pros & cons of renting out a whole hdb unit

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pros & cons of renting out a whole hdb unit

Postby lydia_chin » Mon Feb 14, 2011 6:11 pm

Hi all,

Advice needed, what are the pros & cons for renting out a whole HDB unit ?

I am currently thinking of renting out my hdb flat and stay with my old aunt who is unmarried. My spouse and kid is ok with this arrangement as my aunt's house is spacious and she is the kind that don't bother us much and doesn't mind having us as companion.

Now i am thinking of 1 year lease (renewable thereafter) and the most worried me is what happens if I kana 'horrible' tenants and 'disfigured' my flat when i take it back?

Any mummies & daddies here have stories to share? thanks! :wink:

lydia_chin
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Postby tankee » Mon Feb 14, 2011 6:28 pm

What I did was set a slightly lower asking price, so that i have a bigger pool of potential tenants to pick and choose from.

But new coat of paint and minor repairs are hard to avoid.

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Postby 30plus » Mon Feb 14, 2011 9:55 pm

When you rent out a unit, you have to expect there is wear and tear, likely higher than you live in.

So. don't put in very expensive items and expect part of the rental is used to cover the expense.

From the financial point of view, the biggest problem of HDB in rental is that you can not refinance up. As the result, ROE is typically not that fantastic although the raw rental yield is higher than condo.

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Re: pros & cons of renting out a whole hdb unit

Postby LOLMum » Mon Feb 14, 2011 11:14 pm

[quote="lydia_chin"]Hi all,

Now i am thinking of 1 year lease (renewable thereafter) and the most worried me is what happens if I kana 'horrible' tenants and 'disfigured' my flat when i take it back?

A/quote]

i am more afraid of loan sharks. so you have to be very careful when choosing a tenant. dont leave everything to the agent.

LOLMum
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Postby lydia_chin » Tue Feb 15, 2011 11:37 am

Hi all,

Thanks for your reply.

Is it possible to 'visit' the unit once in a while (like every 2 months) with the consent of the tenant? I ask the agent and he said it's possible but not too often lah.... :wink:

Also, is ang mo tenants (family - married couple with kids) better than any other race?

Thanks again! :celebrate:

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Postby hquek » Tue Feb 15, 2011 11:44 am

hi lydia,

For hdb, angmohs may not like to rent due to lack of facilities but I could be wrong. Best if you can rent to professionals - there are some who are unwilling to pay a lot for condo and want a whole place to themselves.

Yes, expect some wear and tear. My fren had his kitchen practically burnt down by a South Asian tenant family...and they didn't have the courtesy to inform the landlord. Lucky his place (HUDC then) was enbloc so they didn't pursue. I would say, take pictures BEFORE the tenancy is signed as proof of the condition of your place, and have it agreed with the tenant. Else it'll be your word against his.

If you rent out the whole unit, theoretically you can only visit when the tenant is in (ie got to give prior notice). Only when you rent out room then you can visit as you wish.

But do conduct your own checks - at least chit chat with your neighbour to find out if tenant is ok. Illegal immigrants or 30 (eg only) foreign workers housed in your flat will always be YOUR responsibility.

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Postby smurfette3 » Tue Feb 15, 2011 2:17 pm

Hi,

I agree with hquek, take lots of pictures. I just took back my hdb unit after renting out. The kitchen island had lots of oil stains that could not be removed. The walls had some black marks and the fridge had paint scraped off. The dining room chairs had oil stains as well. I showed them the before photos and they agreed to forfeit the deposit but it was hard work to restore the place back. But at least it is better than nothing.

Always prepare yourself that no matter what, it will come back to you in not too good a condition.

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Postby lydia_chin » Tue Feb 15, 2011 10:09 pm

Hi smurfette3,

Thanks :D so do you intend to rent out your flat again? how long was the contract? I intend to rent like 6 months + 6 months (to review and extendable after 1st 6 months so in case the tenant is no good we dont have to wait till too long to get rid of them) :pray:

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Postby smurfette3 » Wed Feb 16, 2011 12:03 am

lydia_chin wrote:Hi smurfette3,

Thanks :D so do you intend to rent out your flat again? how long was the contract? I intend to rent like 6 months + 6 months (to review and extendable after 1st 6 months so in case the tenant is no good we dont have to wait till too long to get rid of them) :pray:


Hi Lydia,

The contract was 1 yr + 1 yr. We did not renew contract as we wanted a increase in the rent as the economy had picked up by then but they could not afford. 6 mths + 6 quite hard to rent cos most serious 'renters' would want at least 1 year to even consider. How big is your flat if you dont mind me asking? (cos smaller units are easier to rent out). Mine was a EA (executive apartment) and quite hard to rent out.

I do not intend to rent out. Now toying with idea of selling as market is quite good and thinking of getting a small condo to invest in with the money as we are staying with hubby's parents now.

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Postby lydia_chin » Wed Feb 16, 2011 12:28 am

mine is a 4-room HDB with 2 bathrooms :D

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