Apartment Renting Vs. Buying: Which is the Better Option?

Sewa atau beli sebuah apartment? Mana satu pilihan yang lebih baik? Saya mahu kongsikan sebuah artikel yang cukup menarik untuk anda fikirkan. Artikel ini telah ditulis oleh Cara Olsen, seorang freelance Digital Marketer. Ia berkaitan dengan pemilikan hartanah di Malaysia, khususnya pemilikan apartment di Setia Alam, Selangor. Mari lihat pro dan kontra berkaitan tajuk ini.

Apartment Renting Vs. Buying: Which is the Better Option?

Rising apartment rents in Malaysia have led some individuals to dive into homeownership earlier than they had planned. Others have preferred to adopt a wait and see position, in spite of the government incentives to buy. But there is no right or wrong answer when it comes to determining whether buying an apartment is better than renting one.

Several factors come into play that ultimately affect the decision on which is better. Buying and renting an apartment Setia Alam on Property Guru both present a unique set of advantages and disadvantages, but your financial situation may be the biggest factor of all.

Renting

Renting does offer you flexibility and freedom, despite the fact that you cannot build equity. Some of the advantages of renting are:

• It is easier to move if an opportunity arises than having to sell your apartment
• You are not affected by the depreciation of an asset – the apartment
• You do not require regular maintenance services. If a faucet broke in the kitchen, call the building superintendent and he or she will call in a plumber

Renting presents the following disadvantages:

• The payments you make monthly (rent) can increase as soon as your current lease ends
• When you rent, you hold no equity, the payments you make monthly provide you with a place to live, but does not provide you with a tangible asset you can sell when you move
• You cannot paint or remodel your apartment without the owner’s consent. Some landlords may allow their tenants to paint, but you would have to discuss on the color and get permission to go ahead

Buying an Apartment

The emotional and financial advantages can be enticing, but homeownership is not something for everyone. Some of the advantages of owning your own are:

• You are able to build equity
• If you are living in an apartment purchased through a mortgage, your house payments remain stable
• You can use your apartment as an investment by choosing to sell it or rent it out. Renting it out works out great especially if you have a mortgage and the rental payments can cover that. Therefore, it makes economic sense to purchase a home with the potential to bring in a good rental income.
• You belong to a community once you make the commitment to own an apartment. Chances are high that you will become more involved with your community since you know you will be there for years. You also get to know, meet and socialize with your neighbors, join the local homeowner’s association or even volunteer for local school or community projects.
• Homeownership gives you the joy of being able to change your environment to suite your needs and lifestyle. However, if you live within a homeowner’s association jurisdiction, you might have less freedom on certain things like owning pets in the building.

Disadvantages of homeownership are:

• You are responsible for your own maintenance, which might require you to spend copious amounts of money and time to keep your apartment in good repair. You will find it helpful to set aside some funds for surprise expenses like broken appliances, window replacement and service contract.
• Your apartment is not a liquid asset that you can sell for job relocation or when circumstances change. You might not be able to sell your apartment quickly.
• You have to pay property taxes
• Your apartment could lose value
• Purchasing an apartment requires a significant amount of cash investment
• If you have a mortgage, the bank will require you to insure your residence 

What is the Best Option?

To find out whether you should rent or purchase an apartment, consider the following questions:

• How long do you anticipate living there? Buying an apartment requires a significant amount of emotional investment. House flipping days are basically over, apart for the professionals. If buying an apartment, be prepared to stay in it for five or more years to recoup the cost of purchase, to survive the market and build equity.
• What are the costs that go into buying? Your local market will play a significant role in the decision on whether to rent or buy. Check online for estimate rental and purchase costs around your area, and talk with a real estate agent to learn about the apartments and neighborhoods you can purchase.
• What are your future plans? While no one can accurately predict where he or she will be in five years, you should carefully consider your career and personal life goals. If hoping to get ahead in your career, then renting may be the best option for you, unless you are interested in having an investment property.
• Can you finance an apartment purchase? The first step in buying an apartment is evaluating your financial situation and meeting with a lender to see if you qualify for a house loan and how much you can borrow.

Buying an apartment in Setia Alam on Property Guru is a major decision that should be carefully considered. Unless you can accommodate your housing payments and emotionally prepared for homeownership, purchasing an apartment can be a great financial step.


Photo Credit: Setia Alam Website