higher rate ofreturn versus the identical property on long-term lease

4. Vacation rentals have been formally practiced in Europe since the1970s. The U.S VR industry emerged in the 80s. Estimated as 1/5 aslarge as hotel industry in U.S in 2010.

5. It is generally viewed by Europeans and Americans as a way to

achieve better value for money on vacation accommodation. (For morespace or for more luxury for same amount spent)

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BUSTED Myths about short-term rentals in SG

1. It is illegal in Singapore for private property- INCORRECT

Strictly speaking, the URA guideline that leases under 6 monthsare not allowed is not law but a mere guideline*. It has never beencodified in a statutory instrument.

2. It is dangerous INCORRECT

99% of bookings are hassle free. For the 1%, there is security

deposit feature to minimize risk.

3. I do not have to pay tax on income INCORRECT

Please make sure you declare income from short-term rental on

your yearly income tax assessment

*: Professionally advised by large law firm.

Clarified by URA in Straits Times on 26th May 2012 (See Appendix)

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Sales

1-2 yearlease

Vacationrentals

Volume

Low

Medium

High

Large

Transactionsize

Medium

Small

Property agent tool kit

Short term rentalsare a more

STABLE source ofincome than salesAnd long term

leases

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Which properties to target?

1. Private Properties. HDBs are a no no

2. Furnished properties in the process of seeking longterm renters, especially those that have been on themarket for a long time

3. Absentee landlord properties: Furnished properties wherethe landlord does not stay there most of the time

Centrally located properties are preferred by tourist andcommand a higher rental, so focus on these.

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$125 The average per night dollar amount a room in District 9,10,11 charges for a new condo thatTOP after 2005

75% The average occupancy rate of vacation rental apartments in Singapore

$2,800 The estimated monthly earnings of a property agent assuming 75% occupancy rate ,10property listings, $50 per night rate and 20% markup.

0% The percentage charged by PandaBed to list a property on our website

0%The percentage charged by PandaBed during our promotional period which ends

31 December 2012

10 The number of minutes it takes to list a property on our website

Short-term rentals by the numbers

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How to Get Started

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STEP 1: CONVINCE YOUR CLIENT

1. Highlight to him that IT IS LEGAL

2. Tell him that it is better to earn some income than noincome while awaiting to secure a long term tenant.(The moment he finds a long-term tenant you can switchoff the listing on PandaBed.com so you will receive no

more booking request.)3. Remind him that short-term lease means viewings are

easy to schedule because tenants come and go almostweekly.

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STEP 2: AGREE ON A BASE RATE WITH OWNER

AFTER your client agrees to open his home for vacationrentals, then do the following:

Agree with the client on the base per nightrate.(Start low. Use 40% of average hotel

rate in area)

One BR in River Valley goes for about $70-$120 SG per night.Depending on the age and condition of property

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STEP 3: GETTING THE HOME IN SHAPE

Advise your client to get theapartment/house furnished and livable.Make sure utilities turned on, bed and

furniture in good condition, fresh bedsheets, Aircon workingetc. (Thismight take a few days)

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STEP 4: DECIDE ON A MARKUP % AND LIST YOURPROPERTY ON PANDABED

List your clients apartment onPandaBed.com at your markup price

Once you list your property now wait for someone to book your property

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Example

Mr. Wong has a 3 BR apartment in the Tanglin area which has notbeen able to find tenants for 6 months.

Joey, his property agent convinces him to turn it into a short term

rental. Before listing on PandaBed, Mr. Wong gets the apartment furnished

with IKEA furniture, turns the utilities back on and gets its cleaned.

Mr. Wong asks for US$300 a night, considering the good location and

size of the property. Joey, applies a 20% markup and lists the property for $360 a night

Joey receives a booking for 5 nights

After collecting the payment he passes US$1500 to Mr. Wong and

pockets US$300 as his share

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How to attract bookings to your listing

Use nice photos of the home

(Call us if you dont have a good camera we will take free photos onyour behalf)

Enter a COMPLETE DESCRIPTION of the property (Describelocation, Nearest MRT, tourist attractions, amenities, house rules)

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Conclusion

Short-term rental arrangements are legal in Singapore

They are a more stable source of income than sales and long termlease income for property agents

Property agents should target properties in the process of seekinglong-term renters and those with single room rentals

A property with 10 short-term listings can expect to earn about $2800per month

After convincing you client, advise him to get the home in shape,decide and your own markup and list the property on PandaBed.com

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Appendix

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Article from Straits Times

The Straits Times, Published on 26th May 2012

THE Urban Redevelopment Authority's (URA) guideline on leasing and subletting of residential properties is

not a 'ruling' ('Two concerns over URA's leasing rules' by Associate Professor Kelvin F.K. Low; Tuesday).

We issue guidelines from time to time to provide transparency and clarity on how the URA exercises its

functions under the Planning Act.

The guideline in question, which states that residential properties are meant for longer-term stays of six

months or more, is intended to safeguard the amenity and residential living environment of a development,

and to ensure that residents are not adversely affected by the frequent turnover of transient occupiers on

short-term stays.

The guideline was put in place in response to complaints and feedback we have received from residents.

In considering whether enforcement should be taken against any unauthorised use, the URA will take into

account this guideline and all circumstances of the case.

As for Prof Low's example of the continued use and occupation by the seller of a property on a leaseback

arrangement of less than six months, such continued use, although on a short lease period, is still residential

in nature given that the seller remains as the occupant.

We thank the writer for his views.

Han Yong Hoe

Group Director (Development Control)

Urban Redevelopment Authority

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Get in Touch

Visit Us: www.PandaBed.comOR

CALL US: +65 96430384SNAIL MAIL: 3 Canton St, #02-01,

Singapore 049745