How Not to Rent Out Your Condo


Congrats on your new condo purchase. It’s a significant milestone in your investment journey.

You diligently studied the property market and got in at what you think is the right time.

And now, all that’s left to do is to find a tenant. Yes, you’re renting out your spanking new private apartment, fully furnished.

As a person who’s always well prepared, you’ve done the necessary calculations. To get a rental yield of 4%, you need to rent it out for $4k a month.

Any takers, you ask.

You contacted several agents, who duly put up advertisements per your requirements.

Alas, after a week there’s still no taker at your asking price. Highest offer is a pathetic $2,700, and only for a 1-year tenancy.

Should you bite?

Let’s do the maths.

If you take the offer, you’ll get $2,700 x 12 = $32,400 in one year.

Should you decide to wait, you will be incurring the opportunity cost of $2,700 for every month you leave the condo empty.

If you finally get it tenanted one month later, it needs to fetch a rental of $2,945 in order to match the $32,400 you could have earned in the same timeframe.

Two months later, the figure will be $3,240.

Three months, $3,600.

You get the idea.

So, armed with this knowledge, you need to quickly decide whether to accept the current highest offer.

Should you accept the $2,700 offer?


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  1. Considering the number of apartments I know that stayed vacant for years because their owners were sticking with (b) I am surprised to see (a) is leading the poll

    (I think you need add add (c) “I wait for the next en-bloc”)

  2. even if it’s fully paid, i wouldn’t want to forego the rental income unless i’m so rich that i can keep the condo as a weekend place for relaxation.

    to charles: don’t the owners of the vacant condo know that they are losing out on thousands of dollars? or maybe they are just rich.

    but i do know that there are many young people who are investing in condos with the hope of getting rental income. to these people, my humble advice is that it may be unwise to leave the units empty for too long (as the blog post above is alluding to).

  3. observer is it really the “so rich” that leaves condos empty? My relatives left their $950K seaview East Coast condo empty for over 10 years and they refused to rent it out because having others live in it will stain the place and they can’t bear. Its fully paid up and in fact even though its leasehold its market price is higher than what they paid for.

  4. you relatives are definitely in the “so rich” class in my dictionary. over 10 years, i think they are “losing” about 300k to 400k in lost rental income. if they already have a place to stay, why buy another one just to leave it empty?

  5. lucky: pretty incredible. I guess that’s why they say rich people are quirky. We sure do have quite a few rich people in Singapore.

  6. if 4k is 4%, then 2.7k is just 2.7%. is the rental market so bad these days?

    2.7% is very low, not forgetting that the aspiring landlord also needs to pay interests to the bank if he’s taking a mortgage.

    what’s worse is that interest rates are bound to go up very soon. we’ll see.

  7. Hi,

    2 case studies: 3 mass market (99 years) condo(s) & 1 freehold terrace house belonging to 2 families.

    In all cases, the rental barely cross S$2.5K.

    Lesson learnt: Do not wait too long. Opportunity costs are real ‘value’.

  8. Analysis & facts on

    There is already a major oversupply of condos on the rental market and many more coming on the market. IRs bring in foreign employees who can’t afford condo rents. Don’t believe the hype from the developers. Expats are not crazy and will negotiate down the rent. They will also not settle for living in a Mickey Mouse apartment of 300 sqf when they can get a bigger one.

    Those are the reasons why a lot of people are investing in resale HDBs now!

  9. invest in HDB flats? what a strange concept. HDB flats are meant to provide affordable housing to the majority. when did it become an investment instrument? in the 80s or 90s?

  10. Poor but surviving on

    well, if u ask me, if u buy a 3 room hdb flat and rent out at say 1.5k a mth, u may be able to recoup the investment in 15-20 yrs.

  11. Analysis & facts on

    Who is talking about renting out HDB? The prices of HDB flats have increased two-fold in the past five years. Just with the COV you are able to make a handsome profit.
    The best thing is to buy a resale with a bankloan instead of CPF: less rules and instant cash at sale.

  12. I think increasing property value is not a problem as long as it reflects the increasing prosperity of a nation that is sustainable and not due to speculation. The problem obviously is how to tell one from the other.

    I don’t really agree with Analysis and Facts assertion that foreigners aren’t stupid, or rather they are indeed not stupid, but they were/are not very good bargainers or since it’s paid for by the company, they don’t care much. Maybe things have changed somewhat with the onset of local packages for expats, but if you look around prices for new contracts are still pretty high i.e. a 3 bedroom condo around 1400 sqft still goes for 3000 in average.

  13. as mentioned above, property values have increased 2 or 3 fold in recent times.
    when has our productivity / pay slips increased by this level ?
    in today’s singapore, the increasing property values only serve to raise up the cost of living, & draining precious reserves into a most unproductive venture.
    singaporeans never seem to learn anything from the many recessions over the years.

  14. Hei I actually agree that property prices are too high here. I am actually a foreigner. My income is quite high, but I am not buying any property or car here as long as I am able to. You’ll simply become a slave to those.

  15. great to see that as a foreigner, u observer & agree too, except i wonder why even hdb is pricing new hdb duxton + redhills > $500k & ministers are applauding themselves for the increasing costs ???

  16. Analysis & facts,
    why do u say it is best to buy resale using bank loan? cos im still reluctant to take bank loan, scared of the interest. can every 3 yrs finance for 30 years meh?

  17. To 4roomer: if you can stay 40 years old always, you can always refinance your loans every 3 years for 30 years tenure…:) Anyway, all banks have a limit to the age ceiling when your tenure ends. Most give up to 70 years of age. At the point of refinancing, you just take 70
    minus your age, or average of you and your wife’s age. The result will be your max. Tenure.
    To magnumao : that should be the model answer you seek.

  18. GO Direct Developer on

    If you are considering renting out your condominium unit to tenants below are … If the maximum number of rentals has not been reached or if there is no rental.

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