Landlord’s guide: How to rent out your HDB flat in Singapore

June 28, 2021

Who hasn’t dreamt of simply sitting back and having wads of money roll in?

Well, we can always start small – if you own a spare room or unit in Singapore, this straightforward 10-step guide covers all you need to know about renting out your HDB.

Once you seal the deal, you’re free to enjoy your rental income! Definitely easier than hustling for that pay raise.

How to rent out your HDB flat or room in Singapore:

Confirm your HDB’s rental eligibility
Set an asking price
Advertise your HDB for rent
Arrange viewings for prospective tenants
Check if your tenant is eligible
Collect Letter of Intent and Good Faith Deposit (optional)
Apply for approval from HDB
Sign a Tenancy Agreement Form and collect payment of Security Deposit
Get the Tenancy Agreement stamped
Settle the Tenant inspection and handover

1. Confirm rental eligibility with HDB

Before you begin, make sure your HDB flat is eligible for rental in the first place.

The eligibility criteria differs depending on whether you’re renting out the whole flat or just the bedroom(s).

1. Minimum Occupation Period (MOP)

You need to have owned your flat for the Minimum Occupancy Period (MOP) of 5 years before you can rent it out.

This rule applies regardless of whether you bought your HDB flat through the BTO scheme or the Resale Open Market, with or without HDB grants.

2. Citizenship

Both Singapore Citizens and Singapore PR HDB Owners can rent out their spare bedrooms.

With whole unit rentals, it’s a little stricter – only Singapore Citizens are allowed to rent out their whole flat. (Sorry, PRs!)

3. Size of your HDB and number of occupants

For a HDB room rental, your HDB flat needs to be 3-rooms or larger:

1-room or 2-room: Not allowed to rent out rooms
3-room: Maximum of 1 room, 6 occupants (including live-in landlords)
4-room: Maximum of 2 rooms, 6 occupants (including live-in landlords)

For a HDB whole unit rental:

1-room or 2-room: Maximum of 4 tenants
3-room or larger: Maximum of 6 tenants

Tip: No cheating the system! Only originally constructed bedrooms by HDB can be rented out and other parts of the flat including partitioned rooms cannot be given to tenants.

Once you are sure, get a printed confirmation of your eligibility to rent out your flat or bedroom from the MyHDB page (Log in with your SingPass details and navigate to “My Flat > Purchased Flat – Renting Out Flat”).

2. Set your asking price

The next step in your HDB rental is to decide on your asking price.

Tenants tend to be pretty price sensitive, so it’s essential to do your research about current market rates. To get a good benchmark on prices, you can:

Refer to past HDB rental transaction median prices or market rental statistics on the HDB website (for whole unit rentals)
Do a quick check on Carousell for prices of rental bedrooms similar to yours in your area

Here are the main factors that determine the rental price of your home:

Location and convenience
Size of the room/ unit
The inclusion of utility bills and air-conditioning usage (Quick tip: If you want to include utilities in the monthly rental, lay down some ground rules to manage the costs e.g. only switching on the air-conditioning at night)
Number of people sharing the unit or room

Other secondary factors that will also impact the rental price of your property include:

Quality of furnishings & facilities
If visitors are allowed
If cooking is permitted
If you’re renting out the common bedroom, whether the tenant gets sole use of the common toilet (effectively en suite)

3. Advertise your HDB for rent

So the price is settled. Next, it’s time to advertise your HDB rental to potential tenants.

(This is the part where we shamelessly use our own platform as an example. Here goes…)

So you’re listing your home for rent on Carousell, because why not? Free, easy, pretty solid platform. Simply follow the fields in the form:

And don’t just state the details, help potential tenants make sense of your location and facilities and highlight the charms of living in your rental home.

Under 10 minutes’ walk to the MRT with many useful bus routes? Are you comfortable living right next to amenities like a supermarket or shopping mall? Position your rental attractively and accurately.

Tip: When writing the description of your HDB flat, don’t contain all your text in one giant block. Breaking them up into short sentences with bullet points to make it reader-friendly.

4. Arrange viewings for prospective tenants

Yes! People have started inquiring about your property.

Do a preliminary screening

Ask the prospective tenants for some of their details, including the most important ones:

Name
Age
Nationality/ Work pass type
Occupation
Lease Term
Targeted Move-in date

It will help you to get a better idea of the tenant’s suitability. Especially if the tenant will be living with you, you’ll want to make sure that your lifestyles are compatible.

