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HDB Homeowners’ Guide To Renting Out Your Flat For Additional Income

If you ever considered renting out your HDB flat for monthly rental income

Renting out your HDB flat – either in part or in whole – is one way you can monetise your asset and receive a stream of passive income from it.

But before you do so, are certain eligibility criteria you need to be aware of, and steps you need to undertake as a responsible, law-abiding landlord. In this guide, we explain the step-by-step process of renting out your HDB flat.

Read Also: 4 Things You Should Know Before Buying Or Renting Properties Based On A Virtual Property Tour

#1 Understand Eligibility Requirements Of Your HDB Flat

Before you intend to rent out the whole unit, you will need to meet the eligibility requirements set out by the HDB.

Firstly, only Singapore citizen flat owners are allowed to rent out their whole flat. Singapore Permanent Residents (PRs) can only rent out spare bedrooms of the flat they continue to reside in.

Next, flat owners must fulfil the Minimum Occupation Period (MOP) of 5 years, if they have purchased a flat new from HDB (such as through Build-To-Order scheme) or from the resale market with a housing grant from CPF. If the flat is purchased from the open market without a housing grant before 30 August 2010, the MOP would be 3 years. MOP starts from the date of purchase of the flat, effective date of transfer of ownership or the date the owner was included as an authorised occupier of the flat. You can visit the HDB website and login using your SingPass to check MOP date for your flat.

Lastly, you will need to ensure the maximum number of occupants allowed in each flat is adhered to. If you own a 2-room flat, the maximum number of occupants is 4, while the total number of occupants for 3-room and bigger flats is 6. This limit is inclusive of landlords/occupiers and tenants.

Read Also: Selling, Buying or Renting Property? 5 Reasons Why You Need A Contract In Black & White With Your Property Agent

#2 Understanding Your Renting Period And Setting Your Price

Before you make a listing, you need to understand what is your minimum and maximum rental period and set a reasonable price for renting out of your flat.

Short-term rental of flats is forbidden, since it may disrupt the living environment and pose security concerns for your neighbours.

The minimum renting out period is 6 months, and the maximum is 3 years if all the tenants are Singaporeans or Malaysian. The maximum period is capped to 2 years if there is a non-Malaysian non-citizen tenant (PR or foreigners).

To help you set a reasonable price for the flat rental, you can refer to data from  HDB’s Rental Statistics page.

#3 Advertise Your Flat

After you have decided on the rental pricing and period, you can proceed to list your property on major property portals, newspapers, or through your preferred agent.

If you intend to engage an agent to market your property, it is common to pay a commission ranging to half a month to one month’s rental. Be sure to find out your agent’s commission structure before engaging them to avoid any surprises later on.

For those who prefer to go the Do-It-Yourself approach, you can go the extra mile to spruce up your apartment before you snap pictures and post them on the portals. In addition, it helps to make sure your listing is as detailed as possible, such as information about amenities in close proximity, flat facing, or public transportation options.

Read Also: Housing Agents Share: How Can Homeowners Improve The Chances Of Selling Their “Hard-To-Sell” HDB Flat?

#4 Check If Your Tenant Is Eligible

Once you have a potential tenant interested in renting your flat, you need to check if they are eligible to do so. Besides Singapore Citizens and PRs, you are allowed to rent out your unit to non-citizens holding the following passes with a validity period of at least 6 months:

– Employment pass;
– S Pass;
– Student pass;
– Dependent pass;
– Long term social visit pass;
– Work permit holders. Those from the construction, manufacturing, marine and process sectors must be Malaysians.

For foreigners, you should verify their immigration status by using ICA’s iEnquiry system, and check the validity of the employment pass or S pass using MOM’s website. Tourists are not allowed as tenants of HDB flats.

In addition, you are not to rent your unit to anyone who owns other HDB properties, unless your prospective tenants:

– Are divorced or legally separated, where you may only rent to 1 party of the divorced or legally separated couple;
– Rent out their property within 1 month of renting a flat from you;
– Own an executive condominium unit elsewhere and have met their minimum occupation period before they rent the flat from you

For Singapore PRs or foreigner of non-Malaysian origin whom you ascertained are allowed to rent, you need to perform one additional step to check the Non-Citizen (NC) Rent Out Quota via the HDB InfoWEB. Singaporeans, Singapore PRs, or Malaysian work pass holders are not affected by the quota.

The NC Rent Out Quota is presently set at 8% and 11% at the neighbourhood and block level respectively.

Once the NC Rent Out Quota in a neighbourhood and/or block is reached, flat owners residing in the neighbourhood or block will not be able to rent out their flat to any non-Malaysian NCs and will only be able to rent out to Singaporeans or Malaysians.

Read Also: 6 Unexpected Cost Areas Singaporeans Should Look Out For When Buying A House (Whether It Is A HDB, Condo Or Landed Property)

#5 Obtain Approval From HDB

Once you have done your checks and obtained a Letter of Intent from your prospective tenant, you can proceed to obtain HDB’s approval for renting your flat, which can be done online.

Do note that if you are overseas during the period of renting out, you must appoint an Attorney to act on behalf and be responsible for managing your flat.

Once you have obtained approval, you can proceed to draft the tenancy agreement and collect a security deposit for your rental.

Congratulations, You’re Now A Landlord

Congratulations, you will now be receiving rental income from your tenant. With this, your property tax payable on your HDB flat will be revised.

In addition, if your tenants are asking for proof that they are registered with HDB, you can either print a confirmation letter showing the names of all authorised tenants listed in your flat via the HDB website, or log on to HDB’s Enquiry on Authorised Tenants’ Service to confirm the details of the authorised tenants.

Read Also: Guide To HDB Silver Housing Bonus Scheme, And How It Can Help You (Or Your Parents) With Retirement aims to provide interesting, bite-sized and relevant financial articles.

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