Renting or Buying A House?
Having a home essential to us as it provides us
shelter, warmth and security. It is also a personal space where we spend most
of our time. Are you already at that age where you should be buying a house?
However, buying a house in Malaysia is unaffordable especially to young working
adults. If you are not planning to buy a house yet, you could always check ou
the apartment
for rent in KL. If you are torn between buying a property
or renting a property, fret not, this article will guide you through the pros
and cons of buying and renting a house in Malaysia.
A.
Buying a house
Pros
a.
Greater privacy
As this is your own house, you definitely have the
whole place to yourself. You do not need to worry about sharing and losing your
privacy. In addition, you are able to get things done the way you like it
without having people telling you off. You do not need to deal with your
housemates that are messy or Obsessive Compulsive Disorder housemates. After
all, this is your house and it belongs to you.
- Freedom
You are allowed to buy anything you want and have them
in the house. There is also no need to fight for bathroom or kitchen when you
need them. You are also in charge of your comfort as you are able
to deal with problems immediately instead of waiting for the landlord to fix it
for you, which may take a long time before it is fixed.
- Good investment
If you do your research before buying a house, you
will know that having a right house is an incredible asset. Not only it helps you to save money, it
also increases in the value. If you are planning to live in it, you will not
need to worry about paying for rental every month. It also provides a home for
your family and you. However, if you plan to sell it off in the future, you
will be making a profit if the price and timing are right.
- Avoid unreasonable landlords
This is one of the most tedious issues that most
tenants face - unreasonable landlords. Having a house on your own will save you
from the problems caused by the unreasonable landlords. While some landlords
can be really friendly and responsible, some landlords could be inconsiderate,
unreasonable, exploitative and rude.Therefore, having a home on your own could
help you to avoid all these problems of dealing with unreasonable landlords.
Cons
a.
Upfront money + hidden charges
You will need to fork out money on your own to pay for
down payment and other miscellaneous fees, which could sum up to a huge amount.
Most down payment would require a 10% of the property price, subjective to the
approved loan amount from the bank.
- Financial risk
There is also a risk of your house value depreciating
instead. Other than that, you are also responsible for all the maintenance
fees. All these could be a financial burden for you if you do not plan your
budget ahead.
- Long term commitment
Do bear in mind that buying a house is a long term
commitment. A property is only a good investment after a period of time. That
being said, you will have to stay in the house for some time, at least 5 years
to avoid paying for the Real Property Gain Tax.
- Renting a house
Pros
a.
No maintenance costs
The landlord is responsible for all the maintenance costs.
For example, clogged drain, water leakage or faulty electrical appliances is
under the landlord’s responsibility. You do not need to bear any cost unless
the damage is caused by you.
- Low upfront costs
Your upfront costs will be so much lower as compared
to buying a property on your own, as you do not need to pay for down payment
and monthly installment for the house.
- Low commitment
Renting a house also requires lower commitment as
compared to buying a house. As you are only renting a house, all you need to do
is find a house, contact the landlord, sign the tenancy agreement and you are
done. If you do not like the house, you could always leave after the tenancy
ends.
Cons
a.
No return
Bear in mind that renting a house does not come with
any return because the property does not belong to you. The rental that you pay
monthly belongs to the landlord and you do not gain any benefit from renting
the house.
- No tax benefits
You will not be able to enjoy any tax benefits as well
as compared to those who buy a house on their own..
- No law to govern tenancies
As of today, there is no legal policy that helps in
protecting the tenants in Malaysia. This is due to the market inflation that
caused the high maintenance fees, therefore resulting in sudden increase in
rent. In addition, if your rental property is located at a prime location, your
rental might increase as well. Unlike buying a house where your mortgage is
fixed.
Moreover, some landlords take ages to get problems
fixed although the damages could cause danger to the tenants. Therefore, it is
important to have a tenancy agreement.
In conclusion, both buying a home and renting a home
come with their own sets of pros and cons. At the end of the day, it all boils
down to personal preference and how much you can afford. If you are capable of
buying a house, by all means go ahead. If not, you could always choose to rent
a house first before you buy a home on your own if you are tight on your
budget.
