I Rent Out My HDB for $4,000/Month! But here's What I Actually Keep.

 

Illustration of an HDB flat and Singapore dollar bills representing rental income and expenses breakdown

I've shared my rental income numbers a few times on this blog, from $2,800 to $3,400 gross rent jump in my $2200/month side income update, to breaking even on our ABSD ahead of schedule. But I've never actually sat down and shown the full HDB rental expense breakdown behind those net figures. So today, let's go through it properly with real numbers.

Key Takeaways

• Gross rent: $4,000/month ($48,000/year)
• Total annual expenses (vacancy, agency fee, taxes, S&CC, repairs): $14,906.10
• Net rental income: $33,093.90/year (~$2,758/month)
• Roughly 31% of gross rent goes to costs. We only keep about 69% of the rental figure

The Setup

Our HDB is rented out at $4,000/month, with no outstanding mortgage on it. Since we're not living in it ourselves, it's taxed at the non-owner-occupied property tax rate. Here's everything that comes off that $4,000 before it becomes real "income."

1. Vacancy Between Tenants

We experienced, on average, conservatively, about 1 month of vacancy for every 2 years of tenancy. Typically when one lease ends there are a week or 2 weeks where the unit is vacant while waiting for the next lease to starts. Spread over a year:

$4,000 × 0.5 month = $2,000/year in lost rent, on average

This is easy to forget when mentally calculating "12 months × rent," but unless you get lucky with back-to-back tenants, it's a real cost of being a landlord.

2. Agency Fees (Including GST)

We are renting to students most of the time and its always a 1-year leases, so we pay 1 month's rent plus 9% GST agency commission annually:

$4,000 × 1.09 = $4,360/year

This is one of our biggest single expense line items, purely because our leases are only 1 year long. Switching to 2-year leases would roughly halve this cost on an annualized basis. However we have no luck with longer lease period so far.

3. Property Tax for Non-Owner-Occupied HDB Flats

Our flat's Annual Value (AV) is $19,380, which falls entirely within the first tax tier for non-owner-occupied residential property (12%):

$19,380 × 12% = $2,325.60/year

This is billed once a year, but I always divide it by 12 to see its true monthly cost against the rental.

4. Service & Conservancy Charges (S&CC)

$127/month × 12 = $1,524/year

This is a cost the landlord bears, not the tenant, and comes straight off the rental income.

5. Repairs & Maintenance

We budget roughly $200/year for this. Some years it's less, some years minor fix and replacement of worn out furniture pushes it slightly higher, but this has been a reasonable average over time.

6. Income Tax on HDB Rental Income (at 15% Deemed Expense)

Rental income is taxed at your personal marginal tax rate. For us, that's at 11.5%. IRAS allows a flat 15% deemed expense deduction instead of itemizing actual expenses, which is the method we use:

• Gross rent received (after vacancy): $46,000/year
• Less 15% deemed expenses: $46,000 × 15% = $6,900
• Taxable rental income: $46,000 − $6,900 = $39,100
• Tax @ 11.5%: $4,496.50/year

Since we have no outstanding mortgage on this flat, we don't get an additional mortgage interest deduction.

Full HDB Rental Expense Breakdown

Item	Annual Cost
Gross potential rent (12 months)	$48,000
Less: Vacancy (avg 0.5 month/year)	-$2,000
Less: Agency fee	-$4,360
Less: Property tax	-$2,325.60
Less: S&CC	-$1,524
Less: Repairs & maintenance	-$200
Less: Income tax	-$4,496.50
Net rental income	$33,093.90/year (~$2,758/month)

My Takeaway: Is Renting Out an HDB Still Worth It?

Two things stood out to me when penning down this calculation.

First, the agency fee is a bigger drag than I'd realized, purely because of our 1-year lease cycle. Locking in 2-year leases where possible would meaningfully cut this cost.

Second, vacancy is a real, quantifiable cost even if it "only" happens once every couple of years. $2,000/year doesn't sound like much until you realize it's larger than our entire annual repairs and S&CC combined.

If you're renting out a flat and only tracking the cheque that hits your account each month, I'd encourage you to run these numbers once properly. It doesn't change the fact that renting out an HDB is still a solid source of passive income for us, but it gives a far more honest picture of the real yield is.

What percentage of HDB rental income actually goes to expenses?

Based on this breakdown, roughly 31% of gross rental income went to vacancy, agency fees, property tax, S&CC, and income tax leaving about 69% as net income.

Anyone else in a similar boat? Has switching to a longer lease term actually worked out cheaper for you after accounting for other risks (like a bad tenant locked in for 2 years)? Would love to hear your experience in the comments.

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