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Renting an apartment...scared of being taken for a ride.

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Iamunique

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Joined: Apr 19, 2008
Posts: 30
Location: Shanghai
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Posted: Aug 21, 2008 - 06:10 PM
Post subject: Renting an apartment...scared of being taken for a ride.

Hi Everyone,
I have decided to move into an apartment. It is in the Huangpu district, 3 bedrooms, 2 bathrooms, fully furnished 7000per month.
I am being charged a 35% letting fee which I feel is very high and am also being asked to pay 350 extra a month so that I can recieve an official invoice each month when I pay my rent (this is for business purposes).
On top of that I am being asked to pay the building management fee.
I pay for all utilities + internet.
I am being asked to pay 2 months deposit and 2 months in advance.

My gut is telling me that this is not right. Can anyone tell me if I should give it a miss? Also, is it normal to be asked for a deposit immediately so that the Landlord promises/holds the apartment to you?

Any advice would be appreciated.

Thanks.
p.s. I haven't signed anything yet.

L.M.

Reacher

Joined: June 05, 2007
Posts: 264

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Posted: Aug 21, 2008 - 06:29 PM

1.) 35% is the normal agency fee.
2.) 350 RMB extra is the 5% (?) tax that the landlord/lady will have to pay if you want a receipt. Again, normal.
3.) Paying building management fee, also normal. A lot of apartments in Shanghai ae advertised without the management fee included.
4.) 2 months deposit + 2 month advance seems is what is normally asked for these days. You can, however, try and discuss that you pay perhaps 2 month deposit, one month advance. It all really depends on the apartment though. If the apartment has a lot of expensive furniture ect. then they will most likely not budge on this requirement.
5.) Paying a small fee so that the landlord/lady will keep the apartment for you is also normal. Otherwise how can they possibly trust that you will come back to sign the agreement?

Conclusion: Stop being paranoid. All is normal and in my opinion quite fair. What may not be fair is the rental fee, depends on how well you bargained and how well you know the Shanghai real estate market.

hc
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Joined: Apr 04, 2007
Posts: 4545

Posted: Aug 21, 2008 - 06:43 PM

all completely normal.

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Mr Totomolo

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Posted: Aug 21, 2008 - 06:58 PM

Quote:

I am being asked to pay 2 months deposit and 2 months in advance.

Lot of landlords request 1 month guarantee, and 3 months rent in advance; and then you will be required to pay the rent by quarter.
I was renting an apartment of 3 bedrooms/2 bathrooms on 31st floor (great view 2 elevators) in Huangpu (yaojiang garden) at 4800/mnth management fees included.
This year, the landlord got big head and wanted to increase to 8000.
So moved to Liyuan road, great community, better neighbourhood (century brand supermarket at 50 meters) same surface 140 sqmt, only one bath but with jacuzzi and massage shower , 5000/month

maybe you can bargain the management fees included (in a nice compound, it usually runs around 350/month)

Last edited by Mr Totomolo on Aug 21, 2008 - 07:01 PM; edited 1 time in total

Michael

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Posted: Aug 21, 2008 - 06:58 PM

The small fee for holding it to the landlord should go against your rent or deposit

Iamunique

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Posted: Aug 21, 2008 - 07:15 PM

Wow, I feel a lot better now. Thanks everyone. I will put my negotiation skills to the test and get the management fee + 5% tax included in the rent.
Thanks again! Smile

L.M.

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Joined: June 05, 2007
Posts: 264

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Posted: Aug 21, 2008 - 07:49 PM

You can try, of course. Good luck. However, if the landlord/lady won't budge then rest assured that all is very normal. Just hope that the apartment is still there. My experience has been that if you wait a day or two then it is gone.

monalisalee

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Posted: Aug 21, 2008 - 08:25 PM

In the 4 places, I have rented I have NEVER paid more than one month's rent in advance, nor EVER more than one month's returnable deposit. This is very negotiable. The 35% is normally the agents fee, with the landlord paying another 35% to the agency.
I do not see why you should be paying for the landlords tax, which he is responsible for.
All apartments have building fees, but again the landlord is legally responsible for that, and would normally be included in your rental. I have NEVER had to pay buiding fees as an add on. The buiding fees are legit. as it covers costs related to elevators, entrance and hallway maintenance, and for the two security guys asleep at the gateway. So generally disagree with some of above. Your rent is not cheap, which depends on a lot of things, but leaves some room for negotiation without the 'add ons'.

As an aside, I heard of a rented apartment today, where the renters, who had paid a 2 months deposit, left early, losing the deposit, but stripping the apartment of ALL furnishings, and even took pipes off the wall, then disapeared into 20 million people. This is one of the reasons why landlords will try to get at least 2 months deposit. Case of one bad penny spoiling it for the rest of us.
John.

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johnboy88

freedelia

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Posted: Aug 21, 2008 - 08:41 PM

I agree, never paid tax for the receipt (it is their legal responsibility to pay tax for what they get from you), or the management fee. Also, if the rent is over 1000 USD, the landlord has to pay ALL the agent's commission.

