Whether to buy or rent a property in Malaysia has been a debate that has gone on for ages. The decision to purchase or rent boils down to factors such as your financial position, the price-to-rent ratio, the duration of your intended stay, your needs, and preferences.
Buying a property, for some people, usually means securing a permanent home for their family or owning a property that generates rental income. Renting, on the other hand, is perfect for those with a lifestyle or job that requires them to be mobile.
Even though the idea of buying a property at a time like this seems daunting due to the economic downturn, as a result of Covid-19, but then, just like most Malaysians out there, you are probably tired of having a sizeable chunk of your salary go towards monthly rental payments.
Wouldn’t it be nice to own the roof over your head, which could give you good capital appreciation down the road?
Here’s why you should buy it, if you can, instead of rent.
1. Buying a property allows you to leverage
Assuming you buy a new property in Melaka or a new housing project in Melaka worth RM250,000, you only need a 10% downpayment while the rest is through a bank loan.
Whereas, in other types of investments, your returns would be based on how much you invest. For property, the price increase is based on property prices and not how much you invest. Moreover, with various home loan offers available nowadays (for example, BSN MyHome, Youth Housing Scheme), buyers can even own their dream with 100% financing.
2. Good return on investment (ROI)
As mentioned earlier, when you buy a property worth RM250,000, you only need to pay RM25,000 as a downpayment. Let’s assume that the price of property increases by 3% per year for the next five years.
That is RM250,000 x 3% x 5 consecutive years = RM289,819 at the end of the five years. This is RM39,819 divided by RM25,000 (downpayment) = 159%.
Divided into five years = 31% returns per year. Moreover, with the introduction of the Home Ownership Campaign (HOC) by the government, owning a dream home is even more achievable.
3. Property is a need
We all need a roof over our heads, which makes having an accommodation a crucial need. Therefore, buy one that doubles as an investment.
When it comes to owning a house, unlike a car, you can choose to take public transportation or even tag along with your colleague after work for a ride home. But, you cannot sleep under a bridge or live in a colleague’s home indefinitely.
4. Avoid unreasonable landlords
Not all landlords are inconsiderate and exploitative; some are great and easy going. But others are downright rude. Therefore, buying and owning your own home can help you avoid the stress of dealing with unreasonable landlords and exploitative rent rates.
There won’t be any need to worry about your landlord demanding for your rent or telling you to service the place.
5. Greater privacy, freedom, and control
When you own your home, nobody gets to tell you how to run your home, and you don’t have to deal with messy or OCD roommates. Be neat and tidy or dirty and messy as you like.
You have the freedom to buy what you want to put in your house. Also, you can take charge of your comfort. Yo don’t have to worry about something breaking and to have to wait for months to have it fixed by the landlord.
Owning your property in Malaysia, for example, in Melaka, allows you to be in creative control of your property. You can alter the property, including décor changes, landscaping, and renovations, to fit your needs and lifestyle.
Also, you have the option of buying to rent, which enables you to generate income from renting out the property. Lastly, the income can be put towards the home loan giving you a sound long-term investment. For more information feel free to get in touch with us.
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