The high property price in Singapore has been big news in 2022, meaning buyers and renters need to be smarter than ever with their money.
Rental rates, for example, were at an all-time high this year. The median per square foot (PSF) asking prices of listed landed and non-landed private property rental units on PropertyGuru Singapore for the second quarter of 2022, respectively, saw 5.3 per cent and 8.89 per cent quarter-on-quarter increases.
Luckily, PropertyGuru recently shared tips to help us navigate high rental rates, applicable to everyone from couples affected by delayed BTO construction projects to millennials seeking more personal space or expats working in Singapore.
Here’s how renters can be smart in today’s market.
Tip 1: Think ahead and make sure you stick with your budget.
Determining how much you can afford when it comes to rental rates is step one.
And if you don’t know it yet—here’s the golden rule when it comes to setting a budget for housing: don’t spend more than 40 per cent of your income on rent. And we’re not talking gross pay, either. Your rental budget needs to be not more than two-fifths of your take-home pay.
“That means you have a $4,000 take-home income if your salary is $5,000 per month and that you should ideally spend only up to $1,600 per month on rent,” says PropertyGuru.
Setting your rent budget this way ensures you’ll have enough of your salary left for your other living expenses and work toward your financial goals simultaneously.
But the rental fee is not the only consideration for budgeting. You must also remember to factor in the deposit you need to pay your landlord, agent fees, rental stamp duty, plus any repairs that need to be done for items not covered by the rental tenancy agreement.
There may also be additional payments to be made—such as fees for air conditioning maintenance and servicing, so make sure you consider the real bottom line.
PropertyGuru adds, “you might also want to consider getting insurance. While it’s not compulsory, getting renters’ insurance that covers your personal belongings would be wise.”
Tip 2: Be flexible and open-minded when it comes to rental options.
Everyone has a list of the ideal qualities of where they want to live. We, humans, are dreamers, aren’t we? We want to wake up to stunning views, be able to walk to our favourite mall or swim laps before going to work.
While these aspirations are not a bad thing, being set on them can limit your options for renting.
PropertyGuru says it would be good to compromise on features that are less than non-negotiable. “For example, go for an HDB flat instead of a condominium unit if you do not often use facilities such as the swimming pool or gym.”
And for those who’ll continue to work from home, a good working space may take priority over other factors.
“Renting a larger 2-bedder in the Outside Central Region (OCR) may be preferable over a smaller studio in the Core Central Region (CCR), as the former could be the same price as or more affordable than the latter,” PropertyGuru adds.
Tip 3: Negotiate, negotiate, negotiate
Nothing is set in stone unless it is. If a rental price is not specified as non-negotiable, you do have some wiggle room when it comes to what you’ll be paying every month.
Of course, you can’t just mention the first figure that comes to your mind, so it would be good to be aware of recent rental news and trends to ensure your offer is competitive.
How to do this? Check out current rental market rates for different property types across various areas in the country. You can also compare recent rentals in one location that has similar amenities to get an idea of the rental rates in the area by visiting PropertyGuru’s online property portal.
Don’t rush, take your time. Read the fine print in the Tenancy Agreement, and ask for clarifications on terms unclear to you. “Only sign when everything is accounted for; ensure the terms of payment are clearly stated,” says PropertyGuru. /TISG