The deposit and frequency of the payments can be negotiated as well.

monalisalee

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Posted: Aug 22, 2008 - 12:05 AM

Yes, spot on. The trouble is, where a rental is actually being paid by a company, who employs the person renting, they will require a receipt (for their own tax returns), so the landlord, having to give a receipt, will try to pass it on to the renter, because he/she would rather get cash, and avoid paying tax. Scam really.
My 4 landlords were wonderful, and always called in to pick up their rent, each month, but always phoned first, and this gives them a chance to check the place out, which I welcomed, also to clear up any minor problems that may arise.
Sometimes I think people renting deserve the landlords they get.

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johnboy88

monalisalee

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Posted: Aug 22, 2008 - 01:27 AM

Hey, Kat, 2 questions. Where are you from in N.Z.? Please dont tell me Invercargill, or Westport. Are Nielson paying for your rental?.

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johnboy88

RussianBear

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Joined: June 25, 2008
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Posted: Aug 22, 2008 - 01:46 AM

for my understanding 3500 rmb - is normal rent for good placed furnished appartments in Sh.

7000- toooo high. Except that - all normal.

monalisalee

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Posted: Aug 22, 2008 - 01:55 AM

Nah, Big Bear, he's talking 3 bedrooms, 2 bathrooms. You dont get that for 3500, even in the burbs. Except that - all NOT normal.

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johnboy88

RussianBear

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Posted: Aug 22, 2008 - 02:07 AM

Hmm.. 3500 for additional bathroom seems me no reasonable.

monalisalee

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Posted: Aug 22, 2008 - 02:25 AM

Yep, one bathroom is enough, but prices are usually based on number of bedrooms. In this case 3. So if you know of an apartment for 3,500 with 3 bedrooms, please let me know. I can sell that. No prob.

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johnboy88

L.M.

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Posted: Aug 22, 2008 - 03:45 AM

monalisalee wrote:

In the 4 places, I have rented I have NEVER paid more than one month's rent in advance, nor EVER more than one month's returnable deposit.

Depends on the place and the landlord/lady. Some don't budge, if that is the case then you have the right to move on if you don't agree.

monalisalee wrote:

I do not see why you should be paying for the landlords tax, which he is responsible for.

You don't seem to understand. The landlord/lady advertised the flat knowing full well they would not be paying tax. Tax is a cost and that cost was not factored into the apartment pricing equation. This is a good thing for apartment hunters as it gives them the opportunity to pay a 5% lower rental fee or a 5% higher rental fee for the receipt. So, if you think the landlord should be paying the tax, fine, however you apartment is now 5% more expensive. Understand?

monalisalee wrote:

All apartments have building fees, but again the landlord is legally responsible for that, and would normally be included in your rental. I have NEVER had to pay buiding fees as an add on.

You probably rent cheap apartments, in this case the management fee is usually included. However, in more expensive apartments the management fee is usually not included in the price. You want it included in the price??? Fine, the advertised apartment is now 350 RMB more expensive. Simple, eh?

rxg

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Posted: Aug 22, 2008 - 09:20 AM

The whole rental thing in Shanghai is so confusing and so very stressful. I never have to pay for rental fee, the landord pays for it, propobly pays for her agent fee too. This might means 2 months of rents she give up.

I would rather have fewer rooms but bigger size rooms.

The problem in China (generally speaking) is no body trust anybody, including landlords and renters. Ranter don't keep their words and landlords don't keep what they promised.

rucksack

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Posted: Aug 22, 2008 - 10:02 AM

monalisalee wrote:

All apartments have building fees, but again the landlord is legally responsible for that, and would normally be included in your rental. I have NEVER had to pay buiding fees as an add on. The buiding fees are legit. as it covers costs related to elevators, entrance and hallway maintenance, and for the two security guys asleep at the gateway. So generally disagree with some of above. Your rent is not cheap, which depends on a lot of things, but leaves some room for negotiation without the 'add ons'.John.

I agree that you should negotiate the building fee. I pay a similar rent on a similar sized place and I don't pay that fee. However, if maintenance comes to fix something I pay the 10RMB labor charge. If there is something broken that I replace, I keep the receipt and hand it to my landlord for reimbursement. You should also talk to them about painting every year or so (paint jobs are often cheaply done and need to be done every year). We've had such a terrible paint job done that she's had to repaint every year until we talked to her about doing a better job with better paint. Sometimes they don't look ahead.

yu888
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Posted: Aug 22, 2008 - 10:25 AM

The problem is that most listing are done on price so the listings usually exclude all the fees, with exception to more expereinced landlords who just package it all together and figure the more sophisticated renters wil "get it" But in the lover price ranges, the typical renter will for-go the 5% fapioa for the savings so thus the system of not including that into the rent. management fees range widely per different complex.

Best bet is when negotiating or even inquiring, ask what the rent is, payment terms are, management fees are, and fa piao fees are, then ask to see what can be inclusive nad what not. then you have all the info to make an informed decision. Monalisalee has been very lucky in getting good landlords so his world is the ideal situation..but still new renters need to be warned what the real world can be like. Good luck.

