Sunday,30 April,2017

Should You Buy or Rent? Weighing Your Options

Property

One of the most basic questions when you’re getting yourself a home is wondering whether you should buy the home, or rent it. Which is more cost effective? Which makes the most sense within your given situation?

Which of the two will save you more money in the short-term?

In the long term?

Typically, you have to decide whether to buy or rent before you go looking for a home. Homes are either on the market to be bought, on the market to be rented, or on the market for both. It depends entirely on the seller, landlord or firm owning the home.

There are a couple of things to consider before deciding what you need. Of course, renting seems more cost effective at first in the short term, but there are more to consider when your options are wider. For example, when your financial situation allows it and your credit rating is good enough, you can apply for a loan and look for houses for sale on sites like Property Guru.

property guru

Loans can let you buy houses and then gain ownership over them through monthly mortgage payments, which are set by a bank or loaning company, in addition to monthly interest.

To go more into depth:

A Mortgage Is Technically More Valuable than Rent

On first glance, rent is money you give to a homeowner in exchange for access over the home. You get to live in it, take care of it, and so on. But nothing really changes in your own personal value – you simply have a roof over your head now.

It’s different when you get a mortgage loan. Mortgages and interest paid monthly gives you a percentage of your home each time – meaning, as time passes and you pay off your loan plus interest, you gain ownership over your home until eventually it’s yours entirely. And over that period of time, you still have all the usual rights of home ownership – including the ability to raise your home’s value through improvements and such.

Renting Allows You to Be More Flexible

When you buy a home through a loan, you’re typically stuck to the payments. Even if you decide to move away to a different home, you still have to pay your monthly mortgage until the home is yours – you can’t just evacuate and stick the whole thing in someone else’s hands, at least not simply.

rent

When you sign a contract with a bank to pay regular mortgage, that contract is made official through the local notary. In some cases, you can go to a lawyer and announce that you’re drafting a contract to sell the home – the lawyer can then call the bank or loaning company, and based on the bank or company’s policies, you will be given clearance to sell the home as long as a cut of the sale goes to the bank, usually in the form of whatever mortgage payments left to be paid, together with the additional estimated interest.

All that combined makes moving from a home you don’t fully own extremely difficult – unless you’re paying rent, in which case you can either leave as soon as your contract or landlord permits, which is usually much sooner than with a bought home.

Not to mention the fact that you don’t have to find a buyer, first.

You Control the Value of Your Home Through Improvements

When you own your home, one big advantage is meant to be the ability to increase the home’s value as you see fit. You can buy your own house, and then, for relatively little cost, spruce it up and get a much larger return on investment in it – provided the housing market remains fairly stable.

You’re Actually More Likely to Save Money and Value When You Rent

One thing homeowners don’t realize is that, in general, when you’re renting out your home you may potentially be paying less (unless you get a great deal on your house sale), for several reasons. Yes, mortgage payments give you ownership over your home – but interest is simply paid to the bank as a way for them to make money out of the deal, meaning you’re effectively losing quite a lot as well.

That’s before homeowner taxes, the costs of upkeep and renovation, and any other costs that landlords would usually shoulder in rent contracts.

As Mashable points out, not all costs are baked into the initial price tag.

House

When You Buy It, It’s Your Home

Renting a home means it’s not your home – you’re simply renting the living space within it. Depending on the landlord, this greatly restricts your freedoms in terms of what you can do with the home. Some landlords won’t let you drive nails into the wall of a home or apartment to hang pictures, some landlords won’t let you change the walls to a particular color, some landlords won’t condone pets of any kind – and the list goes on.

But ultimately, the biggest factor is upfront cost – and home costs are rising in Malaysia, as Global Property Guide points out. This naturally means many simply cannot afford to buy a home. All that considered, which are you going for?

This Article Was Written By

ISMAIL N is the 'de facto' owner and editor-in chief of DuluLainSekarangLain.Com. A Human Resource practitioner in his normal daily life and consummate blogger in his free time. He is addicted to coffee and Manchester United. Most easily accessed via his Twitter account.

Ismail N

Leave a Comment

  • Hairul HIssam Reply

    BIasanya harga rumah dan sewa rumah pasti akan naik..
    so jika kita beli rumah skrg.. kita tetap perlu byr ansuran rumah yg sama. walaupun harga rumah dan sewa rumah naik berganda.

