In Malaysia, Should You Rent or Buy a House?

Considering that home costs have been steadily rising, Malaysians certainly ask themselves frequently, "Should I rent or buy a house?" Some people may start to view home ownership as a high goal and begin to prefer renting to buying.

If you're torn between buying a home and continuing to pay rent each month, the following list of considerations might help you make up your mind.

Renting a house

The most pervasive misconception about renting is that you waste money every month. That is untrue. You must remember that having a place to reside always involves some sort of financial outlay. Even while paying rent on a regular basis doesn't help you develop equity, not all of the expenses associated with homeownership are related to doing so.

Renting gives you complete control over your monthly housing expenses. Your lease specifies this sum so you can make appropriate plans. In rare situations, if you reside in a condominium, your landlord might also include homeowner association dues, storage fees, and utility charges in that sum.

Every time your lease is up for renewal, as a tenant, you can experience rent hikes. If you live in particular areas of town, these rent increases may be even more pronounced. This might not be the case if you reside in a region where rent control and rent limits restrict how much, if at all, a landlord can raise the rent.

If you rent, you can leave when your lease expires. But it also means that you could be forced to relocate quickly if your landlord decides to sell the land or convert your apartment building into condos. Alternatively, they could simply raise the rent beyond your means.

Owning a house

Both concrete and intangible advantages come with home ownership. You gain a sense of stability and pride in ownership, in addition to having your own home and having control over its appearance and design.

However, keep in mind that since real estate is a fixed asset, changing your mind about where you live can be very expensive. It could be difficult for you to sell when you want. Even if you manage to, you might not be able to buy it for the price you desire, particularly if the property market is weak. There are significant transaction costs involved with selling your house, even if it's up for sale.

Even if your mortgage payment is less than the rent, owning a property generally has greater overall costs than renting. Here are some costs that, as a homeowner, you will incur that you would not typically incur as a renter:

Buying a house with an under RM3k salary

Set a clear target

The key to motivating your actions while purchasing a property is having a clear goal in mind. You might try putting your list of objectives and strategies for accomplishing this aim in writing.

 

Regardless of whether you want to acquire property for personal use or to rent out, you must always base your choices on your own financial capacity.

 

For instance, if your salary is less than RM3000, you should thoroughly verify with a bank how much you will need to set aside each month for the duration of the mortgage loan term and determine whether you can manage it.

 

Again, you will likely be bound by this financial obligation for decades, so it is crucial to be sure you can afford the monthly payments to the banks. After deciding on a goal, move on to the next action.

 

Organize your spending

You will need to control your spending in order to stick to the objective you have set for yourself.

 

The largest portions of your monthly income are likely spent on entertainment, housing, and food. It might be challenging to reduce food prices, especially if there are many mouths to feed. However, attempt to do so by cooking more frequently at home and dining out less. If you can stick to it consistently, try setting a daily food budget goal and rewarding yourself with a special meal at the end of the month.

As was previously stated, you deserve a reward for your efforts, and you actually deserve to occasionally have fun. But keep in mind to prevent the bad habit of blowing through your income as soon as you get it, which leaves you with insufficient funds for necessities at the end of the month.

Another common piece of advice is to always keep an eye out for unique discounts, rebates, or cashbacks. These can occasionally be very useful in helping you save money.

Conclusion

Everyone has a different opinion on whether to owning a property or renting a house. Your specific circumstances, including your goals, lifestyle and financial situation, will shape your decision. Considering your income, savings and lifestyle, you have to compare the pros and cons of each.