Many of us want to move out of our parents’ homes when we come of age and you may be wondering if this option can be a good choice for you to make.

Living with your parents until you get married is the norm in many countries, including in Singapore, especially considering the high costs of renting. Many singles opt to live with their parents even if they have worked a few years, e.g. over 30 years old.

In Singapore, locals can buy their own HDB flat when they are 35 years old. But what if you want your own space before you have reached eligibility to buy your own flat?

There are various ways you can opt to rent in Singapore.

HDB rental

Many owners of HDB flats lease out their spare rooms and this is usually the cheapest option. You can rent a room for around $500 a month for units in the Rest of Central (RCR) region, but you will need to be at least 18 years old.

Generally, the more central and mature the estate, the more expensive the rent will be. 

You can also opt to rent out an entire unit, which usually costs a few thousand dollars a month.

The minimum length of lease in Singapore is six months for HDB flats, up to a maximum of three years. Most properties are usually rented out for more than one year, with six months leasing the rare cases.

Private properties

The rental rate tends to follow a per square foot (psf) basis and is usually reflective of the going rates in the district of choice. Some districts have higher rental rates due to their proximity to the city centre, while suburban properties tend to have comparatively lower rates.

The lease must be for at least three consecutive months, although most landlords will usually not agree to this short-term rental. Some landlords may agree to lower the rent if you sign a longer lease, which is something to consider when negotiating the price.

Co-living spaces

You can also consider co-living spaces if you are okay with sharing your living environment with others. The rates usually range from $800 to $2,500 a month.

Many of these spaces offer an all-inclusive rate, where electricity and water bills are included in the monthly rent, along with group activities that you can participate in to get to know more people.

Some co-living spaces include Cove, Coliwoo, Figment, and The Assembly Place.

Other costs to note when renting

Be prepared to fork out a security deposit - to cover the costs of fixing any damage to the property when you leave, or in case you have to break the lease early. The usual convention is one month of rent per year of lease.

Don’t forget to take furniture costs into account when setting your rental budget. Some units or rooms are not fully furnished, and you may have to supply some of your own furniture. Even if you buy most of your furniture from Taobao or IKEA, it will still cost you a few hundred dollars.

When looking at potential rental spaces, take note of the electrical equipment – such as the fridge or washing machine - and whether it’s in good condition. These items usually cost more.

If you are eyeing a private condo, consider whether you will realistically use the facilities - like a pool or gym. If not, you will be better off renting a place without these amenities. 

Some budgeting tips to consider when renting a location

Create a rental budget

Set a realistic rental budget range before you start looking for a place to rent. To help you to stick to your plan, only search the listings within your budget range.

Setting a budget depends on your income but a general rule is to cap it at 30% of your income, so that you can set some money aside for savings and build your emergency fund.

Calculate the costs for transport

Do you take public transport or prefer private? Calculate and include the costs of commuting in your decision-making process when considering a place. Even if the rental price is fair, it may not be such a good deal after considering its location and proximity to your work, school, family, etc., especially if the location is out of the way and you don’t own a vehicle.

Factor in the electricity, water bills, and food costs

Consider if you must pay for the electricity and water bills. Factor these into your total rental costs for a more accurate picture when shopping for a place.

How about food costs in the area? If you are renting a place that sells more “atas” food like the CBD or Joo Chiat, you need to factor in the food costs. Or consider cooking at home to save money.

Continue to build a savings pot even after paying for rent

Work out a plan to continue saving while you pay rent, so that even if you meet with a financial crisis in your life you can continue to afford to pay your rental costs.

This content is part of the Temasek – Financial Times Challenge, a financial literacy education series in Singapore for youths.