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A Guide to Finding Home Rentals in Shanghai, China

Article and Photos by Alison Harley

A few years ago the only “laowai”—theChinese term for foreigners--arriving to set up life in Shanghai were doing so under the protection of company relocation. Be it an employee of a multi-national corporation or a student at a language school that provided lodgings, new arrivals were taken care of when it came to finding a home.

But things have changed and many more people are arriving “unaccompanied” and eager to seek out the employment and entrepreneurial opportunities of this booming, “frontier” city.  

A year ago my husband and I moved to Shanghai on short notice, found and moved into an apartment within two weeks, without having previously set foot in Shanghai .

So if you are arriving unaccompanied, I offer here a few tips on finding a place to call home, Shanghai style.

Rental Values

You may be surprised how expensive Shanghai rents are, particularly when you see new residential complexes being advertised daily while many stand dark and uninhabited come nightfall. Surely the factors of supply and demand should mean there are rental bargains galore?

Not quite, there are bargains but you have to hunt for them. In Shanghai there are a number of additional factors that have to be considered: 

The first is the expat package, paid by companies to their relocated executives, often including extremely large rental allowances, which result in over-inflated rental prices for any property approaching “Western living standards.” 

Second is the definition of “Western living standards,” which in the complexes built specifically for foreigners far exceed anything you’d expect in your home country: Executive standard properties complete with 24-hour security, gyms, tennis courts, swimming pools, etc.

Thirdly, you’d think if an apartment were empty the landlord would just be glad to fill it. Not necessarily. Many Chinese owners have bought the properties for cash and at Chinese pre-construction prices, so with no mortgage to worry about they can hang on for the next large expat rental allowance.

Finally there is the fact that for everything in Shanghai there is an unspoken two-tier pricing policy  – the Chinese price and the laowai price-- never truer than for property where it is estimated the price offered to foreigners can be anything from 10-40% higher than that offered to a local.  

Getting Started

Do as much research as you can before you arrive. Look at the profiles of different areas of the city, set your budget and email agents asking for property details. Draw up your wish list. You will change your requirements, and maybe your budget, once you start viewing apartments, but you need a starting point.

Short-Term/Temporary Lodgings

Most people arriving in Shanghai head to a hotel, but if you are paying the bill you will only want this to be a short-term option, even if you are staying in one of the more affordable Chinese hotels.  Some people decide to bridge the gap between hotel and home by taking a short-term rental for anything from 1 to 6 months. This can be a good option if you are not sure where you will be working or just want to get to know the city better. Check out serviced apartments as they will often accept a shorter lease, or ask the landlord for a 6-month contract with the option to renew. You will have to pay a little extra for either of these options, however, as shorter leases do come at a premium.

Finding a Rental Agent

The division between properties rented by foreigners and by locals use to be distinct, but this is no longer the case, with many wealthy Chinese renting in the “expat compounds” and many foreigners living with the locals. At the same time, the distinction between agents is becoming blurred, but in general terms there are two categories: Expat agents and local agents.

Expat Agencies

Set up to deal primarily with foreigner relocations, they have English speaking staff, English language websites, cover the whole city geographically and deal in the mid to top price range of properties--most will have a minimum rental cut off anywhere between 6,000–10,000 RMB per month.  You will find these agencies by searching on Google, or looking at listings in the Shanghai Yellow Pages or in the classified sections of all the English language magazines and newspapers in Shanghai.

Local Agencies

While their main business consists in sales to locals, they also offer rentals. Prices tend to be more affordable, as they are aimed at the local market and there bargains are to be had. The main problem, if you are not a Mandarin speaker, is that the levels of spoken English will vary considerable. Also each agency tends to only cover the area in which it is located so you do not get an overall city perspective.

To find local agents, first enlist the help of a Chinese friend or work colleague. Then visit the area in which you are interested to find the newest looking residential complex. In high-rise Shanghai this is not difficult.  In one of the adjoining streets you will find a line of newly opened offices of local agents. They pop up overnight as new complexes are completed and move on once the properties are sold or rented out. 

As they deal primarily in sales, they do not hold many details on rental properties other than price, property size, and location. So ask the agent to call the landlord and get further details, such as: Is it furnished? And if so, the furnishings are in which style–modern/traditional/Western/Chinese? Has it had previous tenants? Ask when was the apartment last refurbished? 

Agent Commissions   

The local government sets a figure of 70% of the first month’s rent, which, in theory, is to be divided 50:50 between you and the landlord. However, for higher-value properties the landlord will normally pay the full 70% while other agents may charge you a full first month’s rent.  Make sure you ask, and if you are not happy negotiate or change agents.

