Renting out the HDB flat

We had to make a decision sooner or later about whether to rent out our HDB flat or to sell it off.

On one hand it would have been nice to have nothing to worry about back in SG when we moved to Oz. What is there to worry about? A lot actually. Depending on how trustworthy your occupants are, there's always the question of what state they are going to leave your home in when they leave. Perhaps I am being too sentimental here but this abode has sheltered me well for the past 14 to 15 years and it would be great knowing that it's being well-cared for. Even more worrisome is the potential to fall afoul of HDB rental rules that could potentially result in the repossession of your flat. We are after all just leasing the flat from HDB as a form of home ownership.

On the other hand, renting out the flat means having a passive stream of income. It means that there is less pressure to find a job immediately once we are in Oz. It also leaves a backdoor in place, just in case things down work out with the move. With properties as expensive as they are right now, if and when we have to move back to Singapore, would we even be able to afford a place then?

As of last month, we finally decided to rent out our home.

In no particular order, these were the issues that had to be tackled. Getting your place out there for people to rent - finding an agent. Deciding who you're going to appoint with your Power of Attorney (POA) and actually getting it done. Clearing stuff from the home. Collection of rental. Transferring of money to Oz account. Taxation issues. Applying for HDB permission to sublet out the flat.

Agent:
We called up, emailed and spoke to agents who were friends of our friends. The first agent I called, we got the number of one of the flyers we find so frequently deposited in our mailboxes. The 2nd I emailed one of the major property realtors in SG and obtained a quote for their services. The 3rd, was an agent our friends had used. In all cases, the fee for the agent is one month of rental for a 24 month contract.

I was worried about maintenance of the flat - did not want to deal with repairs and stuff from another country and the agencies told me that there was a difference. To rent out the place, I would need a property agent. To manage the place, I would need a property management agent. The latter would incur an additional cost on my part. I was quoted 10% by one company and 5% by another. That's quite a lot and I have to admit, by then I was wondering if it was even worth it to rent out the flat. Luckily, the 3rd agent we spoke to did not require any management fees. Is there going to difference in service standards and would we regret our decision later? I don't know but we'll see how it goes.


POA:
You will need one. It's in the HDB rules, along with a whole bunch of others for subletting out your flat while you are overseas. This meant looking and paying for legal services to do up the POA. Again, there was a wide range in the fees being charged. We managed to find a solicitor who was charging $160 per POA. Went to his tiny cubicle of an office, 10-15 mins and we were done. He would then fax the necessary to court and within a day or two, we received the POA in our mail.

Applying for HDB permission;
This step can only be done once the POA is done and after a tenant is found. It can be done electronically.

Not sure how the rental money is going to come in. Most probably through our bank accounts, which would necessitate money transfers to Oz. Good thing my Aussie bank account has been setup just that I'm still sourcing for a reliable and cheaper way to transfer money between accounts.