Expats coming to Shanghai face many questions and uncertainties. From searching a property, how to even decide for a location in this supersized metropolis, over bartering culture, up to visa and contract formalities. We have collected the most commonly asked questions that our expat clients in Shanghai need answered.
Do I need a residence permit to rent a property in Shanghai?
Renting does not require a long-term visa or residence permit. However, long-term stays (without the need to leave the country in-between) require a residence permit.
When should I start house hunting in Shanghai?
This really depends on the kind of rental you are looking for and whether you can or must give notice to your current landlord. If you are looking for a room in a shared apartment, 1 to 3 weeks should be enough. The same applies if you are looking for your own apartment, but below 8,000 RMB/month. Competition among tenants for nice apartments in this price segment is high, which means that landlords don't want and don't need to wait for a tenant to move in several weeks later. When an apartment at this price becomes available, the landlord can inform some agencies in the neighborhood and within a week it will very likely be rented out. The higher your budget climbs from here, the more time you should plan. 1 to 2 months are good for a typical expat apartment budget of 10 to 30,000 RMB/month, and 1 to 3 months for villas in the suburbs.
Is it true that foreigners are charged higher rents than Chinese people?
This does happen, but landlords who try to squeeze money from foreigners are not the only ones to blame. Many expats have a dedicated housing allowance for taxation reasons as part of their compensation package. As long as the rent stays within this allowance there is little reason for firm bargaining and landlords know that. Until 2019 Chinese workers did not have the possibility of tax deductions for their rental expenses. Now Chinese can get a deduction of around 10% of their monthly salary for housing costs, which is way below actual expenses, which still gives Chinese strong reasons for tough negotiation.
Is there anything I should know about the Chinese Real Estate Market and Agencies?
One of the most important things you should know is that Chinese real estate agents are not required to obtain official certification or attend formal training in order to work in this industry. Housing prices are high and so are agents' commissions, attracting people that range between ambitious and greedy.
Further, sellers and buyers, landlords and tenants do not work with one agent or agency exclusively. Landlords and sellers often inform as many agencies as possible about their property's availability, while buyers and tenants often go windows and online shopping. For expats who want to rent, that means: If you see an interesting property listing online but already have established contact with an agent who you trust, there is a good chance your agent will be able to show it to you. At the same time, agents will initially assume that you are in contact with many agents. If you don't show interest in the property suggestions during the first few days, agents will think you are working a competitor already and direct his focus to customers he sees higher chances with. Of course it is of course (and advised actually) to contact more than one agent, but in your own interest, you should not exaggerate. Back when I was working in a relocation and housing consultancy, I met a person who came into our office, proudly proclaiming that we were the 17th agency he was visiting during the weekend and whether we would be able to show him something spontaneously during the next 2 hours. Don't be that guy.
Will agents charge a house finding fee?
It depends. Normally tenants and landlords both pay a fee of 35% each, once a deal has been finalized. If your monthly rent/budget is above a certain amount, the dynamic changes and the landlord will cover the whole commission payment. Most agency set this amount at 10,000 RMB or 15,000 RMB.
How do I pay rent? Can I pay in a foreign currency?
You can pay the rent by bank transfer, Alipay, WeChat Wallet, or in cash. Most landlords will insist on being paid in Chinese Yuan of course to avoid the cost of currency exchange. Therefore you are advised to prepare a sufficient amount of Chinese Yuan in time.
How much upfront cost do I have to expect when signing a rent contract?
Rent in Shanghai is prepaid monthly, bi-monthly or tri-monthly, with the first two options being the most common. A security deposit needs to paid before moving in, equal to between 1 month and 2 months of the monthly rental. Often you see the combination of monthly rental payments and a deposit of 2 months' rent, or tri-monthly prepayment and a 1 month deposit.
If you found the property through an agent, there might also be a commission fee to be paid, normally 35% of 1 month rent. Lianjia, the country's largest real estate agency, has recently increased their commission fee to 50%. In total you should have prepared 3.35 to 4.50 times of your rental budget in Chinese Yuan, which can be quite a challenge to arrange in a short time for new expats. If you are not able to have this amount ready before you move in, you need to bring this to the attention of your agent and/or landlord during the contract negotiations to see if something can be worked out.
I found an apartment that I want, what now?
Congratulations! Unless you are overpaying, it is important to be quick, or others might take it. Ask your agent to discuss the basic conditions of a rental contract, such as price, move-in date, lease duration, included items (management fee, tax invoice, clubhouse fee, etc.) and also ask him to prepare an earnest money agreement. This means you will make small deposit that is connected to following through with the negotiated contract. If you change your mind you lose your earnest money, if the landlord changes his mind, they will have to pay a penalty.
What happens if I break my lease contract and move out early?
