Making your mortgage lower than your rental? Possible lah. (not for all though)

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We love to think that we are right. Who does not, right? Haha. Someone mentioned to me again that we should buy a property when the market starts to recover. The time is not now. Now is the best time to rent because the rental is below the mortgage. Why must we suffer every month just to own a property while we could let the owner suffer instead? If the owner dares to increase the rental today, we can easily find another owner who is willing to take a lower rental than mortgages.

Everyone knows this but still so many people are trying to sell us properties? Perhaps two questions. Who knows exactly when the market starts recovering? I would have to say, I do not know. Perhaps my friend knows. Second question, will rental stays the same forever? Perhaps it looks like it will stay the same forever? In all advanced property markets, rental continues to increase over time. Slowly but surely. Until many of the B40 households suffer from poverty because rental continues even after their income stops. (retire)

Perhaps I offer this advice instead. This piece of advice is reserved only for those who have enough down payment, ok? If not, very hard to do and I do not hope everyone without down payment owning a home. That’s too risky for all of us.

Assuming we are now renting a room for RM600 maybe. (inclusive of electricity and water bills). If we bought a RM400,000 property instead, the mortgage is probably RM1,800. 30 year loan, 10% downpayment. Two choices below from different property listing sites.

Notice that the units I chose are renovated or furnished? Actually, buying a renovated unit saves us a lot of costs. Here’s an earlier article: Advantages of buying a renovated unit Both these units have 3 rooms. In other words, it’s possible to rent out two of the rooms. In fact, no harm in renting out the master-bedroom if we intend to maximise the rental yeah. Else, two of the smaller rooms may just give us a total rental of RM1,200. (RM600 / room on average). What’s the mortgage now? RM1,800 – RM1,200 = RM600. We are paying the same to start owning a home instead of just renting forever. Earlier article here: Paying rental is usually forever

I know, there are also questions such as what if I could not get tenants? What if the tenants move out and I am unable to get tenants back? What if the tenant ‘destroys’ my home sweet home? I think if we love to think this way, the best way is still to continue renting. Just remember to move home every time the owner decides to increase our rental. Just remember to ensure we do not ‘destroy’ the room we are renting too. Be a good tenant yeah. As for the rest who are now thinking of how to making our mortgage payment lower than rental, feel free to leave a message and I will write about it too. Happy deciding.

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<Featured Image is courtesy of Stock Photos from goodluz>

Next suggested article: Banks, please stop lending if necessary!

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