So you’ve bought a condominium, and you intend to finance your monthly mortgage by renting the condo out. In this guide, we walk you through all you need to know when you rent out your private property or condo in Singapore.

7 Steps to Rent Out Your Condo

• Step 1: Check your eligibility
• Step 2: Calculate your costs
• Step 3: Determine your pricing
• Step 4: List your property
• Step 5: Conduct viewings
• Step 6: Wait for a suitable offer
• Step 7: Background check, LOI, Good Faith Deposit, etc

You probably already know this, but as the owner of a private property, you’re not subject to the many rules and regulations that HDB imposes on the renting of HDB flats.

That said, there are still plenty of factors to take into consideration when renting out your condo. Read on to find out more!

Step 1: Check your eligibility

The good news? Because you own a private property or condo, you’re free to rent it out (in whole or in part) without any government approval.

However, you’re still subject to certain stipulations. Firstly, you mustn’t rent your condo out for less than 3 months at a time (this means Airbnb is a no-go).

Next, you’ll also need to adhere to the occupancy cap rule, which states that the maximum number of unrelated occupants that may be accommodated in a property is six.

This applies to all persons residing within your home, as long as they’re not part of the same family unit. That said, domestic caregivers who are hired by your family are considered part of the same family unit and therefore not subject to the rule.

Step 2: Calculate your costs

Before you determine how much you want to rent your condo out for, take some time to calculate the costs associated with renting out your property.

In What Are The Costs Involved In Becoming a Landlord, we share several costs that folks renting out their HDB flats will incur, including:

• House mover fees
• Agent commission
• Stamp duty
• Fulfilling your tenant’s requests

Your costs may be slightly less given that you won’t have to pay the HDB application fee — but bear in mind that most household repairs past a certain token amount are your responsibility. Depending on the age of your unit, you may have to factor in a sizable amount for repairs each year.

Once you’ve calculated these costs, you’ll have a clearer idea of how much you should ask for your condo.

Step 3: Determine your pricing

Most first-time landlords aren’t sure how to price their properties, so they just look at what their neighbours are asking for their properties and take this as a benchmark.

The more scientific way of doing this, though, is to first determine the rental yield you want to earn, then figure out how much rental income you have to generate in order to hit this yield.

If this is the first time you’re hearing the term “rental yield,” this is basically your rental income as a percentage of your property’s value. Rental yield is often calculated as a gross figure, but we recommend using the net figure, which is more detailed and accurate.

Here’s the formula:

Net rental yield = Gross yearly rental / Purchase price of property + Additional costs

The additional costs include the costs associated with being a landlord (i.e. whatever you’ve calculated in step three), and other expenses such as your condo’s maintenance fees and property taxes.

If you want to be exceptionally thorough, you might also include your opportunity cost, which is basically the cost of your next best alternative.

For example, say your condo charges $500 per month for maintenance fees.

If you’re staying in the condo and paying this fee, you’ll get access to facilities such as the gym, pool, etc. But now that you’re renting your condo out, you’re not allowed to use the facilities anymore. This means that you might choose to buy a gym membership that costs you $100 per month.

At the end of the day, you’re not just incurring $500 in condo maintenance fees, but also $100 in opportunity costs.

To learn more about calculating your rental yield and determining your pricing, read How Much To Charge When Renting Out Your Home.

Step 4: List your property

Now that you’ve worked out all the numbers, the next step is to list your property. If you have an agent, they’ll do this for you. If not, you’ll have to take care of it by yourself.

Now, how many viewings (and subsequently, offers) you get depends on how attractive your listing is, so make sure that you get it right.

Here are some tips to keep in mind:

• A picture speaks a thousand words, so make sure your pictures look good. Take your pictures in the day and let in as much natural light as possible. This way, your apartment looks bright and airy.
• Other than including pictures of your apartment, also upload pictures of the condo amenities (pool, gym, etc).
• If your apartment is lived-in (read: messy), take some time to tidy it up before snapping your pictures.
• Make your listing as informative as possible and include and information that would appeal to potential tenants. For example, mention that residents can take the side gate and walk down the sheltered pathway to the MRT station, or talk about how the gym is a full-sized gym, not a compact one that you see in smaller-sized condos.

Step 5: Conduct viewings 

Once your listing is up, the next step is to conduct viewings.

If your condo is super strict about security and the guards tend to be unfriendly, inform them ahead of time that you’ll be hosting a visitor. This will minimize any friction and ensure that your viewing starts off on a good note.

If your condo is located on sprawling grounds and it’s hard for first-time visitors to locate the right block/unit, consider waiting for your potential tenant at the condo entrance so that they won’t get lost. 

This doesn’t take much effort on your part, and your potential tenant will definitely appreciate the gesture.

On top of that, here are some additional tips to keep in mind:

• Conduct viewings in the morning or evening, when it’s not too hot.
• If you’re conducting multiple viewings in a single day, make sure to schedule enough time in between. You don’t want to rush your tenants through the process.
• Make sure you’re well-dressed. There’s no need to put on a suit or ball gown, but you do want to wear something nicer than a ratty old tank top and gym shorts.
• Tidy your home up, and make sure that it looks decent before your tenants arrive.
• Don’t just show them your apartment — take them for a tour of the entire condo, and show them the other amenities as well.
• Give your tenant as many details as possible, and paint them a picture of how living in your apartment would look like. For example, you might point out how you get a nice view of the sunset from your balcony, and you like to drink some wine while watching the sun go down on the weekends.

Step 6: Wait for a suitable offer

Once you’ve conducted a fair number of viewings, your offers will (hopefully!) start streaming in.

Note that it’s uncommon for tenants to accept a property as-is. Most try and bargain in some way — for example, the might say they’ll rent your apartment if you repaint the place, and pay for a dishwasher / clothes dryer.

Now, it’s up to you to review their offers, and determine whether it’s acceptable.

Obviously, you want to rent your condo out as soon as possible (so that you can put your rental income towards your monthly mortgage). That said, if your first few offers come with too many requests, it might make sense to hold out for a better offer.

Step 7: Background check, LOI, Good Faith Deposit, etc

Once you’ve gotten an offer that you’re happy with, that’s half the battle won!

From here, all you’re left with are the administrative tasks, including:

• Conducting a background check
• Getting a Letter of Intent (LOI) and collecting a Good Faith Deposit
• Drafting the Tenancy Agreement (TA)
• Collecting a security deposit
• Getting your TA stamped
• Proceeding with the handover

If you want to learn more about each of these steps, head on over to our guide — What To Do After I Secure A Tenant.

Congrats, you’re now a landlord!

What other questions do you have about renting out your home in Singapore? Let us know in the comments!