Rent Out Condo Room? Singaporean Landlords Turning to Co-Living Rentals

Aspiring landlords, find out how you can take advantage of the scorching-hot rental market in Singapore right now: from renting out a spare HDB room, a private investment property, to joining a co-living space arrangement.

Record High Rental Prices in Singapore

To landlords’ joy and tenants’ despair, market rental rates in Singapore have hit a record high. Renting out a spare room in your HDB flat, or investing in a private property to collect passive income, are not new concepts in Singapore.

Finding own tenant vs Property agent

Traditionally, landlords looked for tenants either via word of mouth or pasting notices at prominent spots – complete with a fringe of little paper strips, each stating their phone number, for potential tenants to tear off.

Those who don’t mind paying a commission would hire a real estate agent to market their room or property. The more resourceful landlords advertise on Facebook groups such as ‘Singapore HDB Rooms & House for Rental’ in Singapore, and ‘Room for Rent in Singapore’, and even on Facebook Marketplace and Carousell.

Rent out your home with co-living companies

For tenants, other than traditional accommodation like renting a spare HDB bedroom (and living with a landlord), or a whole unit if you can afford it, alternative co-living arrangements have sprouted up in recent years.

Cove Co-Living

Cove is one such company that spotted a gap in the rental market. According to their website, “Cove was founded by Luca, Guillaume and Sophie, three young entrepreneurs determined to bring home rental into the 21st century” who rented 29 different properties across 13 cities around the world.

Read More: Cove Co-Living Review 2023

Tapping on their personal experience, they started a co-living company that is renter- centric.

This includes having Virtual Reality (VR) tours and room listings online, allowing potential tenants to book virtual or real-time viewings, and offering rooms – all private properties which they rent from owners – that already come furnished.

Tenants sign a digital contract, pay a one-month deposit and move in conveniently. Pre-Covid, they even organised community events to cater to their young, cosmopolitan audience looking to make friends.

Covid years saw more locals renting than foreigners did

According to Tan Shi Wei, Cove’s Head of Sales & Marketing, the majority of Cove’s tenants pre-Covid were foreigners, with just 10 per cent being local.

“During Covid, we saw big shifts in the rental market, first with the exodus of foreigners due to changes in working situations and lockdowns. A large number of foreign Cove tenants left to return to their home country.”

At the same time, Cove saw a large number of locals renting with them, due to demands for more living space, driven by the prolonged Work-From-Home (WFH) arrangements and the percentage of Singaporean and PR tenants shot up to 35 per cent.

Currently, it has stabilised at 20 per cent but the actual numbers are even higher than during the Covid days, as Cove now offers a greater inventory of rooms. They currently have over 700 rooms available, with another 500 in the pipeline for 2023.

Rental Demand Rising: More singles desire their own place

Shi Wei says some of the common reasons include lifestyle. With many marrying at a later age, yet preferring to live on their own, they have moved out of their family homes and are renting.

“Many Singaporeans also have different jobs than in the past eg. Digital nomads, jobs with high travel frequency etc. As such, renting is a way for them to experience living differently, in different areas and in different countries.”

Hybrid working arrangements driving demand for studios

As this has become the norm, it’s quite common for many Singaporeans now to be on fully hybrid working arrangements, such as working a few days out of the week from home. “This is driving up demand for studios or large co-living units with ample space,” notes Shi Wei.

More couples waiting for delayed HDB BTO

The large backlog of Build-To-Order (BTO) flats is still contributing to the immediate need for housing. The longer wait times for BTOs post-Covid also means that there is a higher likelihood of young couples needing to rent if they want to move out of their family home.

Renting my apartment on Co-Living websites

According to Shi Wei, landlords like the fact that Cove takes care of all property related services and maintenance issues.

“Other than major structural issues, there is no need for them to be involved in property management. A fair number of Cove landlords are actually not based in Singapore, so having a one-stop service for them significantly reduces the hassle,” she explains.

For some owners who own larger units and find it hard to find tenants with deep enough pockets, co-living arrangements also allow them to optimise rentals by renting out individual rooms instead of a whole unit.

“A co-living model allows for older larger units to potentially fetch higher rents,” says Shi Wei.

Will tenants and renters like the co-living arrangement?

Well, many tenants are priced out of the current rental market. Unless you are rich enough to rent a whole unit to yourself, like it or not, you have to share your living space with a landlord or other tenants – possibly a few friends, if you can round them up – anyways.

“Co-living will always be cheaper than renting the full apartment from the landlord, as such this service caters to singles and people with lower budgets,” reiterates Shi Wei.

In addition, it’s the only option in the market for leases shorter than 12 months. In this red-hot rental market, most landlords and agents will not entertain leases of less than one year, so if a tenant can only commit to a short lease (from a minimum of three months), co-living arrangements like Cove is perfect for them.

Finally, for this tech-savvy generation, being able to book a room online – just like booking a hotel room – is a breeze. In fact, Shi Wei says that 50 pre centof Cove’s viewings are done virtually, meaning that customers outside of Singapore can easily secure a room before landing.

They currently have about 1,000 tenants in Singapore.

“We also try to provide additional value beyond property management. A lot of our work focuses on building communities." Some of the additional benefits include twice-monthly community events, targeted towards new arrivals to Singapore; or people who need an instant community.

Can I rent my HDB on Cove Co-Living?

Here’s the bad news: Cove only works with private home landlords. “Due to legal requirements, we are not able to work with HDB landlords.

Even if you have a private property to let out, Cove is stringent with their requirements. “We source properties in a very similar way to how a tenant might do so.”

Some factors they look at include: proximity to public transport, the size and comfort, facilities in a condo unit, and the unit’s characteristics, such as the number of toilets, common spaces, study areas etc.

Landlords, if you want to try leasing out your unit through Cove, you can get in touch with them directly or via your property agent. They have dedicated strata managers.

How much does it cost to rent my condo on Cove Co-Living?

“It really depends on the type of agreement signed. If it’s a management agreement, Cove will essentially take a cut off the total rental revenue for the unit. Alternatively, the landlord might sign a straight master lease with Cove for a fixed amount monthly, should they require more stability.”

The good news is Cove works with both en-bloc buildings as well as strata units; fancy ones as well as basic ones. “The idea here is that everyone has different budgets, requirements and preferences and we have reached a scale whereby we have a sufficient amount of inventory to cater to all needs,” says Shi Wei. That means your unit, depending on its condition, can be listed under Cove Basics, Classics or Luxe units on their website, which cater to different price points.

HDB Landlords Co-Living Rental

As an experienced landlord of an HDB flat myself, I have been offering my own co-living arrangement for years, even before I’ve heard of Cove. Sure, it is more convenient to lease out a whole unit to a master tenant but I’ve been bitten by bad snakes who sublet my home to an alarming number of subtenants.

If you are legally allowed to sublet your whole HDB unit – that means you need to seek permission from HDB and declare and pay tax on your rental income – you can try what I do and lease out your rooms individually.

Yes, it requires you to manage several tenants instead of one, but you can get up to 20 per cent higher rental for your trouble. The best thing is if one tenant leaves, you still have rental income from the other rooms to tide you over, as you plug the gap for that one room. And trust me: getting a tenant for one room is much easier, faster and more lucrative than finding a tenant willing to take up a whole unit.

As landlords, having steady passive income is all we want, so if you don’t mind the extra dirty work, you could, essentially, have your own HDB Cove!