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Wasabichez

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Posted: Aug 22, 2008 - 02:14 PM

How big is the 7000RMB a month apt??? And is it in a decent community? Sometimes prices are lower because some things aren't packaged in.

If after calculating in the additional costs you will have to pay to cover things like internet and utilities, against your potential savings, then you may still end up in a better situation because you can manage your spending, AND you won't need to bother blaming the landlord for jipping you because you can manage your costs on your own accord.

Wasabichez

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Posted: Aug 22, 2008 - 02:33 PM

freedelia wrote:

1) I suppose the standard rental formula renters expect is: rental-tax-monthly management fee=net amount the landlord ends up with.
So either a landlord might offer a 5% discount if no tax receipt is needed, OR the rentor should calculate in an extra 5% to understand the real rental that they should be expecting if they need the receipt for business purposes.

2) Is it a moral industry practice that rent over 1000USD requires the landlord pay all the commission? or is it a legal govt. policy that states so?

3) All my experiences, once it is a company signing for the rent then most leverage for deposit and frequency of rental payments is put aside because it really isn't the tenant themselves who are footing that expense.

freedelia

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Posted: Aug 22, 2008 - 06:30 PM

1. Yeah, I guess this is right -- usually the landlord will not declare the money he is getting from you to avoid paying tax and if they need to do it, they will somehow want to get you topay for it, so they will increase the rent. However, I think that if you negotiate well, offer to sign a longer lease,to pay less often, to sign and pay right away, etc, they are more likely to give in and not charge you the 5%

2. I am not sure what this is or even if it is still true, with all the rents going up lately. But I know that a few years ago, when we first moved to Shanghai, the agent told me that if we choose an apartment over 1000 USD (8200 RMB back than) we would not have to pay the commission.

3. I think in most cases when the company pays for housing, the tenants don't really bother to negotiate too much...

monalisalee

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Posted: Aug 23, 2008 - 03:49 PM

L. M. wrote:

Quote:

monalisalee wrote:
In the 4 places, I have rented I have NEVER paid more than one month's rent in advance, nor EVER more than one month's returnable deposit.

Depends on the place and the landlord/lady. Some don't budge, if that is the case then you have the right to move on if you don't agree.

monalisalee wrote:

I do not see why you should be paying for the landlords tax, which he is responsible for.

You don't seem to understand. The landlord/lady advertised the flat knowing full well they would not be paying tax. Tax is a cost and that cost was not factored into the apartment pricing equation. This is a good thing for apartment hunters as it gives them the opportunity to pay a 5% lower rental fee or a 5% higher rental fee for the receipt. So, if you think the landlord should be paying the tax, fine, however you apartment is now 5% more expensive. Understand?

monalisalee wrote:

All apartments have building fees, but again the landlord is legally responsible for that, and would normally be included in your rental. I have NEVER had to pay buiding fees as an add on.

You probably rent cheap apartments, in this case the management fee is usually included. However, in more expensive apartments the management fee is usually not included in the price. You want it included in the price??? Fine, the advertised apartment is now 350 RMB more expensive. Simple, eh?

Yes, I do understand as I worked in real estate in Shanghai, and learnt a lot in a short time. HAVE YOU?
I understand the landlord is liable for his/her tax, and will try to get the tenant to cover that cost.
As we know if you don't like total rent cost you can walk.
Yu is right, I have been lucky with my landlords, but I see nothing wrong with aiming high, and maybe settling for something less. Also I have also had good, helpful contacts and agents here.
You mention 350 as a management fee, and I stayed in a compound where the fee was about 300/ month. But I did not have to pay that. Yes, it is usually built into the rental.
My present management fee is RMB 80 month. Of course I pay that as I am the owner of the apartment. You can see that there is a HUGE variation. I do not live in a cave. The building is 4 years old, 20 floors, 2 elevators 160 apartments, and very good security, but is in a Chinese area, where everything seems to be cheaper.

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Adrienne

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Posted: Aug 26, 2008 - 04:23 PM

Gotta agree with Monalisalee. The vast majority of our deals are management and tax fee included in the rent. The only variable would be a client who doesn't need a fapio thus reducing the rent immediately by 5%. It is all pretty straight forward. Other items are negotiable of course.

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Bella_Min

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Posted: Sep 01, 2008 - 02:50 PM
Post subject: Re: Renting an apartment...scared of being taken for a ride.

Iamunique wrote:

1. The landlord has the obligation to give you an official invoice monthly, without any charge on you.
2. The commision should be paid by landlord.
3. Paying 2 months deposit and 2 months in advance is normal, and the deposit before you signed the leasing contract will be reimbursed once the contract is signed.
4. Utilities fee like electricity, gas, water is to be covered by tenant, but internet fee, management fee, and the cost for satlellite TV installation should be negotiable.

There're many good property agencies in Shanghai. Just head for another one if this one can't do what you could accept.