Accommodation is an essential factor for everyone. But sometimes, choosing between buying a home and renting might be difficult, primarily if you’re operating on limited resources. Let’s do a quick run-through of both options to see which way you should swing.
Renting vs Buying a House – The Cost Implications
Without a doubt, buying a house is more cost prohibitive than renting. At least, at first. But, from the 5th year onward, purchasing a home becomes cheaper than renting! So, if you think you won’t be moving from a particular area for a long time, buying a house is undoubtedly more financially profitable than renting long-term.
Factors To Consider Before Making a Final Decision
Before taking the plunge and buying a house or keep renting, for now, some important things you should consider are:
How Much Money You Have At Hand
Yes, you need to have a considerable amount of money at hand to purchase a house in Malaysia today. First, you’d have to cough up at least 10% of the total house cost as a down payment. You may have to pay even more than that if you cannot get your bank to finance up to 90% of the house price. The above aside, you’ll also need to prepare some funds to take care of stamp duties, account legal fees, and other charges, all while keeping something aside for emergencies.
Your Willingness to Commit to Long-Term
As you can imagine, paying for a house takes several years of monthly installments. Sometimes, this can be up to 30 years or even longer. While this might seem easy to pull off, the reality is that it demands an extraordinary amount of self-discipline and willpower. So, you must be sure you’re prepared for that, too.
How Long Do You Plan To Stay Where You Are
Do you see yourself staying where you want to buy a home for several years, or are you just there for the immediate future? It is a big question, as there’s genuinely no point in investing in buying a home if you’re planning to relocate after a few years. In such a scenario, you can lose a lot financially if you purchase a home.
Your Needs and Preferences
- Are you planning on building a family soon?
- Do you need easy access to public transport?
- What is your lifestyle needs now, and what do you think they’ll look like in the future?
Answering these questions might help you determine if you have to pay rent now or plan to purchase a house as soon as possible.
Bottom Line
Buying and renting both have good and bad things, and the fact remains that which way you go will almost always be determined by what you can afford and want. Because of this, make sure you take the time to think things through carefully.
