By Joanne Poh
Property is one of the most popular ways to invest in Singapore, and renting out a property is a key way to monetise it. Here are 9 things you need to do in order to rent out residential property in Singapore.
1) Check your eligibility conditions and regulations
If you own an HDB flat and wish to rent out the entire unit, you must wait until your Minimum Occupation Period of five years is over before you can do so.
Before the Minimum Occupation Period is up, you are allowed to rent out rooms in the flat provided that you continue to reside in it. This means that at least one bedroom must be occupied by you.
The minimum lease period for HDB property is 6 months. The maximum lease period is 3 years for Singapore and Malaysian citizens, and 2 years for citizens of other countries. You can always offer to renew the lease at the end of the contract if you are happy with the tenant.
If you own private property such as a condo or landed house, you are free to rent it out in whole or in part whenever you like. However, you must not rent it out for periods of less than 3 months.
2) Set your asking price
In order to successfully find an acceptable tenant, you will need to set an asking price that is in keeping with your area and property type. Setting a price that is too high will mean you do not get to choose from many tenants, if any.
To get an idea of how much your property is worth, search for related listings on PropertyGuru.
3) Engage an agent to market the unit
Finding a good tenant is hard work, which is why you might want to engage a property agent to help.
An agent can create listings on portals like PropertyGuru, including information and photos that make your property look attractive. The agent will also respond to queries from potential tenants, screening them according to your criteria.
4) Set a time to allow potential tenants to view the unit
Once listings featuring your property have been published, you will need to set aside some time to let potential tenants view the unit. Discuss this with your agent beforehand and block off some slots in your calendar for viewing.
The agent will arrange for viewing sessions according to the timetable you have indicated, so be prepared to make your property look inviting to potential tenants. It goes without saying that the place should be clean, any clutter should be cleared and the curtains should be left open to make the property look brighter.
5) Screen potential tenants
As a property owner, you should have your own set of requirements for a tenant. You will get to meet tenants in person and screen them according to your criteria.
Before meeting a potential tenant, create a list of criteria as well as a list of questions to ask him or her. Are there any habits, such as smoking, that are a no-go for you? Do you prefer families, couples, singles or students? Are certain values such as care for the environment important to you? Do you prefer a resident who will leave after a stint of 6 to 12 months, or someone who plans to reside in Singapore longterm?
Your criteria will vary depending on whether or not you will be living with the tenant. If you are living with the tenant, you need to decide if there are house rules you wish to put in place, such as no smoking or no noise after a certain hour, while taking care to be fair to the tenant as a resident.
It is worth noting that some landlords who live with tenants disallow cooking, guests and/or use of the living room and/or kitchen. As such rules are below most tenants’ expectations of a home, be aware that they might have a negative impact on the rent tenants are willing to pay.
6) Negotiate the rent
Tenants usually try to bargain over the rent, and your agent is likely to indicate on their listing a rental price that is above what you are willing to accept. So be prepared to negotiate once you have found a tenant you are comfortable with.
7) Get the tenant to sign a letter of intent
Once you have found a tenant you’d like to rent your property to and you have agreed on a price you are both comfortable with, present the tenant with a letter of intent to sign. Your agent should be able to provide the tenant with a letter of intent on your behalf if you make it clear you wish to use one.
A letter of intent indicates the tenant’s commitment to rent your property. Not all landlords make their tenants sign one, but it is good to have, as it deters the tenant from backing out of the agreement or delaying the start of the contract.
8) Sign the tenancy agreement
Your next step is to sign a tenancy agreement. Your agent can help you prepare one, but you should still make sure you read through it carefully and get the agent to add any clauses you feel are necessary. Be aware that the tenant might also try to negotiate the terms of the contract.
The tenancy agreement will also indicate the security deposit amount that is required.
When you are satisfied with the agreement, you and the tenant should both sign it in order to enter into a binding contract.
9) Hand the keys to the tenant
Your property is your tenant’s home as of the start date of the contract, so arrange to hand the keys over to him or her on that day. Here’s wishing you a fruitful relationship with your tenant!