The landlord will be entitled to keep the security deposit. Often you can avoid this by introducing another tenant who takes over your lease under similar conditions.
What is fapiao and do I need it?
Fapiao （发票) is a Chinese tax invoice. If your company provides you with a housing budget, you will need to give a fapiao to your company each month, otherwise your housing allowance will be considered normal income and fully taxed. Some landlords do not want their rental income to be official, and all of them want their tenants to pay the rental tax (depending on the housing type the tax fee is between 3 and 7%). Unfortunately this is widely accepted, but you can always try. If the landlord will not ask for extra money for your fapiao, you should however not expect further success in negotiating the rent.
What happens if I forget registering my new address at the police station after moving?
When you enter China or change your residence, Chinese law requires you to register at the police station, providing your passport, the rental contract, and the property owner's ownership along with a photocopy of the the owner's ID card. Some police stations have a dedicated form (in English & Chinese, no worries) that you have to fill out, asking for more details(e.g. landlord's phone number, purpose of stay, whether you are driving a car, who to contact in an emergency, etc.)
If you fail to do so, disciplinary measures range from verbal warnings to monetary fines. The longer you come late, the higher the probability to get fined. Being late even only 3 to 5 days can result in being interviewed for a whole afternoon, costing you (and a police officer) valuable time. After registration you will receive a temporary registration form. This form is important when interacting with various government agencies in China, and absolutely required to renew your residence permit.
In 2018, "serious violation" of immigration laws and the failure to register one's residence with the police during previous stays, was also added as a reason to reject applications for visa-free transit through China: http://www.mps.gov.cn/n2254996/n2254999/c5977739/content.html
Are most properties in Shanghai furnished?
Yes, most apartments are fully furnished. Renting in China is seen more as a temporary situation and Chinese will prefer to buy furniture together with their own home. This is great for most expats, as it makes the relocation process much easier. If you plan to bring or buy your own furniture, you must tell your agent, so that they shortlist unfurnished properties and landlords who can agree to store their furniture elsewhere.
Can I change the decoration or furniture of an apartment in Shanghai?
Decoration and provided furniture are property of the landlord and should be returned in good condition. If you can fully reinstate the original state of the rental you can make modifications, but tenants are strongly advised to first talk to the landlord. If this is essential for your choice of a property, you will better include this into the lease negotiations and final contract.
What's the parking situation like in Shanghai?
Like in most cities of the world, Downtown parking in Shanghai is bad and expensive. Some apartment compounds allow parking within the estate, or offer dedicated and to be reserved parking spots. Your agent will be able to provide more information. Villas in the suburbs often have garages or at least car ports for 1 or two cars.
What is a second landlord?
Second landlords are the house flippers of the rental market. They rent -often rundown- apartments and houses invest a sizable amount of money to lift the property up to modern standards, and the sub-rent to a tenant who knows to appreciate comfort and design. For tenants it is important to make sure the second landlord has proper written authorization from the original landlord to sublease, otherwise one will run into trouble when registering the address at the police station.
What are service apartments?
Service apartments aim to solve issues with too little time on hand to. They provide housekeeping and laundry service, sometimes include gym access and flat fees for utilities, making the whole process of settling down very easy. Unlike most normal landlords, they also accept short-term stays of few months or days even, rendering them middle ground between hotels and normal apartments.
What does FFC mean?
FFC stands for former French Concession, the French division of the international settlements established in Shanghai, which lasted from 1849 until 1943. The French government established its own administration in the districts Xuhui and Luwan (now Huangpu District). The area retains a distinct character and is a very popular neighborhood among expats, with beautiful old lane houses, tree-lined streets, and lovely parks sprinkled throughout. The Chinese government is not a fan of the term at all and doesn't permit its use for advertisement purposes. We discourage agents from publishing on UunlockShanghai to use the term. A subset of this area can be found under "Oldtown Xuhui".
What are Lane Houses? Are they good to live in?
Lane Houses are old terraced houses from the 1920s and 30s, arranged in small quarters, so-called Longtangs (弄堂), kind of Shanghai's answer to the Hutong （胡同)system in Beijing. Entries to the houses are often through large stone gates (Shikumen: 石库门) with small yards or gardens. Some of these houses have been modernized and are amazing residences with high ceilings, working fireplaces, black iron window frames, vaulted ceiling with timber beams, etc. Foreigners and wealthy Chinese are huge fans of restored lane houses. But they can come with surprises. As vast parts of Shanghai are former swamp areas, mold might creep up the walls, especially in the ground floor units. It is not unheard of that some people lost their entire wardrobe in Shanghai to mold. Plumbing can sometimes be a bit undersized, which leads to clogging. Insulation is often so-so, requiring wall or floor heating to keep you, the walls, and the water pipes inside warm during the winter.