Moving around, so better not buy?

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Someone asked if buying a property is a must. Seriously, it is NOT. If one has barely enough for monthly expenses, why ‘waste’ it on mortgage payments? If we are moving from a smaller town to KL for work and intends to stay just 2-3 years, should we buy a property? In a Facebook posting, someone said that if one is only going to be based at a new place for a few years, it’s best not to buy a property. Renting is a better option. This is so that if one is moving to another place for another job, then he does not need to worry about selling his property which will take a very long time and very troublesome. I disagree. If we are talking about short-term as in 12-18 months, perhaps the argument may carry some weight.

Property investment is not about buying because you need a place to stay and selling it when we relocate. When we relocate, we could choose to sell or we could choose to rent it out. Both of these could be done easily with good Real Estate Negotiators (REN). What will happen is that we could rent it out fully furnished too since it was already furnished by us when we stayed there for the past 12 months. By the way, renting out fully furnished meant a higher premium too compared to a totally empty unit. The target market is totally different yeah. One needs comfort. (air-con, water heater and even refrigerator) Another could just sleep with a thin mattress on the floor. Guess which will be more willing to pay a premium.

By the way, it is not usual for rental to cover mortgage these days. The reason is because rental could only increase ONCE on a yearly basis usually while property transactions could happen anytime and property price may be rising with every transaction. That’s why after a couple transactions which are extra RM50,000 the valuation of similar properties will also inch upwards. Banks are also willing to lend at the new price. This is why mortgage payments usually goes up faster than rental. As for high rental returns, guess what happened to the price? Yeah, you guessed it right, it did not change much or may even be reducing due to pressure from many sellers in the market at the same time. is the market best for rental today? Yes. Will it be best for rental forever? Well, it really depends but I will answer as NO. Happy following. (Decision is yours by the way, rent if you prefers to)

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written on 13 Feb 2019

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