Check your HDB’s Non-Citizen Quota for renting out of flat

Is your prospective tenant a non-Malaysian non-citizen? HDB has a Non-Citizen Quota even renting out your HDB flat: 8% at neighborhood level and 11% at block level.

Check with HDB’s e-service to make sure the quota hasn’t been hit i.e. you can rent out to that tenant.

If the prospective tenant is a Singapore Citizen, PR or Malaysian, then it’s all good – no potential road block here!

Arrange that viewing!

Invite your prospective tenant to view your room or unit.

Bear in mind that they would most likely be considering other rental properties as well so the quicker they view the place, the better.

Tip: To accommodate to a large request for viewings, you can save time by scheduling an open house so that all the viewings can be done in a day.

Assessing prospective tenants

As much as the viewing is for the prospective tenant to evaluate your rental property, you should also check how suitable your tenant is.

Take this opportunity to find out more about his or her personality and lifestyle. You can also discuss your ground rules.

5. Check tenant’s eligibility and verify documents

So let’s say the viewing went great! Both you and the potential tenant have come to a reasonable agreement on the rent price and terms and things are starting to crystalise.

By this point, you’ve probably already asked for these details, but it doesn’t hurt to conduct a final background check on their eligibility.

Want an idiot-proof way to make sure that your tenant is indeed eligible? Collect a copy of their NRIC or work permit (non-citizens have to be holders of Employment Passes, S Passes, Work Permits, Student Passes, Dependant Passes, or Long-Term Social Visit Passes) and check these documents with the ICA iEnquiry system.

6. Collect a Letter of Intent and Good Faith Deposit (optional)

A verbal agreement between you and your almost tenant might seem comforting.

But remember, nothing is confirmed until you receive a tangible written commitment and money deposit from the tenant, which is why this step is a good practice to facilitate a smooth rental process.

Before you delist your rental listing and turn away other potential enquirers, make sure you have Letter of Intent as well as Good Faith Deposit (or security deposit) from the tenant who wants to secure the room or unit.

Letter of Intent (LOI)

This document is a formal offer to rent your property from your would-be tenant. As the tenancy agreement is drafted based on the LOI, the LOI should include all terms such as:

Price
Security deposit
Air-con usage
Allowance of visitors/cooking, etc

Here’s a useful template to guide you and your tenant in crafting an effective Letter of Intent.

Good Faith Deposit

For the Letter of Intent to be effective, your tenant must pay you a Good Faith Deposit.

This amount is usually 1 month of rent and will be used to pay the first month of rent or converted into a Security Deposit upon signing of the actual tenancy agreement.

If the prospective tenant explicitly backs out on the decision to rent after signing the Letter of Intent, you will be able to keep the full Good Faith Deposit.

If you are the one who changed your mind about renting to the tenant, then you have to return the full Good Faith Deposit to the tenant.

Once you have signed on the Letter of Intent and received the Good Faith Deposit, you’ll have to stop advertising your property to other prospective tenants.

Start drafting a proper Tenancy Agreement and get back to the tenant within the agreed period stated in the LOI (usually about 3 days).

7. Apply for approval from HDB

Wait a minute, I thought I’ve already checked my flat and tenant’s eligibility with HDB?

Yes, checks aside, a formal application with HDB is still needed to proceed with the rental.

For this step, you will need all of your tenant’s particulars. Log on to the HDB portal to make the application.

Upon successful application, you will need to pay an application fee of $20 through the portal.

8. Sign the Tenancy Agreement Form and collect payment of Security Deposit

Alas, you’ve gotten to the most crucial step in the entire rental process: getting the Tenancy Agreement signed.

What is a Tenancy Agreement form?

It’s a legal contract that requires the signature of both parties, and as the landlord, you will be responsible for drafting the Tenancy Agreement.

How to draft the Tenancy Agreement

A HDB Tenancy Agreement is made up of 3 parts: your (the landlord) particulars, the tenant’s particulars, and the lease details (be sure to include all house rules to be safe).

Here are some handy templates you can use to create your own Tenancy Agreement.

What to include?

