Rent in Singapore 2020 - Cost guide to renting a room or home

So you're moving to Singapore, attracted by the island nation's promise of high salaries and the opportunity to travel around Southeast Asia at the snap of a finger.

But Singapore also has the dubious honour of being one of the world's most expensive cities, topping numerous global cost-of-living rankings.

Unless you're flying in on a cushy expat package that takes care of your accommodation, you're going to have to rent a home, or for those without deep pockets, a room.

Here's a guide on how to rent a room or a home in Singapore, no matter how big or small your budget.

WHERE SHOULD YOU LIVE IN SINGAPORE?

Singapore might be a pint-sized nation, but where you live can have a huge impact on your lifestyle, your wallet and your sanity as you commute to work each morning.

You'll see the numbers of the various districts labelled above. Here are the areas they correspond to.  

The various areas in Singapore can roughly be broken down into the following categories:

Some factors you'll want to consider when picking an area are:

Rent: Everyone wants to live in the city core, but it's not always affordable. You'll have to find a balance between convenience and affordability.

Transport links: Unless you intend to fork out the money to buy a car (extremely expensive, so only the richest expats own them), you'll have to rely on the MRT and bus network. It's very worthwhile to pay more to live within walking distance of an MRT station, as buses significantly increase travelling time.

Location of workplace: Pick an area that enables you to commute as quickly and as conveniently to your workplace as possible.

Schools: If your kids will be moving to Singapore with you, the location of international schools might influence your choice. If you'll be enrolling the kids in a local school, this is less of a factor.

Amenities: Look out for neighbourhood amenities such as public swimming pools, libraries, shopping malls and supermarkets.

HOW MUCH DOES IT COST TO RENT A ROOM OR HOME IN SINGAPORE?

You'll need to first decide what type of accommodation you wish to rent. You have the following choices, ranked from least to most expensive.

Room in a shared HDB flat - This often (but not always) entails living together with the landlord. A room for rent in an HDB flat (public housing in which about 80 per cent of the population lives) is your cheapest option because HDB flats do not have amenities like swimming pools or 24-hour security.

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• Room in a shared condominium or house - The most common arrangement is to share an apartment in a condominium development with other tenants. Condominiums come with amenities that might include swimming pools, gyms, tennis courts, barbecue pits and 24-hour security.
• Entire HDB flat - If you need an entire unit to yourself, this is the cheapest option. The smallest units are 2-room flexi flats (1-bedroom + living room), but these are in short supply. 3-room flats (2 bedrooms + living room) are the next cheapest option.
• Entire condominium or house - The smallest and cheapest option for a home for rent are shoebox studio condominium units. If you're moving to Singapore with your family, you might want to consider an entire apartment unit or house. Note that houses or landed properties have a higher tendency to be located far away from MRT stations.

Obviously, rental costs vary wildly across the board depending on the type of housing you're choosing, size, whether the property is furnished or not, as well as the area in which you wish to reside.

Here are some sample rents of fully-furnished areas to give you an idea of how much you can expect to pay.

(Remember that rents can still fluctuate wildly even within districts. "Apartment" always refers to a private apartment or condominium development, as opposed to an HDB flat.)

ESTATES THAT ARE POPULAR WITH EXPATS AND RENTERS

The vast majority of Singaporeans tend not to rent homes, preferring to (or rather, having no choice but to) live with their parents until they're ready to purchase a home.

As a result, the rental market tends to almost exclusively serve foreigners although this is changing slightly with the younger generations of Singaporeans being more keen to move out on their own.

Older and wealthier expats tend to gravitate towards the uber-expensive areas like Orchard (and surrounding areas like River Valley, Tanglin and Grange Road), the CBD zone and Marina Bay (and surrounding areas like Robertson Quay), and Sentosa Cove.

For younger expats who aren't made of money, the following areas have proven popular with foreign renters, while still remaining relatively affordable.

ALSO READ: How to rent out your HDB flat without an agent in 9 easy steps

• Tiong Bahru - Hipsterish area with a bustling cafe and bar scene, the area is also near the CBD and city core. The fast-gentrifying area attracts young, fashion-conscious locals and expats.
• Holland - This area in the West is popular with expat families and is also just a short ride from Orchard Road. Also a popular choice for those working at NUS in nearby West Coast.
• Farrer Park / Little India - Popular with young professionals due to its proximity to the CBD and central entertainment districts.
• Paya Lebar / Eunos - Popular with young professionals working in the CBD and Changi Business Park, this area is not too far from the city centre while still remaining pleasant and affordable.
• Woodlands / Jurong- Most of the expats in these areas tend to be families whose children go to international schools located in the area.

WHAT MAKES A PLACE MORE EXPENSIVE?

As you can see, rental prices can fluctuate wildly, which seems odd considering you can drive across the entire island in under an hour.

Here are some factors which can raise rental prices considerably.

• Location: Despite the small size of Singapore, location is everything when choosing a home. Picking the right location can be the difference between a 15-minute and a 1.5 hour commute to work. Despite the government's efforts to decentralise the city, the vast majority of the action still takes place in the city core. As a result, proximity to the city core is the biggest factor influencing rents.
• Transport options: Rental prices are very sensitive to proximity to MRT stations, since the majority of renters do not own cars.
• Proximity to business or entertainment hubs: While proximity to the city core has a far stronger influence on rents, a location close to business or entertainment hubs within a suburb can also raise your rent a little.
• Mature or non-mature estates - When it comes to HDB property, flats in mature estates (ie. older and more established neighbourhoods like Tiong Bahru) tend to command higher rents as they are usually located closer to the city core, have better-established amenities, aren't a continual construction site and generally boast bigger units. Non-mature estates (ie. newer neighbourhoods) tend to be in far-flung areas, can have a lot of construction going on (watch out for this before signing a lease as drilling can go on almost round the clock) and might lack amenities.

