HomeReal EstateUltimate Guide to Renting Out Your Property in Singapore
Ultimate Guide To Renting Out Your Property

Ultimate Guide to Renting Out Your Property in Singapore

Consider The Pros and Cons Of Renting Out Your Property

If this is your first time renting out the property and if it is for a short-term period of just one or two years tenancy, do consider whether the time and effort involved is worth going through the entire process. Lets take a look at some of the pros and cons of renting out your property. 

Pros Of Being A Landlord

1. Earn recurring cashflow and build equity

Being a landlord will make financial sense if renting out the property brings in more revenue than your monthly mortgage payments, taxes, insurance, and other fees.

During periods of high interest rates, the property should generate a recurring revenue stream to at least pay off the interest portion of your mortgage instalments so that you can still own your asset and hold it until the entire project hits your desired target.

2. Gain Experience And Confidence To Succeed As A Real Estate Investor

With enough experience, you will acquire the necessary knowledge to build your real estate portfolio be it in residential, commercial or industrial. In time, you will be comfortable with the numbers to know whether the investment will pay off and be able to forecast your exit point. 

3. A Property That You Can Fall Back On

This could be a property that you return to assuming that you are renting it because of an overseas job relocation or in the event you sell your primary home and find that this is more suitable for your retirement.

4. A Vested Interest In The Country's Economic Success

Depending on the geographical location where you invest in, you are directly investing into the country’s economic success.

For example, Singapore is a land scarce nation and it has the second highest GDP per capital in the world (2022). The government is ramping up infrastructure across the island and setting up several business hubs outside the city centre to reduce commute time for greater efficiency. This attracts multi-national companies to set up shop in Singapore as there is world-class infrastructure and a deep pool of skilled workers to tap on. 

Cons Of Being A Landlord

1. Equity Lock-up

Buying a property requires a significant amount of downpayment and it is prudent to set aside at least 6 months of reserve funds for rainy days (ie: unexpected repairs or prolonged vacancy). You would have to study the locale and surrounding projects to get a sense of whether you can exit the property easily when you need to. 

2. Handling Tenant Issues

It is common for a tenant to send you queries or require your attention to fix stuff around the house. So be prepared by having a list of reliable handyman, electrician and plumber in your phone book. 

3. Demand And Supply

Demand and supply will fluctuate. For example an international school may relocate its premises or new condos may take away your demand resulting in lower rental price for your property. Be fast and flexible to respond and take the necessary action to reduce the downtime.

Renting Out The Property

Whether you are doing it on your own or you have an agent to help you, it is good to know the steps involved to make the rental a smooth and enjoyable process.

1. Research Laws And Regulations

As a landlord, you must be familiar with the laws and policies that concern rentals, landlords and tenants. 

Take for example, a private property must be rented out for a consecutive three months and a hdb flat for consecutive six months. There are more restrictions for hdb flats, so do ensure that you do your research or find a competent property agent to assist you. 

2. Determine A Competitive Rental Rate

There are three parts to determine a competitive rate for renting out the property as you do not want to underprice or overprice your property. The first is to refer to recent rental transactions, second is the asking prices in your neighbourhood and third is to assess the actual number of enquiries and level of interest in the property. 

3. Advertise Your Property For Rent

There are several popular listing portals that property agents list properties for rent. You would want your listing to receive maximum exposure so that you can get enquiries.

However if you do not intend to engage a property agent, you can list on free to use platforms such as Carousell, Locanto etc. 

4. Respond To Rent Offers Quickly

It is a good practice to respond to the tenant’s offer as soon as possible so that they do not consider other properties. If there are terms to be negotiated, work it out with the tenant to achieve a win-win outcome for both parties. 

5. Screen Your Prospective Tenants

All landlords would like to have good tenants who do not give them any trouble during the tenancy. But there is no foolproof way to qualify the prospective tenants. One thing for sure is to check that their identification documents are valid such as their passport validity and to verify their employment pass or student pass with the Ministry of Manpower and Immigration and Checkpoint Authority websites. 

6. Prepare The Tenancy Agreement

Draft in any negotiated clauses or variations into the tenancy to prevent any future disputes. Do ensure important clauses such as no subletting, diplomatic clause, restoring the place to its original condition etc mirror your intentions. 

If you require expertise to draft the tenancy agreement, it is in your best interest to have a lawyer vet through the tenancy agreement to ensure the document complies with local laws and regulations. 

7. Onboard The Tenants

Ensure that the tenancy agreements and inventory list are properly executed. Each party should have a set of the documents and the responsible party should pay for legal stamping of the tenancy agreement within 14 days of the date of tenancy agreement. 

8. Prepare The Rental Property For Handover

Prepare the unit for handover by ensuring it is in a tenantable condition with no leaky faucets or flickering light bulbs etc. It is good to clean up the unit, dry clean the curtains and service the air-conditioners and provide a copy of those receipts to the tenant. 

The tenant is expected to handover the unit back to you in a similar condition save for wear and tear at the end of the tenancy.

9. Keep Proper Records

Request for the aircon service receipts from the tenant every quarter and keep track of the incoming monthly rental payments. 

10. Maintain A Good Relationship With The Tenant And Your Fellow Neighbours

Do attend to the tenant’s queries promptly especially if they are urgent in nature. This will give the tenant confidence that the property is well maintained and that the landlord is attentive and responsible. This increases the likelihood of the tenant renewing the lease with you.

You may also wish to give your fellow neighbours a heads up that you are renting out your unit and to inform you if they have any concerns during the period of the tenancy. 

Looking to rent out your property?

Here at The Landed Collective, we specialise in residential properties and that means HDBs, Condos, Landed Houses and New Developer Sales. 

Before you start anything, speak to us for a complimentary consultation as our property agent team will provide you with comprehensive advice, run through the current market sentiments, facts & figures and answer any questions you may have. 

Share:

error: