Landlords give gifts to retain tenants
Compared to 1,712,798 expatriate workers at the end of 2019, there were 1,443,128 in December 2020
Muscat – With a large number of vacant rental properties, tenants are becoming more demanding, while landlords bend over backwards and offer gifts to welcome and retain tenants.
Some landlords offer free Wi-Fi and others give a one-month rent waiver, while others are on their guard to provide any maintenance requirements immediately.
âTenants’ expectations are higher and higher due to the oversupply of rental properties in the market. Now they expect the owner to replace the leaky faucets in a day or two because they know they will find a cheaper and better property on the market, âsaid Ihsan Kharouf, director of Savills Oman.
Mohammed Hidayatullah, building supervisor at Ahmed Industrial & Contracting Enterprises, said his company included full maintenance in rental contracts. âWith market conditions in mind, we have reduced rents by about ten percent for all of our tenants. We also offer discounts on rents whether paid quarterly or annually in advance.
The real estate market has been burdened by the combined effect of the pandemic and the massive exodus of expatriate labor. Compared to 1,712,798 expatriate workers at the end of 2019, the number fell to 1,443,128 in December 2020, according to the National Statistics and Information Center (NCSI).
Retain and attract
Tenants are happy that landlords are more sensitive to their grievances.
For Mr. Ali, a resident of Ruwi, the pandemic has forced his company to cut wages, exacerbating the misery of delayed wage transfers, which has forced him to negotiate with its owner.
âSurprisingly, the owner’s response was polite and understanding. For the first time our owner visited us and asked if maintenance was needed.
Ali got a 20 RO reduction in his monthly rent and a one month rent waiver for the renewal of the lease.
Another tenant, Abdul Salaam, recently moved to a four bedroom villa in Ghubra from a three bedroom apartment in Al Khuwayr. The building in which Salaam resided was almost empty and the maintenance of the building deteriorated day by day.
âSince the start of the pandemic, maintenance has started to take longer and sometimes they have removed equipment from vacant apartments to replace them in tenant apartments. “
He finally decides to move and finds a villa that meets his needs and in the neighborhood of his choice.
âHomeowners today are more flexible compared to the days before the pandemic. With a little more money we live in a better environment. Since the schools are now online, there is an opportunity for physical activity for the kids and for us here. “
In addition to the economic slowdown and job losses due to the pandemic, the removal of electricity subsidies added to homeowners’ woes.
âPeople allocate a combined budget for electricity, water and rent. When someone’s electricity bills double, it is obvious that they are trying to balance them and no one can reduce the use of electricity or water. The only option left is to either renegotiate the rent or move to a cheaper apartment to manage the budget, âsaid one tenant looking to move to reduce his monthly expenses.
Kharouf, of Savills, believes landlords who attract tenants survive and see high occupancy rates.
âHomeowners can choose the response they want. They can rent properties at a slightly higher rate than the market with 60% occupancy, or if they want 100% occupancy, they have to keep it slightly below the market rate.
âThey have to remember, however, that there are about 70,000 more empty units in the city. Even if they are offering the property below the market rate, there will still be plenty of vacant units for rent.
While some owners do offer freebies, “heavy investments like providing air conditioners don’t happen in older properties,” Kharouf said.
Hidayatullah’s company manages around 400 apartments and is doing well giving gifts.
âThe occupancy rate is close to 100%, with only six vacant apartments. We find new tenants within a maximum of three months, âhe added.
To retain and attract new tenants, the Hidayatullah company plans to provide free air conditioning maintenance and free internet access.
âWe have always provided free maintenance and now, since the removal of electricity subsidies, we are even replacing old equipment with more efficient electrical equipment. “
Ali remarked: âAcquiring new tenants is difficult in the current situation. I think the owners have figured it out now. This was not the case before. “
For Kharouf, âwhatever movement is happening in the rental property market, it’s like musical chairsâ.
He hopes that with the resumption of flights, the newly recruited expatriate workforce will begin to settle in the country, bringing some relief to the rental property industry.