Buying land or property: Restricted to Myanmar only, at least for now
The government of Myanmar does not allow foreigners or non-residents to own land or property in the country. This measure includes apartments and condominiums, although this is expected to change if and when the government passes a much-rumoured condominium law, which is likely to occur before the end of 2014.
The condominium law is likely to be similar in nature to that in place in Bangkok – meaning foreigners will be able to buy apartments but only those above the ground floor. Early drafts of the law included provisions that seemed to suggest that foreigners would only be allowed to buy apartments or condos in buildings taller than five storey’s high, which would rule out beautiful looking but legally contentious colonial-era apartments in the downtown area.
When leasing a property from a private owner, you will almost always be required to pay a commission equal to one month’s rent to the agent/broker that found the property. This means for a 12-month lease, you will also be required to pay a fee equal to a month’s rent to the agent as a commission. Some agents who have direct contact with the owner – and are not working with other brokers – will only charge either the landowner but it’s always best to ask what the fee will be before agreeing to look at properties.
In nearly every instance the landlord will require payment of the lease in cash or telegraphic transfer on the day the lease is signed. Some landlords will accept bank transfers if they have accounts abroad but this is an exception, not the norm. However, the higher the rent the greater the likelihood that the landlord will have a foreign account and will accept a banking transfer. Some landlords will also accept an initial payment for the lease, usually six months and expect the remainder of the lease to be paid within an agreed period.
Foreigners can sign longer-term leases for properties but this carries an element of risk: According to existing Myanmar law only 12-month leases are enforceable in court. Many landlords are happy to sign longer-term leases but will expect to see a price escalation of at least 10 percent in subsequent years. For the most part these leases seem safe but we would urge caution, especially in cases where the tenant is investing their own money into bettering the property, thereby increasing its rental value.
The traffic is here to stay
Many incomes are rising in Myanmar and car ownership will continue to rise, so it is naïve to think the traffic will lessen. In most cases it will cost more to live close to the office and the best schools but doing so will certainly save you time and nobody likes being stuck in traffic for two hours a day.
The right landlord makes a big difference
A well written lease is a very handy document but an equitable landlord is better still. When there is a problem at the property a landlord who cares about the site will get the issue handled quickly and properly. If we know that the landlord is going to be abroad or out of contact regularly, we will make sure to get the chain of command for problem solving clearly understood by all parties.
And so does the right tenant
As a landlord the last thing you want is a tenant who does not respect your property. And replacing heavily damaged wooden floors can be an expensive business, even in Yangon. Our clients are INGO employees, mid-level corporate employees and company managers – many of whom own their own properties abroad and know the feeling of leaving somebody else to look after a house or apartment and will show the same respect.
Be honest: if you want to ask something, earlier is better
Paying rent in Myanmar is intimidating – a minimum of 6 months upfront leaves a tenant in a somewhat vulnerable position. As such, we cannot overemphasise how important it is to get the property into the state you need it before the lease starts. If something about the property worries you, ask ahead and get it fixed early.
But if you like something, make up your mind quickly
There are lots of people looking for properties in Yangon – if you like something and you’re ready to take it, say so quickly and we will arrange a deposit payment (usually a month’s rent or less depending on the landlord) and accompanying contract. If you are in a rush ask us to prepare a deposit contract that can be presented on the spot, with the deposit paid later that day. It is an aggressive market and most landlords can be swayed by cash, even if a verbal promise to hold a property has been made earlier.
Condo or apartment: What’s the difference?
Those coming from Singapore or Bangkok are likely to have lofty expectations of what constitutes a “condominium” such as a swimming pool, tennis court, parking and recreational areas. But barring a few exceptions scattered across the city that do offer these luxuries, there is only one major difference (other than price) between condominiums and apartments in Yangon – an elevator.
Few apartment complexes, especially those built more than 10 years ago, have elevators, whereas the condominium blocks do.
What else do you get with your condominium? Well, for a start you will be expected to pay a monthly fee that covers the provision (normally) of water to your unit, elevator maintenance fees, security and the cleaning of common areas. In most instances the fee is fairly small – between 10,000 and 20,000 kyat (or US$10-20) a month but can sometimes be higher. Should a major expenditure be required – such as the replacement of a broken elevator – the repair will most probably go direct to the landowner and renters are not required to pay those bills. However, smaller charges such as the purchasing of fuel to power generators to operate the elevator when the electricity supply is off will inflate monthly service fees, sometimes significantly.