Landlord’s particulars
- Your Full Name
- NRIC/Passport Number
- Current Address
Tenant’s particulars
- Tenant’s full name
- Tenant’s NRIC/passport number
- Tenant’s current address
- Registered occupier name(s)
- Registered occupier NRIC/passport number(s)
Lease details
- Address of property for rental
- Date of Lease Commencement
- Duration of Rental
- Monthly rent amount and its mode of payment
- Security deposit amount
- Inventory list and defects
- Who pays for the utilities and phone bills
- Who pays for repairs and ceiling amount
- Who maintains the air-conditioner and minor repairs
- Other house rules to be observed
- When the landlord can start property viewings as the lease is approaching its end
- Agreement that landlord continues to pay property tax and insurance
- What is the interest payable for late rental payments
- Can the tenant renew before the lease is up?

Also, you may want to include the following clauses:

1. Diplomatic Clause

Is your tenant an expat?

You could throw in a clause that allows them to terminate the lease after 12 months by giving you 2 month of notice. This applies to a situation where they are let go from their job in Singapore or get transferred out of the country.

If this happens, ask to see proof of employment termination or transfer from your tenant.

Most landlords will only include this clause for a lease longer than a year.

2. En-bloc Clause

When your property is nearing the end of its 99-year lease, an en-bloc may take place.

Include a clause to clarify that your tenant will need to end his lease prematurely uncompensated should this happen.

Payment of Security Deposit

If your tenant has previously paid you a good faith deposit, you can turn this into a Security Deposit upon the signing of the Tenancy Agreement.

But, if the LOI and Good Faith Deposit was skipped, collect a Security Deposit of about 1 to 3 months worth of rent.

The Security Deposit acts as your safeguard and will be used to pay for any damages or non-payment of rent by the tenant.

After deducting for such incidents if any, you should return the rest of the amount to the tenant at the end of the lease.

Tip: If your tenant is under the age of 21, a legal guardian will need to sign the Tenancy Agreement on his or her behalf. Contracts made by minors under 21 years old are not binding by Singapore law.

9. Stamp the Tenancy Agreement

Signed the Tenancy Agreement? Next, you have to get it stamped.

The Rental Stamp Duty is a tax on the Tenancy Agreement and is 0.4% of the total rent across the whole lease period.

This necessary expense is borne by your tenant and can be paid by logging on to the IRAS website or taking the Tenancy Agreement to any Service Bureau.

For how much stamp duty your tenant has to pay, see the calculation example below:

For a lease period of 24 months and a monthly rent of $700:

The Rental Stamp Duty technically has to be paid before signing the tenancy agreement but this usually never happens for practical reasons.

The penalty will be avoided as long as your tenant gets the Tenancy Agreement stamped within 14 days after signing it (if signed in Singapore; or within 30 days after receiving the document in Singapore if signed overseas).

Your tenant must pay a penalty of $10 or an amount equal to the duty payable, whichever is greater if these deadlines are not met.

For late payments exceeding 3 months, a penalty of $25 or 4 times of the duty payable, whichever is greater, will be imposed.

10. Tenant inspection and handover

Tenancy agreement signed, stamp duty paid and security deposit received?

With your rental deal now sealed in black and white, your tenant can finally proceed with the move.

Make sure your tenant gets a chance to inspect your property one last time. You should prepare an inventory list detailing all the furnishings, fittings and appliances and their working conditions to facilitate this process.

What’s next?

Hand over the keys of your property over to your new tenant! Congratulations! You are now officially an HDB Landlord.

Renting out your HDB Flat or Bedroom

Renting out your HDB or bedroom is really no rocket science – anyone can do it!

And don’t underestimate the benefits of renting out, even if it’s just a spare bedroom – a HDB room rental fetches an average of $800 a month on Carousell. That’s $9,600 of passive income in a year – start your landlord journey HERE!

Introducing Rental+

Psst, we’re here to help you out with your rental journey! Enter Rental+, a free programme in partnership with FWD Insurance to make renting truly worry-free. You pay nothing AND get free insurance coverage on your room or apartment rental.

Rental+ will help make step 8 easier, where the security deposit from tenants will now be replaced with a one-time fee that’s only 30% of one month’s rental costs. Plus, we’ll provide you with a tenancy agreement template!

Join Rental+ today to make your rental listing more attractive to potential tenants because of the lowered initial deposit! Find out more on Rental+ here!

Landlord’s guide: How to rent out your HDB flat in Singapore