Renting Out HDB
Most of
the HDB owners in Singapore are painfully aware that living in Singapore is
increasingly expensive. To survive with hefty mortgages and rising utility
bills, many HDB owners in Singapore are wisely turning to rental income for
investment and financial relief. So, if you own a spare room or unit in
Singapore such as Pasir Ris, here are the things you need to know about renting
out an HDB flat.
1.
Eligibility
Only Singapore Citizens have permission to rent out the HDB flat.
Singapore Permanent Resident flat owners are not allowed to rent out the HDB
flat. You can rent out your flat after satisfying the 5-year
MOP. On the other hand, if your flat is non-subsidized or purchased from
the open market without a housing grant and purchased before 30 August 2010,
the MOP is 3 years. Size of your HDB and number of occupants are another
important rules to be taken into consideration. To rent out your bedrooms, the
size of your HDB needs to be 3-rooms or larger. There are rules on how many
rooms you can rent out based on the size of the HDB flats. For example, the
maximum number of bedrooms you can rent out for a 3-room flat is 1, and for
4-rooms and bigger units is 2. If you wish to rent out your whole
unit to a non-citizen or a non-Malaysian, you need to check with HDB’s e-service so
as to ensure that your quota for Renting Out the Flat to
foreigners or non-citizens is still available. If it is not, you are only
allowed to rent out your flat to Singaporeans, PRs and Malaysians.
2. Regulations for Renting Out Your Flat
If you are staying overseas throughout the
rental period, you must appoint an attorney to manage the flat on your
behalf. The appointed attorney cannot be a tenant of your flat. The
property tax will be reviewed when you rent out your flat. More information can
be found at Inland Revenue
Authority of Singapore (IRAS). If your tenants request for proof that they are registered with HDB,
you may print a confirmation letter showing the names of all authorised tenants
listed in your flat.
3. Rental Period
The minimum rental period for each and
every tenant must be 6 months per application. You are not allowed to rent out
your flat or bedroom on a short-term basis, as it may disturb the living
environment and pose security concerns for the residents in the HDB flat.
The rental period is specified in the approval letter, up to a maximum of
3 years if all the tenants are Singaporeans or Malaysians. The maximum is
capped at 2 years for non-Malaysian non-citizen tenants. Non-citizens
refer to Singapore Permanent Residents and foreigners. You are required to seek
for approval each time you rent out your flat or renew the
application.
4.
Rental Price
The
main factors that determine the rental price are location and convenience; size
of the room or unit; the inclusion of utility bills and air-conditioning usage;
number of people sharing the unit or room and etc. Other secondary factors that
will also affect the rental price of your property include quality of
furnishings & facilities; if visitors are allowed; if pets are allowed; if
cooking is permitted; if you are a live-in landlord and etc.
5. Factoring In Utility Charges
When you are renting out a whole flat,
tenants usually pay for utilities separately from the monthly rent and the bill
of utilities is split equally amongst the tenants if more than one shares the
unit. If you are renting out an extra bedroom, issue in an additional $50 to
$120 monthly for your tenant’s share of utilities. However, you can also
include utilities into the monthly rental, provided that some ground rules to
manage the costs are listed down (more on that in the later sections).
6. Letter Of Intent And Good
Faith Deposit
A verbal promise between you and your almost tenant
might seem comforting. But remember, nothing is confirmed until you receive a
tangible or hard copy of written commitment and money deposit from the tenant,
which is why this step is a good practice to expedite a smooth rental process
in order to prevent disputes in the future. Before you remove your rental
listing and turn away other potential enquirers, make sure you have a Letter of Intent as well as a Good Faith Deposit as a proof from the tenant who
wants to secure the room or unit.
