Buying vs Renting – which is the preference
Especially in the Asian culture, owning a property of your own has always been more of a cultural drive. In many families, this has been pre-conditioned from generation to generation – work, earn, save and make the purchase. Many associates the ownership of properties as a measure of success and a sign of wealth. This has naturally prompted many to priorities property ownership over many other things. However, the question remains – is this a feasible way moving forward given the changes in how we consume real estate and how the social-economic environment has changed post-pandemic? At which point does the benefit of property ownership outweigh renting one?Buying vs Renting – Let’s look at Renting
Given the current state of the prolonged MCO, FMCO, EMCO, and other variations to come forth, reduced disposable income and rising living costs, have deterred you from executing your buying plans. You are starting to consider the alternative to renting instead, let’s explore the upsides and downsides of renting.Greater control over your monthly expenses
Typically, the rental rate is defined in your tenancy agreement and is usually fixed for the duration of the tenancy. The landlord may increase the price when the tenancy ends and if you have decided to renew your contract. The fact remains, it’s a fixed expense that you can budget for. Of course, as you continue to rent over time, the amount that you have paid would have gone to the landlord for his repayment, expenses, etc. None of which is towards the ownership of your property. However, not all the rental paid is wasted per se. It has served the purpose of putting a roof over your head. The downside to renting is the unpredictability of the landlord. He may increase the price over time. He may have decided to sell the place, thus leaving you “homeless” given a short notice period. As a tenant, the risk of being asked to leave is inevitable, whether by choice or by force.Flexibility to Move Around
Whether you are being asked to move out or by your own choice, the flexibility is there for you. If you do not like your neighbours or unit mates, you can always pack and leave. That’s an option that you may not readily be able to take if you owned the place that you are staying in. As a disclaimer, we did not explore the implications of breaking your tenancy contract in this article. That is something we will touch base in a separate discussion. Renting gives you the perk to move wherever life takes you. Be it across town or the country.Access to Amenities
Typically, another perk of renting a place is that you can choose a location that fits your requirement from a convenience standpoint –e.g. close to public transportation hubs/stations, close to major highways, inside an integrated township where everything is just a stroll or a short drive / ride away. Renting inside a high-rise building also gives you access to community facilities that are reserved for residents only. Chances are the landlord is subsidizing part of the maintenance fee that allows tenants to enjoy those facilities.Depreciating Property Value
Since you are not the owner of the property, whether the value of the property is going up or down, is not a concern to you as a tenant. This is something that as a property owner, will need to keep an eye on. After all, if the property owner is using this property to generate rental income, it’s highly likely that this is an investment property, and not for their stay. Selling it off and making a profit from the capital gains is always a common exit plan for investors of such.Buying vs Renting – Let’s look at Buying
For many, owning something always make one feels good. It gives you a sense of belonging. Over time as we grow older, we will have to settle down eventually. Moving around as we see fit may no longer be feasible as age catches up with us. Having your own space gives you the freedom to do whatever you see fit with your house – from renovating to furnishing it to your preference. It is also a place where most of your precious memories will be made. Therefore, owning a place has a very special place in many people’s hearts. It’s very much an emotional push over the financial one. There are many costs and considerations when it comes to buying a property. If you are buying one for investment purposes, it’s a different ball game altogether. By letting it out while you wait out for the property to appreciate, can also provide you with a steady stream of passive income. Buying a property for investment purposes should always be done with the money that you can afford to set aside for the long-term purpose. Selling off a property when you need cash urgently is going to be tough. Even more so during times like this – with massive overhang inventory in the market and limited cash for investment due to various factors. Unlike cash or any other form of investment funds, the property as an asset is never as liquid.In a nutshell
If you are ready to take the plunge to buy your own house for your stay, do the necessary budgeting, check with the financial institution for loans, insurance, renovation to ensure that you can truly afford to keep servicing the finance in keeping the ownership. If you are currently renting from one of GFG Home Realty’s properties, you can check out our ‘Rent2Own’ scheme that allows you to convert your rental to down payment for the property that you wish to purchase. If you have decided to make your property purchase as an investment vs own stay, the same still applies. Even more so, given that you are likely requiring to rent a place for your stay, on top of servicing the financial requirement of this investment property. If taking care of the property for rental income is not something you have the time or desire to do on your own, do check out our 1-Stop Rental Property Management solution where we take care of every parts and puzzles of ensuring your property appreciates in value, in tip top condition and generating high return for you. Have a ZERO OBLIGATION FREE CONSULTATION with one of our Property Managers to understand more about our services. If you have decided to go towards renting, do check out our articles on Start your search today at Malaysia’s Largest Room Rental Listing Platform with over 100,000 rooms to choose from, with many offerings Zero Deposit at https://iBilik.my/ Thanks for reading this blog on ‘Should You Buy Now Or Rent First?‘ You might also be interested in:Blue Duck Tech Sdn Bhd (BlueDuck) is a licensed insurance agency in Malaysia transacting on Zero Deposit Insurance. Coverage is available only in Malaysia where insurance is currently being transacted and is subject to policy terms, conditions and exclusions. BlueDuck Zero Deposit Insurance is an exclusive product and is underwritten by Liberty Insurance Berhad. Coverage for the benefit of a landlord with respect to a tenant’s unit is subject to underwriting review and approval with respect to that tenant. Landlords are obligees under insurance placed by BlueDuck.
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