Searching On Your Own

You may decide not to use an agent at all. Properties are advertised on expat websites, in the English language newspapers and magazines, and on their websites.

If your Mandarin is good enough you will also have access to the Chinese property websites, and if not it is time to call on that obliging Chinese colleague again.

One factor to consider if you do decide to go it alone--renter beware--without the buffer of an agent be extra vigilant when it comes to signing the contract, make sure all aspects have been dealt with and see the checklist below. 

Factors to Consider When Renting in Shanghai

Location, location, location

The big divide in the city is between the twisty, character-filled lanes of Puxi (west of the Hungpo) and wider avenues of the recently developed Pu Dong (east of the Hungpo)--with each side containing its own residential pockets.

My advice would be to live near where you work, as commuting in Shanghai is like any city--best minimized if at all possible. The streets are gridlocked while tunnels and bridges over and under the Hungpo are at standstill during morning and evening rush hours. The metro, while clean and efficient, is a heaving mass of bodies with staff employed to push you into already over-jammed carriages. 

Types of Property

Apartment versus villa: This will mainly be dictated by your budget, as villas tend to be larger and more expensive.  

Serviced versus non-serviced apartment: The term “serviced apartment” used to mean an apartment not unlike hotel living: Daily maid service, the use of all facilities, etc. However, today the range of services offered in serviced apartments in Shanghai is enormous, from the totally luxurious – simply arrive with an overnight bag and the rest is provided -- to a basic apartment that will accept a shorter lease and maybe includes in weekly housekeeping. Make sure you’re clear on what is and is not included.

Non-serviced apartments are “regular” apartments and since most people employ an ayi (aunty in Chinese--a housekeeper/ cleaner), you will end up with your regular apartment being “serviced’ anyway. 

Developer versus maopei properties: Residential complexes will either be  ‘”developer” complexes--where the properties are sold finished, leaving the landlord to add only the furniture and curtains--or they will be maopei complexes---where the properties are sold as concrete shells leaving the landlord to complete the interior, e.g. fit the kitchen, bathrooms, flooring, doors, etc.

You will therefore get a far greater range of standards and styles in maopei complexes.

In a developer complex the properties may be owned and rented by the developer or management company of the complex or by individual landlords, while maopei properties tend to be owned and rented by individual landlords, a factor that can impact on the rental value.

English-Speaking Management /Landlord

Everyone in Shanghai has a “problem in the middle of the night” story – a blocked toilet, typhoon rains coming through the ceiling, the fire alarm you never knew you had going off at 3 a.m. On such occasions you need to be able to call someone. The level of English spoken in residential complexes varies considerable even in the “expat” compounds, so inquire about getting service when you are viewing your future lodgings.  

Shifting Sand

Living in Shanghai you quickly learn that nothing is ever as set in place firmly as it may first appear. There is a sense of sand shifting beneath your feet.  The golden rule is that everything is negotiable and most things are achievable, so bargain hard; it is what the Shanghainese expect.

Rental Cost Savings Tips

The helpful Chinese colleague: The largest cost saving tip is to speak and read Mandarin. However until you do speak the language fluently, enlist the help of a Chinese colleague to look up Chinese rental websites and to make the initial property/price enquiries on your behalf;  they will be quoted a different price than you would. Get prices in writing because once landlords realize it is a laowai renting, the price may go up.

Who is paying the rent? Make it clear it is you and not a company paying the rent.

Pay quarterly: Offer to pay the rent quarterly. Landlords often prefer this as it means more money up front and less hassle at the bank. Plus, once you have visited a Chinese bank to make that first rent payment you will be glad that you are only doing so four times a year, as nothing moves fast and the simplest transaction will result in being buried in paper work.

Shang-low: Height is prestige in China, so opt for a lower floor and pay less rent.  

Extras: A lot of rentals have optional extras e.g. gym membership, parking space, etc. Decide what you want and do not want and negotiate.

Unfurnished: Opting for an unfurnished apartment may lower your rent, although you need to factor in the hassle and expense of buying furniture--unless yours is being shipped over. There is a large IKEA in Shanghai, with reasonable priced European-style furniture and any number of shops/ markets selling traditional Chinese furniture. If you do not like the furniture in the property, negotiate its removal/exchange before you sign.

Do Without a Fapio: A fapio is an official receipt which the landlord should give you in return for the rent.  If your company is paying, you will require one. If you are paying then you can offer to do without one, which means the landlord can avoid paying tax on the rental earnings--a savings they may pass on to you.

Long Lease: Most leases are for a minimum of one year but if you sign for a longer period the landlord may reduce the rent.  Many landlords would prefer a 2-year lease, but agents tend to favour a 1-year lease as they get a renewal commission.

