Sell or Rent It Out: How to Decide

When you move to a new home, you face a choice about the old one: sell it, or keep it and rent it out. Both can be right, and both can be expensive mistakes. The decision is not about what feels comfortable, it is about the numbers, the tax position, and what the property is likely to do from here. This is how to decide whether to sell or rent out a property in Singapore.

The ABSD question comes first

If you keep your current home and buy another, the new purchase is a second property, so ABSD applies, 20 percent for a Singapore citizen. On a $1.5m next home that is $300,000 upfront. Selling your current home first, or within the remission window for married couples, can avoid or recover that. So the very first thing to weigh is whether keeping the old property lands you with a large ABSD bill on the new one. Often it does, and that single number decides it.

What renting out really earns

Rent is not profit. To judge renting honestly, work out the net yield: the rent, minus property tax at non-owner-occupied rates of 12 to 36 percent, maintenance, insurance, agent fees, income tax on the rent, and a vacancy allowance. If the net yield is thin, and especially if you are still carrying a mortgage, the income may not justify keeping the property, let alone the ABSD on the next one.

The case for keeping and renting

Renting out can make sense when:

• The property has strong long-term appreciation prospects.
• The net yield is genuinely worthwhile after all costs and tax.
• You do not need the capital for your next purchase, and keeping it does not trigger a painful ABSD.
• You are willing and able to be a landlord, including the quiet months and the occasional problem tenant.

The case for selling

Selling tends to win when:

• Keeping the property would trigger a large ABSD on your next home.
• You need the proceeds to buy well, rather than stretching.
• The net yield is poor and the upside looks limited.
• You would rather not take on the time, risk and responsibility of letting.

The honest comparison

The clean way to decide is to put both paths side by side: the net yield and expected appreciation from renting, against the ABSD saved, the capital freed and the simplicity of selling. Include tax on both sides, and be realistic about vacancy and about prices. Emotion favours keeping, because selling feels final. The numbers often favour selling, especially once the second-property ABSD is counted.

A considered view

There is no universal answer. For some, a well-located property with a solid yield is worth keeping and renting. For others, the ABSD on the next purchase alone makes selling the obvious move. The mistake is deciding on sentiment rather than arithmetic. If you are weighing it, I am happy to run both paths with you and show you which one actually comes out ahead.