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5 Essential Steps When Renting Out Your Singapore Property

Renting out your property is great. Facing a disgruntled customs officer, as he explains which part of your hollow wall your tenants hid their heroin in, is not-so-great. Nor is walking into a darkened apartment, and finding out your late-paying tenant is now in Taiwan Every year, a handful of landlords end up making police reports or chasing runaway tenants. It’s stressful, costs money, and wastes time. In this article, I look at the safety steps every landlord should take:

 

House Keys

Uh, landlord? You might want to take your heart pills before inspection.

 

1. Verify the Tenants’ Papers

If you have a foreign tenant, you’re responsible for ensuring he didn’t arrive via special night sampan. It’s called anti-harbouring; Singaporean landlords are accountable if they shelter illegal immigrants.Sometimes, even if they do it by accident.

There two degrees to this: If a landlord deliberately harbours an illegal, or performs no checks, the penalty is a jail term of six months to two years. AND a fine of up to $6,000.

If the landlord is negligent (performed the checks in a half-assed manner), the penalty is jail for up to a year. And MAYBE a fine of up to $6,000, depending on how much of an “accident” the judge decides it was.

 

Passport for bear

Yeah, seems legit. Now, about your lease…

 

The Ministry of Manpower has clear definitions on what counts as “checking”. When in doubt, use WP Online to verify work passes. Remember, the service in Changi prison sucks.

 

2. Check Your Tenant’s Job

I spoke to landlord Louis Foo, who rents residential as well as commercial properties:

After I experienced some troublesome tenants, I became a bit wiser. There are lots of things to consider, and one aspect is the tenant’s line of work.

I avoid businessmen who claim to be selling “special” schemes, or those who sell products but have no office. I have experienced many such people. They tend to pay late, and have excuses for everything.

I also avoid tenants who work in KTVs. I don’t like to discriminate, but I have had problems. I had one incident, a tenant who worked in a KTV left the country, and was in arrears. Although she mailed me a cheque in the end, it caused me a lot of distress, as she left with no message.

I have also heard from fellow landlords who have tenants in such service lines; none of the stories are good.”

 

Street cleaner

But how do I know these foreigners can keep the flat clean?

 

Louis advises caution with the following tenants:

  • Lounge singers/ hostesses
  • Students
  • Businessmen operating without an office
  • Commissions-only salespersons

Louis acknowledges that it’s not pleasant to stereotype, but “…I’ve had so many problems, I have to be extra careful with such people.”

 

3. Take Photos Periodically 

The tenant says the carpet was stained before he moved in. You say the tenant stained it. Now what?

Fist fight? Coin flip? Arm wrestle? They’d all give you a better chance than a court claim. Because with zero evidence, your legal battle will be more one-sided than a lower-Secondary school gang vs. the CID. So before your tenant moves in, take some photos for proof.

According to Louis, you should focus on:

  • Flooring (tiles, carpets, parquet flooring, etc.)
  • Counter-Tops
  • Curtains and drapes
  • Major appliances (fridge, washer, stove, etc.)
  • Artwork
  • Light fixtures

 

Camera keychain dangled in front of blurred image

The judge is awarding you $200. To buy a new camera.

 

There’s no point in taking photos just once. Your images from 2010 won’t hold up in a legal battle in 2013. At the very least, take photos every six months. Or else you’ll find yourself on Smartloans.sg, digging up a second reno-loan to replace smashed up furnishings.

 

4. Set Rules for Kitchen Use

According to Louis, the kitchen is one of the most common points of dispute:

It is not so much about damage to kitchen, although that is a valid concern. The issue is the type and quantity of food being cooked.

The first time I had trouble with a tenant, it was related to the kitchen. One of the tenants tried to make extra money by baking. If it was one or two cakes, it would have been no problem. But she was baking round the clock every day, and the smells became overpowering.

Then the neighbours complained, and the government got involved; it became a very time consuming issue. Now I am clear on the rules of kitchen usage for my tenants: What sorts of food they can cook there, how much they can prepare, and so forth.”

 

IKEA kitchen

You can cook anything you like, so long as it doesn’t require heat, pans, or ingredients.

 

Louis mentions that some landlords don’t allow tenants to cook at all. This is often the case when the tenant is single, but:

For families, you cannot expect everyone to eat out all the time. So work out the rules with them before anything is signed.”

 

5. Ensure that No One Else is Staying There

This may seem a bit obvious. But Louis suggests you don’t take any chances:

Periodically, check that your tenants are…how to say…really the only tenants staying there.

Sometimes tenants invite others to stay with them without your knowledge. They let their friends or relatives or whoever sleep there. I don’t mean once or twice; I mean it’s as good as if their so-called ‘guests’ moved in also became tenants. 

You will be in hot soup, if this ‘extra tenant’ turns out to be an overstayer or illegal immigrant. My advice is that you drop-by to do spot checks. Every few months, I will visit my tenants; I bring them some fruits, chit-chat and catch up with them. At the same time I am keeping my eyes open.

 

Crowded HDB flat

How about this deal: They can only stay over on days ending with ‘Y’. 

 

But Don’t Get Paranoid

For the most part, landlords in Singapore encounter few problems. Renting your property to cover mortgage can be a great idea…provided you get the right tenants.

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