Personal Finance 101: Property Investment is no longer necessary

Personal Finance 101: Property Investment is no longer necessary

Every investment can be a great investment

Someone shared that investing into the stock market is easy. He showed many success stories. Someone shared that his crypto-currency is starting to show positive signs again. Someone shared that when it comes to the current situation, it’s best to rent because we could save more money versus buying a property. Renting may be RM2,000 but paying repayment for the same property could be 50 percent higher, or at least 20 or 30 percent higher. Everyone has their say because they may have achieved something positive and thus they are sharing what they know. I just like to ask three easy to answer questions.

#1 – Can we rent without someone actually owning a property?

Okay, the answer to this is, ‘of course we could rent a place without someone actually owning a property.’ In some countries, the government would take over some old buildings, refurbish it and then rent out the units or the rooms to the people who needs them. The government may even choose to build homes and then rent out those units to the needy. So, it’s true. We could rent without some individual owning the property. However, some organisation has to own the property and the property has to be there and ready. Else, no one could rent it to us, even if we want to rent a property. Briefly, a property is needed and someone or some organisation or the government of the day needs to own the property in order to rent to us.

#2 – Can we stop paying rent?

Again, the answer is Yes! I never needed to pay rent all those years I stayed at my parent’s house. It was free when I stayed for 10 years in their Teluk Intan home. It’s free when I stayed in their house in Ipoh and it’s still free today everytime I needed to stay overnight when I go back too Ipoh. Yes, it’s free, free and free! Well, when my sister stayed with me as a student, it was FREE too. However when my sister started working, she insisted on paying some rental to cover the electricity etc. When my brother-in-law stayed with me when he started working, he paid rental too. Both of them stopped paying rental when they moved out and started paying for a property of their own. Briefly, it’s really possible to stop paying rental. It’s when we started paying for our own property, then we stop paying rental.

#3 – Should a landlord stop collecting rental?

Okay, for this question, I hope some landlords reading this would comment below and tell me that if their tenants have been paying them for the past 30 years, they would stop taking rental from their tenants once their tenant has paid them for 30 years or once their tenant stop having an income.

For me and for my brother-in-law and for friends whom I know, they would continue to take rental from their tenants. No matter for how long. Regardless of whether their tenant has a job or no longer working. They needed the rental because it’s a rental… Definition for rental?

Cambridge Dictionary (click here to read) says this about renting: a fixed amount of money that you pay regularly for the use of a room, house, car, television, etc. that someone else owns.

Briefly, if you do not own that unit / home / place, then paying rental is compulsory if you intend to use it. A landlord would not need to stop collecting rental.

#4 – There are many people who does not own a property at all and they are doing just fine, right?

Yes, you are right. Many super wealthy people does not even remember where are all the properties they own. There are also the ones who has so much savings that it’s enough to pay for rental forever and ever. I am not joking. I really do have many friends who does NOT need to own a property and they could afford to rent until the day they say goodbye. They could even go for holidays as and when they like. Why buy a property for stay when one is not even staying in in often enough and is always travelling and staying in hotels etc?

Briefly, if we need to pay RM2,500 for rental per month and we have the below amount, then forget about buying a property yeah. Continue renting and enjoying lah.

RM2,500 x 12 (months) x 25 (years) = RM750,000. Actually, this is a very small amount for many of my friends. It’s a huge amount for me but it’s a small amount for many of my friends. This is why for them, buying a property is really not necessary at all. As for me, if I am the owner of this RM2,500 rental per month unit, I like to say that I need that RM750,000 over 25 years yeah. With RM2,500 per month or RM30,000 per year, it meant that every year, I have money to go travelling too. 😛

Answer these 4 questions and then go ahead and decide whatever you like to do. It’s your life.

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