Hong Kong has ranked as one of the most expensive cities in the world to live in for decades. With continually rising house prices, renting an apartment in Hong Kong seems to be the only affordable way for employees and young couples to get their dream home. It’s definitely challenging to find a rental property in Hong Kong for first-time renters, but don’t worry! HoldCover’s got you covered with this ultimate renting guide!
1. How to find flats for rent?
You can rent a flat directly from the landlord or through a licensed real estate agent such as estate agency companies or online rental platforms in Hong Kong. The benefit of using a real estate agent to rent a flat is that you will be guided through the whole buying process, making it hassle-free and smooth, but you need to pay for the estate agent fees; on the other hand, renting an apartment directly from the landlord can help cut costs, however, it is not suitable for first-time renters when it comes to complicated rental application process.
Moreover, there are several factors to consider when you’re hunting for your perfect apartment including the price, district, transportation links and amenities. Take a look at the school net if you are a parent; and the pet policy if you have furry friends. The better the quality of a house, the higher price it has, a trade-off is inevitable when finding your dream flat.
2. How to inspect a rental apartment?
When you find a flat that meets your criteria, make sure you carefully inspect the facilities and maintenance condition of the property for any issues, including the humidity, orientation, water seepage and plaster on the walls, hygiene, neighbors and environment. If the flat is a bare shell, you should ask the landlord if renovation will be provided. Before you carry out an inspection of a rental property, always check if it is haunted using relevant databases online. However, it is possible for the information contained in these databases to be incomplete, so use them as references only.
3. Management fee, Government rates and repair costs
In general, the rent payable to a landlord usually covers management fee and Government rates, a tenant shall be responsible for the utilities charges including water, electricity and gas costs, but it is subject to negotiation. The landlord and the tenant should ascertain their responsibility when dealing with issues such as repair costs. All respective duties of the parties involved should be clarified in detail on a contractual basis.
4. Conduct a search of land records of The Land Registry
Before signing a tenancy agreement or a lease, you must check land records from The Land Registry to ascertain the identity of the property’s registered owner and the ownership to avoid property scams. If a flat is held jointly, all the owners should sign on the lease. You can conduct a search of land records through The Land Registry’s counter service or self-service search services at a cost of HK$10 per search.For detailed information, please refer to the website of The Land Registry.
5. Before you sign a rental lease…
The general lease term for renting a flat in Hong Kong is 2 years, consisting of a fixed-term tenancy agreement in the first year; and a periodic tenancy agreement in the second year. If there is an early termination of lease in the first year, the landlord is entitled to be compensated; if there is break clause with enough length of notice in the second year, the tenant can take his/ her deposit back.
Remember to bring your Hong Kong ID Card, sufficient cash and a copy of your income certificates such as pay stubs, an employment proof, or an income tax return (if applicable). Both the landlord and the tenant should sign and keep a copy of the lease. Signed tenancy agreements must be stamped at the stamp office, the rate of stamp duty is 0.5% of average yearly rent (exceeding one year but not exceeding three years) which should be paid by the parties involved in equal shares, HK$5 is also payable for the stamping of each counterpart of the tenancy agreement. The e-Stamping service is available on the website of the Inland Revenue Department.
Tips: If the landlord refuses to stamp on the tenancy agreement to avoid stamp duty, you can still submit the stamping application on your own, but you may have to pay for all stamp duty.
If you’re not familiar with lease terms, there are some free template lease agreements available online. For example, the E-package of DIY Residential Tenancy Agreement published by Law & Technology Centre of The University of Hong Kong can assist the public to enter into a tenancy agreement for their homes without costs and trouble of engaging a lawyer.
6. Rent-free period
Generally speaking, a rent-free period of 3 to 7 days may be offered by the landlord for carrying out fit-out works at the start of the lease. You can negotiate with the landlord directly or through the real estate agent regarding the commencement of tenancy.
7. Deposit
The standard deposit in Hong Kong is 2 months worth of rent, and 1 month rent in advance. If you hire a real estate agent, you should also pay for the commission of half a month’s rent.
Take a flat of HK$13,000 rent as an example, the outlay is listed as following:
Security deposit (2 months worth of rent): HK$26,000
Rent in advance (1 month worth of rent): HK$13,000
Real estate agent commission: HK$7,500
The initial outlay of renting the flat is HK$46,500.
If you have a sufficient budget to pay for 6 months’ rent or even 1 year’s rent in advance, don’t be shy, try to negotiate with the landlord for incentives. Some landlords are willing to give incentives as it reduces the risk of renting a property to rogue tenants.
8. Before you move in…
In order to get your deposit back when the lease is up, you must take pictures and videos of every nook and cranny of the flat before moving in to avoid unnecessary conflicts. If the flat is newly constructed that comes with furniture and home appliances, take pictures of these items as well. Do not make any improvements or alterations to the rental unit without the landlord’s consent; if so, you must obtain the landlord’s prior written consent on a contractual basis.
9. Record the utilities charges
Keep records of the utilities charges including water, electricity and gas. A meter reading should be taken on the first of you move in to ensure accurate billing. Inform the landlord immediately if there’s anything wrong.
10. Buy Home Insurance
It’s important for tenants to protect their personal belongings with home insurance as the home insurance policy purchased by the landlord normally protects his/her possessions only.
There are a wide range of home insurance policies available on HoldCover. With our one-stop online platform, you may compare home insurance quotes from different insurers at once and buy one that offers you the right coverage in just a few minutes!
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Reference: GovHK, Land Registry, Law & Technology Centre of The University of Hong Kong, Estate Agents Authority
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