Formalities: The Rental Contract Checklist

Length of lease: Usually a minimum of one year, although some may be for 6 months.

Rent and deposit: Usually one month’s rental in advance and two or three month’s refundable deposit, payable when the contract is signed. The deposit will be returned at the end of the contract once all bills minus any damage are agreed upon. 

Currency: Some rents are advertised in one currency and payable in another, e.g. USD & RMB. In such a case you must make sure that you agree upon an exchange rate.

Utility bills: You will normally be expected to pay for the electricity, gas and water, phone, and Internet bills.  Make sure you know how to pay them e.g. to the landlord, management company, or at the local shop. Insist that you see the original bills.

Installations: Be clear who is paying for the installation of phone and Internet lines, cable and/or satellite TV.

Management and management fees: Ensure you know who is responsible for repairs and who to call if there is an emergency.  The landlord should be paying any management fee charged by the complex.

Facilities: Be clear about what is included and for what you will be paying extra,  as many complexes have sports clubs which charge for membership. If you want use of them it can be more cost effective to negotiate membership as part of the rent.

Furnishings and fittings: Check what is included. Many Chinese homes do not have an oven, and you cannot drink the tap water in Shanghai so ask for a water machine to be provided. 

Taxes: The landlord should be responsible for any tax related to leasing the property.

Insurance: The landlord should be responsible for the premises and furnishings insurance. You are responsible for your own belongings or contents insurance.

Legal ownership: Ensure that the landlord is the legal owner of the property. If the apartment is part of a government housing block the landlord must own the apartment, otherwise he will be subleasing and you could be asked to leave.

Language: Contracts are written in both Chinese and English with the Chinese version having precedence in the event of a dispute.

Resident permits: You do not need a residence permit to sign a lease, and any kind of visa is acceptable.

Registering with your local Public Security Bureau (PBS): Ensure that the agent or the landlord register for you as soon as you move in. PBS will require your passport and a copy of the lease. Once you are registered you will receive a Registration Form of Temporary Residence, which you must keep. If the agent/landlord does not do this on your behalf then you must register yourself. If you do not then you can face a large fine.

Shanghai average rental prices per area – July 2008
Note: prices are in RMB, are subject to variation during high/low seasons and will vary according to floor level. Low/Med/High represents the quality of the apartment.

Areas

Apartments rented by individual landlords

Apartments rented by developers/management companies

Jing An, Luwan, Puxi

Low 7,000-12,000
Med 12,000-25,000
High 25,000 +

Low 22,000-29,000
Med 30,000-39,000
High 40,000+

Xu Hui, Puxi

Low 5,000-9,000
Med 10,000-22,000
High 23,000 +

Low 23,000-29,000
Med 30,000-35,000
High 36,000 +

Hong Qiao, Puxi

Low 5,000-9,000
Med 10,000-16,000
High 16,000 +

Low 24,000-28,000
Med 29,000-35,000
High 36,000 +

Minhang, Qingpu, Jiading, Puxi

Low 3,000-5000
Med 6,000-10,000
High 11,000 +

Low 12,000-18,000
Med 29,000-25,000
High 26,000 +

PuDong

Low 6,000- 10,000
Med 11,000-19,000
High 20,000

Low 20,000-29,000
Med 30,000-34,000
High 35,000+


Areas

Villas rented by individual landlords

Villas rented by developers/management companies

Xu Hui, Puxi

Low 20,000-25,000
Med 26,000-34,000
High 35,000+

Low 35,000-39,000
Med 40,000-44,000
High 45,000 +

Hong Qiao, Puxi

Low 18,000-28,000
Med 29,000-39,000
High 40,000+

Low 40,000-49,000
Med 50,000-69,000
High 70,000 +

Minhang, Qingpu, Jiading, Puxi

Low 14,000-18,000
Med 19,000-24,000
High 25,000 +

Low 25,000-34,000
Med 35,000-44,000
High 45,000 +

PuDong

Low 14,000-22,000
Med 23,000-29,000
High 30,000 +

Low 35,000-49,000
Med 50,000-59,000
High 60,000 +

Pricing information kindly provided by Shanghai Properties: www.shanghaiprops.com. Contact: info@shanghaiprops.com.

Useful Links

Expat websites:
www.easyexpat.com/en/guides/china/shanghai.htm
www.shanghaiexpat.com

Newspapers, magazines & websites:
Shanghai Daily: www.shanghaidaily.com
Smart Shanghai: www.smartshanghai.com
City Weekend: www.cityweekend.com.cn/shanghai/