    August 4, 2016, 5:36 am
    • Zurainny Ismail Reply

      Tu la…harga rumah & sewa x akan turun, kecuali rmh tu byk rosak atau dah buruk. Skrg ni harga dah tlalu mahal, ramai yg x mampu beli. Apply loan pula susah utk lulus.

      August 4, 2016, 7:42 am
  • Olaoli Reply

    kalau saya, tinggal dirumah sewa dan sewakan pula rumah sendiri kepada orang lain. so dapat sedikit keuntungan setiap bulan.

    March 23, 2016, 6:17 am
    • Zurainny Ismail Reply

      Betul tu, asalkan nilai sewa bulanan lebih tinggi drpd ansuran bulanan…. 😀

      March 23, 2016, 12:45 pm
  • MDHAFiZ.NET Reply

    Depends on my situation. As for student like me i should rent it. But then again i will buy home when i am the money maker lol 😀

    March 22, 2016, 2:59 pm
    • Zurainny Ismail Reply

      Hehe…no worries, you’re still young, masi byk masa. 😀

      March 23, 2016, 12:48 pm
  • suri Reply

    kalau untuk masa depan beli kemudian nak sewakan orang pun boleh.tanah, rumah market tinggi takat ni nak dekat area bandar and pusat beli-belah

    March 3, 2016, 10:59 am
    • Ismail N Reply

      Good idea tu. Insya-allah boleh diusahakan.

      March 5, 2016, 8:38 am
  • Aishah Reply

    Saya nak nasihat dari puan,,saya bekerja sebagai agent @ majikan dikedai kasut,,kedai saya buka pukul 10am-9:30pm..
    Pada 12/12/2015 saya sepatutnya masuk kerja pukul 10 tetapi saya ada masalah sikit dan tiba2 saya dapat masej dari staff saya yang dia tidak sihat dalam pukul 11:30am,,Saya terus pergi kedai kerna risau padanya,,sampai kedai dalam pukul 12:15 terus masuk kedai menanyakan pada staff baru saya mana staff lagi sorang,,saya jumpa dia dengan bersaksikan staff baru saya dan saya cakap pada staff sakit tuh yang sy bagi dia balik pukul 12:30 untuk pergi klinik dan cuti rehat pada 13/12/2015,,tiba2 staff saya cakap baik saya benti keje je sebab tak heran dengan kerja ni dan terus amik beg,helmet,barang2nya dia pergi ke motornya di hadapan kedai dan hempas beg didalam bakul,,Disebabkan cara dia yang tiba2 itu saya pergi hadapan kedai dan berkata kalau itu akak da cakap saya terpaksa terima,lagi pon saya bagi akk balik rehat dan cuti rehat bukan bentikan akak kerja dan saya berkata tak apalah ini keputusan akk nanti hujung bulan saya beri gaji,,
    Dalam pukul 1:30 dia datang bersama tunangnya dan meninggikan suara berkata pada tunangnya yang saya halau dia macam anjing,sesuka berhentikan dia dan tuduh saya macam2,,Saya berkata benar dan cerita semua kepada tunangnya dengan bersaksikan staf baru saya tetapi staff itu tarik tangan tunangnya keluar dari kedai sambil berkata tunggu dan lihat,,
    Pada hujung bulan (30/12/2015) saya beri masej padanya yang saya ingin beri gaji semasa dia bekerja sampai dia berhenti,,pada malam tu dia datang dan saya bagi gaji kepadanya bersaksikan staff2. Saya kira semua gaji dia sebab tolak hutang dia ambil kasut,beg sekolah dan baju kerja,,resit semua saya copy dan beri gaji bersih padanya,,Dia amik gambar slip gaji dan resit terus keluar dari kedai,,

    Pada pertengahan bulan 1 anggaran 17/1/2016 dia telah masej area manager saya mengatakan gajinya tak cukup dan area manager saya minta semua salinan gaji dan hutangnya pada saya,,Setelah area manager kira semua gajinya cukup dan betul apa saya bagi,,Dan dia tak mampu berkata apa2,,
    Pada 27/01/2016 dia telah membuat aduan kepada pejabat buruh megatakan yang saya berhentikan dia tanpa notis dan saman saya kerna berhentikan dia tanpa sebab,,pejabat buruh bagi 1 tarikh perbicaraan dalam masa terdekat bagi menyelesaikan masalah ini dan saya tidak boleh bawa saksi pada hari tersebut,,

    Staff itu start kerja 19/11/2015 dan masih dalam percubaan,,

    February 16, 2016, 5:38 pm
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