HOW TO MAKE SURE YOU AREN'T GETTING RIPPED OFF

Doing research on rents is essential before you sign a contract for lease.

There are lots of online portals that can give you an idea of the kinds of asking prices on the market, such as the following.

• 99.co
• PropertyGuru
• SRX Property
• SnappyHouse
• Singapore Expats Forum

Note that most of the quotations you'll see on these sites are actually inflated prices that are open to negotiation. In Singapore, it is perfectly acceptable (in fact, it's expected) to do a bit of bargaining to lower your rent.

In fact, Singapore's rental market has been on a downward slide for quite a few years now, and some people get away with renegotiating their rent at the end of their lease, or simply move to a cheaper unit in the same development after their lease ends.

By the same token, the landlord is also free to raise your rent at the end of your lease UNLESS there is a clause in your contract that indicates that he will offer you the option to renew it at the same price.

ALSO READ: Renting a home in Singapore - 5 ways to make sure you save money

SHOULD YOU USE A HOUSING AGENT?

It is absolutely not necessary to use a housing agent, but it can make life easier if you're time-strapped (eg. you landed in Singapore today and need to get a place ASAP).

An agent will source for places you can rent, and then take you to view them. Agents usually have cars, which means they can pick you up and drive you from place to place, enabling you to see a lot more in one day.

The catch is that you might be required to pay agents' fees.

Agents are allowed to collect fees from ONLY one party-the landlord or the renter.

If the agent is working for the landlord, you won't have to pay any commission. However, in that case, he will only show you the properties of landlords who are his clients, which will limit your choices considerably.

On the other hand, if you engage an agent to act for you as a renter (meaning he earns no commission from the landlord), he will be able to source for properties all over Singapore on your behalf. However, you will be charged a commission, usually half a month's rent, although some agents will charge up to a month's rent.

Of course, the cheapest solution is to contact property owners or tenants looking for flatmates directly through online listings, forums or even Facebook groups.

ALSO READ: Renting vs owning: 4 headaches of homeownership

PROCEDURES WHEN RENTING A ROOM OR HOME IN SINGAPORE

When you have found a place you'd like to rent, you'll go through the following process.

1) MAKING AN OFFER

Once you and the landlord have decided on a rent amount that both of you are comfortable with, it's time to make your offer.

It might be more convenient to do this verbally, but remember that if you've got nothing down in black and white, there's nothing stopping the landlord from renting out the place to someone else with a better offer.

So at least send a text message or email and get the landlord to respond so you have in writing the fact that he's agreed to rent the place to you. Which brings us to our next point…

2) SIGN A LETTER OF INTENT

To lock down your offer, you might want to sign a Letter of Intent.

This letter indicates that you intend to sign a tenancy agreement with the landlord, and that he agrees not to continue searching for tenants.

You want to negotiate the conditions in your tenancy agreement at this stage (eg. whether you are allowed visitors, whether you're allowed to use the common areas, whether utilities are included, which repairs you're responsible for).

It is likely you will be required to pay a good faith deposit together with the Letter of Intent. This is usually a month's rent for year-long leases, or two months' rent for 24 months. If you go on to rent the property, the good faith deposit will go towards your security deposit.

The security deposit is refundable when your lease lapses, although the landlord may retain some or all of it to repair damages you've caused to the property.

ALSO READ: How to move to Singapore without ruining your finances

3) SIGN THE TENANCY AGREEMENT

Once you've signed the tenancy agreement, you are officially renting the place.

But before you do so, make sure you read it thoroughly and negotiate on any points you're not comfortable with. Note that the minimum lease term is officially 6 months for HDB property and 3 months for all other property, although some landlords flout the rules.

While you should already have negotiated as much as possible before signing the Letter of Intent, comb through the tenancy agreement to see if there's anything you missed.

If you did not have to pay a good faith deposit, you will be required to pay your security deposit when you submit the signed tenancy agreement to the landlord.

4) PAYING YOUR RENT

You'll want to make sure you pay your rent on time every month, otherwise your landlord may not want to renew your contract when it ends.

Most landlords in Singapore prefer payment by bank transfer, but if you'd prefer to pay by cheque or in cash, discuss this with your landlord ahead of time.

Note that some landlords may not be residing in Singapore, in which case you will not be able to pay in cash.

ALSO READ: Cost of living in Singapore (2020): Is your salary really enough?

HOW MUCH CASH DO YOU NEED TO GET STARTED?

Other than your first month's rent, you will need to set aside the following sums at the get-go.

• Downpayment - A typical downpayment amount is one month's rent for 12-month leases and two months' rent for 24-month leases.
• Agents' fees - This only applies if you hire an agent who's acting for you and not for the landlord. These are typically half a month's rent, although some agents charge up to 0.75 or 1 month's rent for leases of up to 2 years.
• Utilities and internet bill - If utilities and/or internet aren't included in your rent, you will want to prepare to pay yours at the end of your first month. You'll also need to factor in internet and/or cable TV set-up fees if the landlord or your fellow tenants don't already have a subscription.

This article was first published in MoneySmart.