In this article, we’re going to explore the benefits and drawbacks of renting and purchasing a property and along the way, allow you to determine which option will suit you best.
Why renting is way better?
Time-efficient
Renting is the most logical choice when you wish a place to move in immediately. The house has already been there for your choosing. True, you could have to spend some time looking at several houses before you decide one that suits your fancy, however it is considerably quicker than needing to search, buy and renovate the house before you can move in. With a rented property, all you’ve got to do when you decide is to sign a tenancy agreement with your Landlord and you will move in when you are ready. In contrast to the long procedure for buying a property, rental transactions could be done within a few days. Furthermore, renting gives you an opportunity of choosing a length of stay that you are most comfortable with. It is possible to decide to rent on a month to month basis or choose a longer period for instance a year. With a payment of a small premium, you can also choose a fully-furnished premises, where you can just pack your bags and move in!
Flexible
If you have not made the decision exactly where to settle down, renting gives you great versatility since you may re-locate whenever you please. This is particularly so for those who may need to re-locate on short notice. As an example, you have a job offer in another location and need to be closer to work. In cases like this, all you’ve got to do is tell your Landlord to end your tenancy agreement. There could be a small fee as a penalty for early termination of the tenancy agreement but other than that, there won’t considerably stopping you from moving. This may not be the case when you owned the house as you’ll need to undergo the hassle of putting it on the market, seeking out for a suitable buyer and negotiating the price before you move house with your mind at peace.
Responsibility of Repairs Falls on Others
You will not need to worry when a water pipe bursts or the bulb goes off on you because you aren’t in charge of it. Your Landlord is, in fact it is depends on him or her to seek a contractor to repair the issues. Keeping in mind that restoration expenses could be very high, it’s a relief to know that the Landlord is also the one who will pay for the fixes. Your only obligation is usually to pick up the cell phone and tell your Landlord of any kind of issues with the property. The restoration works usually are completed within 14 to 21 days of notification.
Less Upfront Expense Compared to Buying
The Landlord generally requires some upfront payments which are in accordance with the tenancy agreement. This common exercise usually entails the following:
Security Deposit 2-3 month’s rent (refundable upon end of tenancy)
Advance Rental 1 month’s rent
Utility Deposit 1/2 – 1 month’s rent
Assuming that the rent is RM 2 500 each month, you’ll have to pay between RM 10 000 to RM 12 500 to your Landlord upon execution of the tenancy agreement. Other costs such as the water and electricity bills, Astro and the internet are payments you need to foot by yourself, based on your usage. Sometimes, the property’s maintenance fees are included in the rent, in accordance with the contents of the tenancy agreement. However, you’re free to bargain with the Landlord on what payments to add or leave out from the rent.
Alternatively, as a tenant, you are on the losing end if the Landlord makes a decision to increase the rent or choose to not renew your tenancy upon the expiration of the tenancy agreement. You will have to either put up with paying more or find a new place to move to in a hurry. Either way, you’ve got no say in the matter as you have no ownership of the property, which also would mean that you will enjoy neither capital appreciation nor the opportunity to transform your premises to investment property to generate more cash flows in the future.
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