Is renting better than buying? Before we delve into property, let’s look at the world in general. Beyond just property, we already have clothes rental, car rental, venue rental and hey, these days, even partner rental during the festive seasons to stop the uncles and aunties from asking when will we have a partner… I could not accept the last one but if the latest generations could, well it’s then a valid ‘rental’ service. Anyway, let’s just focus on property for today yeah. Here are 4 serious reasons to rent a place to stay versus buying a property.
#1 – Really short-term basis.
If we are moving to a new place because of work and we think we may only stay for lesser than 12 months, it may make more time and money sense to rent versus buying a place. The reason is because just the viewing, comparing and even negotiating successfully would take us months, followed by the usual process of applying for a loan and going through land office will take many more months. This is just for the buying part. We have to repeat the process when we sell the place. In this case, rent lah. Makes much more time and money sense.
#2 – Save money every month for other productive purposes.
In the current market, when we buy a RM600,000 property, the mortgage payment per month should be closer to RM3,000. However, if we were to rent this same RM600,000 property today, then the rental may be just RM2,000 and that’s a lot of savings every month which we could get if we were to rent versus buying. The only note here would be how we utilise the savings yeah. These may be what we could start doing too. Earning, Saving, Investing and Preserving?
#3 – If we are expert with other investment alternatives.
There are people who are extremely good with alternative investments. Stock market for example where these people are able to buy and sell for profits almost instantly by studying charts. I just spoke to a friend who told me that his stock investments trump his property investments by a mile. There are also those who specialises in commodities; for example gold or silver. They always knew the best timing to buy and sell. This is why they should not tie up their money into property. Just let it multiply faster, perhaps.
#4 – Dislike for properties.
In case anyone thinks I am joking, this was the view of a managerial staff of an MNC in Penang many years ago. “Property is not needed at all. Money is needed. Just think very carefully, how many of us could bring our property along when we say goodbye?” His argument does makes sense yeah. Staying in a rented property and a purchased one gives the same comfort. Just remember that whatever we do, we are earning more than enough to hedge against inflation.
The below is one reason NOT to rent yeah.
Still unable to find that PERFECT property. Sorry yeah, for junior executives, that dream home you like will change when you reach the manager level and earning a higher salary. As for those who are already managers, there is no guarantee that you would not fall in love with a new DREAM home and you realised you could actually afford it. This is why there is no such thing as a perfect property. Find a property which meets most of your needs at this point in time plus a few years in the future, that’s all. Happy understanding and yes, I rented for the first 4 years of my working life too. Nothing wrong at all as I needed time to save for my downpayment.
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