getting a house for rental returns
getting a house for for the purpose of generating rental revenue may have slightly different criteria as opposed to buying the property for own-stay. some things worth considering when purchasing a property for rental returns as follows;
location
the locations that will provide stable rental revenue are obviously in the prime luxury areas such as district 9, 10, 11 but the investments poured into these areas may be too high for some and may not be able attract “sufficient” rental return (due to high capital costs involved).
other possible locations to look into are “little enclaves” which are popular with expats. look in areas where there are private or international schools, or possibly with a congregation of companies hiring large number of expats. at woodlands, there is american school. in serangoon area, there is french and australian school … you get the idea … see a map showing location of international schools in singapore.
the view
apartments with good views will be able to attract tenants. rentals for apartments with good sea view can get 10 to 20 per cent higher rental than those without.
tenure
a leasehold property will command a higher rental yield than freehold property because you pay less when you buy a leasehold property but is able to get similar rental as your neighbouring freehold condo. tenants aren’t bothered whether the property is freehold or leasehold. they are only interested in “how much” and “what does it come with … 32″ lcd tv?”
facilities
pool and security are usually must-haves, in fact, its usually the larger the better (i meant the pool). other than the standard, tennis courts and gym, there are some condos which are like mini-towns. for instance, pandan valley has got shops and services that not only serve the estate residents, even some of the neighbouring condos’ residents find the services very useful too. a condo that is not well-located (as in not being near to a town centre or having sundry shops within walking distance) should have such shops within the development or else residents might be very put off by the hassle of having to travel 20 minutes just to buy a packet of instant noodles.
accessibility
by this, we mean public transport (bus and mrt) and also major roadways. singapore may be a small island and 1st time tenants always say “aiyah, you know har, where i come from (as in country), the place so big, travelling takes a long time. singapore so small, how long can it possibly take???” 6 months later, they return and say … “aiyoh, even though singapore so small, the waiting time for bus very long leh and so many traffic lights, i drive home from cbd to punggol takes almost 1 hour everyday (coz jam at the cte!)”.
layout
go square. don’t believe? try going to furniture shops and see how many circular beds, sofas and tv consoles you can find …. squarish layouts are more popular. the best would be apartments with square everything … square living, square bedroom, square bathroom if got even better.
master bedroom size is important also. it should be reasonably big because expats (especially europeans and americans like big bedrooms) but it can be quite hard to get a good size bedroom in new condos nowadays. lookout for layouts that are more “open-concept” for the public / entertaining areas such as living adjoining dining adjoining kitchen. this allows good natural lighting into the house and gives a more spacious feeling.
furnishings and decor
go for white / pale neutral colours. clean-cut, simple, modern furnishings are usually the way to go.
whether to go fully-furnished or partially furnished depends a lot on your target group of tenants. mostly, large apartments should be catering to families and they will have furnitures already, so partial’s better for them. smaller apartments usually serve singles / couples and they wouldn’t have invested too much on furnitures / appliances so they would like to have the apartments fully furnished to save them the hassle ( + plus it is usually the tenant’s wife who goes shopping to accessorize the apartment, expat singles don’t have the leisure of such time).
renting furnitures have also become more popular of late and it allows flexibility because each new tenant can simply go and choose what they like and the rental company takes care of the moving and storage so its one less headache for the owners.