Many expats and travellers often hold this sentiment that Singapore has a very high cost of living. Though at present, Singapore is nowhere in the top 5 bracket, it still ranks fairly high being at #10 in the world, according to expat online database Expatistan.
This being the case, it’s important for expats or foreign nationals who plan to stay in the country in the short- or long-term to understand how basic commodities and lifestyle necessities in Singapore are being handled – and what better way to do so than understanding it from the locals’ point-of-view? In this post, we will take a look at the budget considerations when renting a property in Singapore.
5 Budgeting Considerations when Renting in Singapore
And while Singapore is considered one of the most expensive places to live in for expats, there are ways on how to handle this even when on a limited budget based on an average expat’s income from working in the country. Consider the following points when renting an apartment here in Singapore:
- The initial deposit
When you decide to rent a unit, you’ll first be required to provide a signed letter of intent (LOI) with the landlord. As part of this process, you may be asked to settle a good faith deposit of the first month’s rent. Do take note that this can be negotiated as some tenants insist that they see the TA before they hand over a deposit, for example.
This one-time security deposit will no longer be part of your monthly budget after you have settled this payment with your landlord. Because of this deposit, you should be ready with another month’s worth of rent at the beginning (you’ll get this deposit back when you leave, assuming that the property is in good condition).
- Set aside at least SGD 350 for utilities per month.
In Singapore, tenants usually shoulder the utility bills themselves (this includes the cost of servicing air-conditioners, and Internet access). Do note, however, that most internet plans – excluding cable – will go up to around SGD 60 per month. Overall, a realistic amount to set aside is S$350 to S$400 per month.
Also, it’s important to remember that Singapore is a tropical country and the weather can be very challenging – humid – both indoors and outdoors, with temperatures reaching up to 32 degrees Celsius. This means that the AC will almost always be in use, unless you’d rather bear the heat or survive with just a fan. Furthermore, the humidity and frequent rainfall often necessitate the use of a dryer.
- The property agent’s cut
If there’s one glaring bias you’d soon figure out in living here in Singapore, it’s that the country is landlord-friendly. There are no standardized contracts for all tenants, so it’s possible for a landlord to slip in unique clauses that are unfair to you.
As such, the best way to get around this is to have a property agent to represent you. This is advisable for new renters – at least during the first time they rent – then you can ask a property agent about what to look for, what each separate form does, etc. The commission paid to the agent is almost always worth the assurance provided.
Here’s a short list of how much renters would usually pay their agents:
- Two year lease, with rental above S$3,500 per month: Usually nothing (the landlord’s agent will split their commission with your agent)
- One year lease, with rental above S$3,500 per month: You pay half a month’s rent in commission
- Two year lease, with rental at S$3,500 per month or below: You pay one month of rent to your agent
- One year lease, with rental at S$3,500 per month or below: Half a month’s rent to your agent
Agent commissions are technically negotiable, but most tenants’ agents wouldn’t be so much as willing to compromise their fees from the above standards.
- Transportation for a landed property or a non-central condo
The assumption is that if one can afford a high-end condo or a landed property in Singapore, they can also afford a car. Of course, this can’t be true for all foreigners working in the country, but it’s just one of those things that you’ll need to put up with when living here, ultimately.
As such, landed properties and high-end condos are situated much further away from bus stops and train stations than public housing. And while this is now gradually changing, those who are stuck in this situation would typically get by hiring a cab or getting a private hire car often.
Do note that taxis are not cheap here in Singapore, and if you can’t or don’t want to put up with that, then you may want to scout for an alternate location.
Unlike what is practiced in other countries, your landlord’s home content insurance may not cover tenants. If there’s a fire, or water damage, you could end up having to refurnish or replace your stuff at your own expense.
This being the case, you need to ask your landlord if their home content insurance includes you (Note: be specific about home content insurance, not just fire insurance as the latter only covers rebuilding costs, which are practically of no use to you).
And if you’re not covered, you’ll need to buy your own renter’s insurance. Also, consider getting a separate insurance for valuables (e.g. collection of paintings, jewellery items) that exceed the pay-out limit. You can discuss this with a qualified Financial Advisor in order to work out a policy for those valuables, as well.
Again, moving in Singapore can be intimidating on paper because of the high cost of life index, but when your job can afford you these necessities, you can still work out a reasonable price to enjoy your stay in the country and keep your job in the process.