Just like food and clothing, shelter is one of the important essentials that should never be overlooked. The problem is, unlike the first two, acquiring property is a serious deal; homes are never cheap and often involve long-term financial planning.
Generally, everyone has a choice of either buying or renting a house or apartment of their own, and depending on their financial standing and circumstances of the current economy, both of these options have their own pros and cons.
The question is: which is better, especially for 2017?
Will 2017 be a good year for taking up a housing loan? Would property prices Stagnate, Drop or Soar over the next few months? These are questions that should be considered should you ever think of acquiring property.
Our verdict: While owning a home is a dream to most of us, it’s more practical to rent than buy in 2017. As a renter, you do not have to bear all the following, which in turn gives you more financial power and freedom to invest or save.
Fluctuation of Property Prices
Theories tell us that as population grows, demand for housing increases, and therefore the prices of properties are always on the rise. Well, this might not be true in all scenarios. The fact is, property value tend to go up and down over the time, and while homeowners are largely affected by the fluctuation, renters get to stay away from it and still enjoy the occupancy of their desired home.
Huge Down Payment? Not necessary
A huge sum of down payment (typically 10% of the property) is required when making a purchase on a property. But that’s not all. In Malaysia, stamp duty, lawyer fees, property agent commissions, property taxes are also payable by property buyers. This no doubt, will add up to a huge sum of down payment required in order to acquire a home.
Maintenance & Repair Costs
For condominium/apartment/gated community house owners, paying monthly maintenance charges are compulsory. Even if you’re an owner of a non-gated landed property, other charges such as yearly assessment, quit rent, sewerage bills, and fire insurance are also applicable. Moreover, all properties undergo wear and tear as time passes, and require repairs from time to time. As a house owner, you’re responsible for all these maintenance costs and repair bills.
In A Nutshell
Greater flexibility = greater freedom + more peace of mind
A renter definitely enjoys greater financial flexibility compared to a homeowner who is locked down by a mortgage and other monthly related costs as mentioned above. For one, renters who struggle to make ends meet always have the option to downgrade or downsize their home. For homeowners, it’s not always easy to sell their properties, especially in difficult times.
So, rent or buy in 2017? We think renting lets you have the upper hand in 2017!