Tips For Setting Budget Aside When Renting

Singapore, the world’s most expensive city for expatriates where the biggest portion of your living expenses is rental costs. We are not trying to scare you off by making you worry but you do have to get worried because the rental rate is crazily expensive in Singapore whether if you are going to rent an HDB in Potong Pasir or a private condominium like Tre Ver condominium. We are going to show you how to keep things in check.

Before that, let us give you the average rental of condominium around Singapore.

Average rental rate for a condo in Singapore: approx. $3,056 monthly

Average rental rate for a Core Central Region (CCR) condo: approx. $4,969 monthly

Average rental rate for a Rest of Central Region (RCR) condo: approx. $3,873 monthly

Average rental rate for an Outside of Central Region (OCR) condo: approx. $2,474 monthly

Now, that you have the average of the condominium rental rate, we are going to guide you in setting your budget for rental in Singapore.

  1. Initial deposit budget

After deciding on your unit’s rental, you will need to sign the Letter of Intent (LOI) with the landlord. As part of this process, you may be asked to handover a good faith deposit of the first month’s rent (this can be negotiated where some tenants insist that they see the Tenancy Agreement before they hand over a deposit, for example).

Do keep in mind that you don’t need to keep a budget for a security deposit after that, which the good faith deposit will be handed over during the LOI will turn into the security deposit. Due to this deposit, you should factor in another month’s rental at the start (you will get it back when you end the tenancy agreement and assuming the house is still in good conditions).

  1. Keep aside at least $350 monthly for utilities

Tenants in Singapore usually will need to pay for the utility bills by themselves (inclusive of air-conditioners servicing cost and internet access). However, most internet plans will reach around $60 on a monthly basis. Overall, the realistic amount to set aside is $350 to $400 per month.

Due to Singapore’s tropics weather, our weather is humid and temperatures usually go up to 32 degrees. Air-conditioner in Singapore will always be fully utilized unless you have a real love for the 32 degrees. The humidity and frequent rain often that necessitates the use of a dryer.

  1. Don’t forget your insurance

Compared to other countries, Singapore’s landlord home content insurance may not inclusive or cover their tenants. If there is a fire or water damage, you could have ended up having to refurnish or replace some of the costs.

Thus, it is highly recommended that to ask your landlord to include you in the insurance especially the home content insurance and not just some fire insurance. While the latter covers only rebuilding costs that are irrelevant to you,

However, if you are not covered, it is best to get it for yourself especially the valuables that exceed the payout limit. For instance, if you have a few expensive and luxury items that worth more than $1,500 payout or renter’s insurance policy won’t cover it.

  1. Setting aside for your property agent’s commission

While Singapore is landlord friendly but there are no standardized contracts for all tenants which makes it possible for a landlord to slip in special requests or unique clauses that could be potentially unfair to you. We advise that it is better to have a property agent representing you. First timer new renters can ask a property agent about what to look for, what each separate form does and others. The commission paid to the agent is almost always worth the assurance provided.

Here is how much you will need to pay:

  • Two years lease, with rental above $3,500 per month:

Usually nothing (the landlord’s agent will split their commission with your agent)

  • One year lease, with rental above $3,500 per month:

You pay half a month’s rent in commission

  • Two year lease, with rental at $3,500 per month or below:

You pay one month of rent to your agent

  • One year lease, with rental at $3,500 per month or below:

Half a month’s rent to your agent

Agent commissions are technically negotiable but most tenants’ agents won’t budge on the above.

This entry was posted in home, useful tips. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *