Knowing Your Rental Value: The Ins and Outs

Many components go into determining rental value and it is often difficult to evaluate their effect on prices. Nonetheless, whether it is the presence of nearby amenities or a property’s location, their financial impact should never be underrated. Read on to discover some of these cost determinants and how they can influence your rent!

Ever wondered what creates the rental price gap between a three-room HDB flat at Toa Payoh and a bungalow unit at Bukit Timah? Apart from the overt differences in location and property size, other influences on rent include on-site features and the general living conditions of the surrounding neighbourhood. That said, here is a list of characteristics which impact rental value:

Property Location

As one of the prerequisites of determining property value, it comes as no surprise that location is also one of the key influences on rental cost. In relation, this factor can be easily analysed by breaking it down into several sub-components involving the quality of residential life. These elements include: the presence of nearby amenities, the cost of available goods and services, as well as public safety.

In a Singaporean context, all three sub-factors are present and this can be ascribed to the country’s reputation as a well-policed, highly developed city-state. However, there are still exceptions to the rule. For instance, travelling towards the city remains a time-consuming affair for Singaporeans who live in locales like Marine Parade and Jurong, which are far from centralized areas.

Property Size

Apart from location, another aspect which shares a positive relationship with rental value is property size. Generally, the larger the square footage of the property, the higher the cost of renting it.

At first glance, this correlation is highly relevant to Singapore’s property market as the country has a persistent struggle with land scarcity. While the problem of increasing land cost has manifested in the form of shrinking properties, it has yet to have a visible impact on estate valuation.

In fact, overall property sale prices have experienced a continuous quarterly decline since 2013 – an effect that has spilled over into the rental market. Accordingly, this can be attributed to a combination of weakened demand for ownership (due to government implemented cooling measures) and unsold inventory. Consequently, both of these trends have contributed to an overall downwards pressure on property rental prices, regardless of their size.

Furniture and Facilities

One more factor that has an innate bearing on rental costs would be the availability of onsite equipment for tenant use. Be it basic electrical appliances or furniture (e.g. fridge, washing machine, bed), all of these trappings play a role in deciding an apartment’s value in the rental market. For private properties, this also extends to recreational facilities like swimming pools and gyms.

Be that as it may, Singapore condominium owners who intend to rent out their premises ought to be aware that they are still responsible for paying monthly maintenance fees under property bylaws. This is because the estate remains registered under the landlord’s name, although it is the tenants who possess the rights to use the amenities.

Condition of Property

Just as important as the above characteristics in deciding rental value is a property’s status. This involves more than the element of age and is tied to how well-kept the premises are. By way of illustration, a bungalow with a well-trimmed, fenced yard has a greater chance of attracting potential tenants than a home with poor upkeep.

More often than not, this is not a problem for public housing precincts and non-landed private properties in Singapore as they are typically maintained by commercial contractors. In the case of landed properties, it is the duty of owners to ensure that their estate is kept in a presentable and attractive condition.

Specialised Needs & Facilities

Last but not least, one more influence on rental value is the degree of hospitability and/or convenience extended to tenants. This primarily involves landlords complying with the special needs of home renters by charging stiffer accommodation fees. An example would be catering to pet lovers and taking the risk of property damage, in exchange for a higher security deposit.

Likewise, properties with unconventional facilities also fetch a higher price on the rental market, owing to their scarcity. In Singapore, this can be exemplified by the Hamilton Scotts Apartment which costs approximately S$8,500 – S$16,000 per month to rent; thanks to the inclusion of a lift garage which lets luxury car enthusiasts live side-by-side their beloved machines.

Check out other rental related articles here: 5 under the radar HDB housing and rental schemes and How to spot an Airbnb unit in your condo (and whether you should tell!)

Find the rental home of your dreams today at Singapore’s largest property portal 99.co!

About 99.co

We are a property search engine with the overarching goal of building a more transparent and efficient property market. We are working towards that future by empowering people with the tools and information needed to find a place to live in the best way possible.

Looking to sell your property?

Whether your HDB apartment is reaching the end of its Minimum Occupation Period (MOP) or your condo has crossed its Seller Stamp Duty (SSD) window, it is always good to know how much you can potentially gain if you were to list and sell your property. Not only that, you’ll also need to know whether your gains would allow you to right-size to the dream home in the neighbourhood you and your family have been eyeing.

One easy way is to send us a request for a credible and trusted property consultant to reach out to you.

Alternatively, you can jump onto 99.co’s Property Value Tool to get an estimate for free.

If you’re looking for your dream home, be it as a first-time or seasoned homebuyer or seller – say, to upgrade or right-size – you will find it on Singapore’s fastest-growing property portal 99.co.

Meanwhile, if you have an interesting property-related story to share with us, drop us a message here — and we’ll review it and get back to you.

Join our social media communities!