Do you own property available for rental in Singapore?
Singapore’s rental market is an excellent opportunity to take advantage of the vibrant and energetic city life. However, what does this mean for you and your potential tenants?
Let’s look at a comprehensive guide for renting a property in Singapore.
The Singapore Property Market: Understanding the Property Market
Singapore is a highly-regulated property market that also comes with some stringent guidelines and rules for renting out properties.
It is essential to begin by gaining an understanding of the Singapore housing market.
The majority of properties in Singapore are part of the Housing Development Board, Singapore’s public housing authority.
In 2018, 20 percent of the property was privately-owned apartments, condominiums, or land.
Lease In HDB Property in Singapore
With the majority of Singapore’s real estate owned through the Housing Development Board, renting out properties in the city may require an understanding of the particular guidelines for these properties.
HDB property is legally eligible to be rented; however, just by Singaporean citizens who are with a 5-year minimum occupancy period.
Not more than 8 percent of a neighborhood and 11 percent of block flats are rented to foreigners in order to ensure a healthy community of different ethnicities.
This quota doesn’t apply to Malaysian residents who are renting due to the strong cultural ties that exist between Singapore as well as Malaysia.
There are other strict rules that are applicable to renting apartments within Housing Development Board properties, and the permission to rent must be sought in advance.
Renting Out Private Property in Singapore
Although private homes comprise less of Singapore’s market for the property, they are an important portion of the rental market.
Private rental properties are subject to less strict regulations as compared to HDB properties, which makes them more appealing to lease for long-term rentals.
The term of rental for an individual property lease is determined by the contract drawn up between the landlord and tenant; however, certain rules must be observed.
It’s crucial to make sure that the agreement is backed by a formal document that sets up the obligations and rules pertaining to the Tenancy agreement (which an experienced property agent can assist in drafting out and is enforced).
They are an essential element of the relationship between landlords and tenants as well as a crucial safeguard for both sides in the case of an argument.
Do you think investing in Rental Properties in Singapore is a Good Idea?
Singapore is a pricey location to live in, boasting some of the highest property costs. So, ensuring a reasonable rental yield also requires an enviable rental rate.
Singapore’s property market is experiencing a difficult time when it comes to rental homes, with an average yield of less than 3percent. Maximizing the rental value of your property is vital in such a situation.
Smaller apartments, especially those located in suburban areas, have been proven to have a higher rental return than larger apartments in central areas. They could be a good spot to begin when looking at the possibility of renting.
In addition to the normal maintenance costs and ongoing costs that one could expect to pay for renting a property in Singapore, It is important to take into account taxes. Property Tax rates apply to rentals in Singapore.
Also, you should consider the Income Tax that could be applicable to the rental income that you earn on your investment property.
Rent income for residents is calculated in accordance with the tax rates for residential use, which means that foreign residents will be taxed on their rental income at a fixed 22 percentage rate.
Similar to any other property market, Singapore offers some exciting possibilities if you make the right investment choices.