Even though small, Singapore is the home of wonderful properties. From subsidized public housing flats to private condominiums and rare landed properties, this country features a wide assortment of innumerable housing options. Though, buying a property in Singapore is no easy. Aside from choosing the perfect location, deciding on the right housing type, picking out the best amenities and selecting the appropriate tenure – properties in Singapore are notoriously known for being exuberantly expensive.
But after all the hard work and endless nights of figuring out your finances, owning a property in Singapore can give you a generous investment returns. How? By renting out or leasing your property. Renting out your property can yield a passive income that is both substantial and sustainable. How to rent out new property Singapore is actually easy, that is if you know the rules and regulations to follow. Check out this guide for the basics of renting out your private condo or HDB flat.
How to Rent Out New Property Singapore – Requirements & Eligibility
Landlord requirements and eligibility conditions for renting out HDB flats:
- You must be a Singapore Citizen.
- Singapore Permanent Residents are only allowed to rent out rooms but NOT the entire flat.
- Have fulfilled the Minimum Occupation Period (MOP) of 5 years.
- If the flat is purchased from the open market without housing grant before 2010 August 30, the MOP is 3 years.
- Singapore Citizens who have NOT fulfilled the MOP are only allowed to rent out rooms.
- You must apply for HDB’s approval if renting out the entire flat.
- You may rent out bedrooms without HDB’s prior approval only if your flat is 3-room or larger.
- You must notify HDB within 7 days of the date of lease.
- You must notify HDB for tenancy terminations, renewals and any changes to tenant’s particulars within 7 days of commencement.
Landlord requirements and eligibility conditions for renting out private properties:
- Approval is NOT needed when renting out private properties.
- Short term rental of less than 6 months on a daily, weekly or monthly basis is NOT allowed.
- Whole unit and individual room rental is only allowed for long term stays of more than 6 months.
- Internal partitioning to create more rooms is NOT allowed.
- Each occupant should have at least 10 sqm of space.
- The maximum number of allowed occupants is 8, regardless of unit size.
- If the owner is living within the premise, he is included on the head count.
Renting Out Property Singapore – Subletting & Maximum Number of Allowed Tenants
Renting out HDB flat and private condos has a minimum and maximum subletting period that all landlord needs to follow. The minimum rental period for each tenant applicable for both HDBs and private properties is 6 months. On the other hand, the maximum subletting period for HDB flats is 3 years per application. But if one or more of your tenants is non-citizen non-Malaysian, meaning they are Singapore Permanent Residents (SPR) or foreign passport holders, the maximum subletting period is set at 1.5 years.
To have a good ethnic mix, there is only a number of allowed SPRs and foreigners to rent on each neighborhood and block, this is called the Non-Citizen (NC) Subletting Quota. The current quota is capped at 8% at the neighborhood level and 11% for the block level. If the said quota has already been reached, only Singaporeans and Malaysians are allowed to rent a flat in the area. Note that this quota does NOT apply for subletting bedrooms.
Maximum Number of Allowed Tenants
When renting out property Singapore, keep in mind that there is a maximum number of allowed tenants depending on the flat type. This is done to avoid overcrowding issues and nuisance with the neighborhood. Check this table below for more details.
Total Number of Allowed Tenants
1 & 2-room (must be rented out whole)
|4-room and bigger||
Remember that all owners and authorized occupiers are included on the headcount. For landlords subletting rooms, they must continue to live in the flat together with the tenants for the whole duration of renting out. The living room, household shelter and utility room cannot be rented out.
Requirements and Eligibility of Tenants
Now that you know the basics on how to rent out new property Singapore, it’s time to determine the requirements and eligibility of your tenants. You can’t simply accept all tenants who are willing and able to rent your unit. There are certain regulations you need to follow that when ignored can actually jeopardize your status as a landlord, put you in jail, and worst have your property taken back by the authorities.
Tenant requirements and eligibility conditions when renting out:
- Must be a Singapore Citizen
- Must be a Singapore Permanent Resident
- Non-citizens must hold any of the following valid documents:
- Employment Pass
- S Pass
- Work Permit
- Student Pass
- Dependant Pass
- Long-Term Social Visit Pass
- Passes must have a validity period of at least 6 months from the date of rental application
- Work Permit holders from construction, marine and process sectors must be Malaysians
- Tourists are not allowed to rent out HDB flats
- Landlords must double check the immigration status of foreigner tenants
Process on How to Rent Out New Property Singapore
Contrary to the common belief, subletting your private property or HDB flat to gain passive income is actually simple. Renting out your property can be accomplished in 8 easy steps. Check out the detailed rental process after the jump.
1. Set your asking price and advertise your flat on the internet, newspaper or through real estate agents. Make sure to engaged only with registered salespersons and use the CEA prescribed Estate Agency Agreement to make a contract between you and the agent.
2. List your property and screen prospective tenants. Make sure to check the NC Subletting Quota of your unit to further assess the roster of possible renters.
3. Check the eligibility of your tenant and conduct viewing at the most convenient time. For potential tenants who will try to bargain the asking fee, negotiate the price accordingly.
4. Upon agreement with the tenant, collect the Letter of Intent (LOI) and good faith deposit. The LOI is an offer from the tenant who wishes to rent your property and should include the following details:
- Name of tenant
- Tenant’s NRIC or passport number
- Duration of lease
- Monthly rental
- Expiry of LOI
5. Before commencement of the lease, obtain approval from the authorized agency if necessary:
- For renting out whole flat – prior approval from HDB is required.
- For renting out bedrooms – approval from HDB is NOT required but you must notify them within 7 days before the date of subletting.
- For private properties – approval is NOT needed.
6. Upon approval, you must accept the tenant’s offer and prepare the Tenancy Agreement (TA). The TA should be signed by you and the tenant, this rental contract should include the following:
- Your name and contact details
- Name of tenant
- Tenant’s NRIC or passport number
- Lease term
- Monthly rental
- Payment conditions
- Mode of payment
- Security deposit
- Terms of repairs
7. After signing of the TA, the tenant must pay all necessary dues. Note that the tenant must equally pay the required stamp duty to IRAS within 14 days of signing.
8. Finally, inspect the property and handover the keys of your unit to the tenant.
Renting Out Property Singapore – Additional Notes to Consider
Whether you will be renting out HDB flat or your private property, always keep in mind these additional details to ensure a smooth transaction between you and the renter.
- The good faith deposit is usually equal to one month of lease.
- Upon acceptance of the good faith deposit, you cannot offer the property to other renters.
- The good faith deposit must be returned in full if you don’t accept the rental offer, the same applies if HDB disapproves your rental application.
- After the TA is signed, the good faith deposit must be converted into security deposit or first month of rent.
- The monies should be returned to the tenant without interest at the end of the lease, deductions are possible if there are damages incurred on the unit.
- Discuss with the tenant additional requests such as permission to sublet your unit, permission to live with pets, and diplomatic clause like early termination of the lease if he is no longer employed in Singapore.