Neighborhood Watch: Lease real estate in innovative ways

There has been a preponderance of landlords lately who expect their property to lease with the same ease and rates as in the past.

This may be the case for a few specific properties, but the general trend has changed due to less demand, along with an over supply of property in general.

On many occasions we have had a landlord requesting us to rent a property, only to be called the next day expecting a signed lease from a new tenant.

Obviously, not all landlords are naïve with regard to the market, but it proves the point that landlords have enjoyed a buoyant market for many years.

It may be time for those property owners who are having difficulty in finding tenants, to look for innovative ways to lease their property instead of assuming the agent is incompetent.

Once it is established that the agent is experienced, it is important to look for realistic reasons why the property is not moving. There can be multiple reasons for this, not the least being the rental rate.

Others include over supply of product, September 11, the global economy and perhaps fluctuating oil prices. Certainly the present Middle East situation potentially compounds the problem.

The property supply is dependent upon new businesses coming into the area and unless we see a resurgence of this activity, then landlords will be dependent upon renting their villas through the harvesting of tenants from similar properties by making better offers.

For the past two months there has been an obvious reduction in the numbers of new people moving into Dubai and looking for accommodation.

As long as this situation prevails there will be more empty villas, apartments and offices and should it further continue then it is likely we shall see more lateral moves.

One will quickly become aware of better offer on other premises, perhaps better location, less rent and other amenities that will encourage a tenant to make a move.

In this event, those landlords with empty property may seriously consider taking steps to encourage new tenants, and one of several ways is with respect to the payment of the agent's service fee.

It is a definite incentive to a potential client if he knows he does not have the extra expense of paying a commission.

Proactivity on the part of both landlord and agent may help to improve this situation and lead to successes for landlords who are dealing with this problem.

Offering extra parking, a rent-free month, and assistance with partitioning in the case of offices, the provision of floor coverings, and perhaps appliances may make the difference between a property being occupied or remaining empty.

There are many ways of increasing the possibility of leasing a property but there is also a cost that is generally recaptured in the long run. Every day a property is empty, the owner loses money.

We all know that real estate markets are cyclic and associated with the global economy. With a maturing market such as we are seeing in Dubai there is no doubt we shall experience these cycles as an intrinsic component of the growth process.

The author is the managing director of Dubai-based Better Homes LLC. Your views and questions can be sent to Gulf News, PO Box 6519, Dubai. Fax: 3441627. E-mail - editorial@gulf-news.com