Property Investment 101: Rent all you want lah, this is the average across Asia.

Property Investment 101: Rent all you want lah, this is the average across Asia

How much should we pay for rental? Is it 30 percent of our monthly pay?

If we earn RM3,000 per month today and we are trying to rent a room, how much do you think the rental would be? RM300? Sorry… That was during my time and what was a very long time ago. These days, RM800 is more reasonable and realistic. However, do we want to just rent a room or it’s better to rent the whole place to ourselves instead? If we rent a room, we would be staying with some strangers. Let’s now look at what happens throughout Asia based on a study of renting a home / unit.

Article in cnbc.com The general rule of thumb is to spend no more than approximately 30% of your pre-tax income on rent, according to financial experts.

Based on data gathered in April from various government websites and large real estate marketplaces in each country, researchers at the Global Property Guide compiled a list of median rental prices across several major cities in Asia.

The numbers listed below are based on the median buying price per square meter and the median monthly rental price for a 1-bedroom apartment in the most expensive region within each respective city:

Hanoi, Vietnam

Median rent for a 1-bedroom: $688

Buying price per square meter: $2,280

Jakarta, Indonesia

Median rent for a 1-bedroom: $698

Buying price per square meter: $1,726

Kuala Lumpur, Malaysia

Median rent for a 1-bedroom: $735

Buying price per square meter: $3,903

Manila, Philippines

Median rent for a 1-bedroom: $805

Buying price per square meter: $3,813

Taipei, Taiwan

Median rent for a 1-bedroom: $816

Buying price per square meter: $17,551

Bangkok, Thailand

Median rent for a 1-bedroom: $1,080

Buying price per square meter: $6,485

Tokyo, Japan

Median rent for a 1-bedroom: $1,216

Buying price per square meter: $8,837

Hong Kong

Median rent for a 1-bedroom: $2,173

Buying price per square meter: $25,802

Singapore

Median rent for a 1-bedroom: $4,590

Buying price per square meter: $16,619

It is a long article. Do read the rest at Article in cnbc.com

Yes, always remember that rental cannot stop unless you own the unit

Looking at the above. If we stay in Hong Kong and we are renting for the next 30 years, the following is what we will be paying yeah. S$2,173 x 12 (months) x 30 (years) = S$782,280 (+/-RM2.7 million)

For the lowest priced which is Vietnam. After 30 years of renting, this is how it looks like. S$688 x 12 (months) x 30 (years) = S$247,680 (+/-RM863,650).

I have no intention to stay in the same unit for 30 years

Ok, this is true also. If we rent, we could rent here for a few years, rent there for a few years, move somewhere else for a few years etc. In fact, one could keep on enjoying new places if they rent versus being stuck to just one place for 30 years. I have to agree that if it’s the choices which we want, then this may just be the only choice.

I also need to inform everyone that as the home owner, I will also not be renting out my place for the same price for 30 years too. So, as we move, it is more likely that we will be paying a higher rental versus paying ever lower rental every time we move, unless of course we are moving from a posh place to a less posh place to an even lesser posh place and maybe in the end, we moved to just a room.

Happy deciding.

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