To many, you can say that buying your own property can be the biggest milestones and accomplishments. Investing a huge sum of money into a property requires a lot of commitment and determination. Adding the Covid-19 pandemic into the factor, you may have to think twice about whether you should buy or rent a property. Considering that the current economy is not looking good.
Besides putting money into the factor, you also have to consider the location of the property. That is because the price of the location varies depending on the location. For example, like Pandan Perdana and Subang Jaya.
Without further adieu, here is what you need to consider whether you should buy or rent a property.
Having a home comes with a few hidden costs. Besides the 10 percent down payment, there are many other costs that come with buying a home. These costs include legal fees, stamp duty charges, and processing fees. Because even if you can pay for these upfront costs, make sure you still have a lot of money in the bank when you move into your new home.
Then there is the monthly loan payment, as well. No matter what happens, will you be able to pay it each month on time?
As long as you have a good credit score, most banks will loan you up to 30% of your gross annual income. This means that your monthly mortgage should not exceed 28% of your gross monthly income. This way, you’ll still have money to deal with any problems that happen.
Ratio of price-to-rent
As a child, you might have heard that renting only makes money for the landlord, and that society expects you to have your own home when you’re old enough.
To figure out if it’s better to buy or rent a house, you can look at the price-to-rent ratio. Price-to-rent ratio is a way to figure out how many years it will take for your rental fees to cover the cost of a home. This ratio can be found by dividing the annual rental amount by the average cost of a home that is for sale.
If you plan to stay in the same place for more than the number of years it takes for your rent to cover the cost of the house, then buying the house might be the better deal.
Duration of stay
Are you looking for a place to stay for a short time? Or are you looking for a place to stay for at least the next two decades? Another thing to think about when you decide whether to buy or rent a home is how long you plan to stay there.
You might not want to spend all of your money on a home you plan to only use for short periods of time.
However, if you want to build a home that will be your home for the rest of your life with your parents or kids in tow, then plan your finances so that you don’t buy a house that is too expensive for you.
Another thing to think about when you’re deciding whether to buy or rent is what your lifestyle needs and wants are.
Most of the time, the location of a home affects how much it costs to rent or buy, so think about that when you’re looking. For example, do you want to live closer to your job or your child’s school, or do you want to drive or take public transportation to get there?
Also, think about whether you want to own the roof over your head and the land under your feet. Buying a home gives you full control over how it looks and what you can do with it. Do you like to try new things when it comes to decorating or remodeling?
On the other hand, if you rent a home, you might have a lot more restrictions on what you can and can’t do because your tenancy agreement says so.
Can you bear the cost?
People who have decided whether to rent or buy should keep in mind that as a homeowner, they also have to pay for things other than the mortgage.
If you rent, the landlord will take care of most of the repairs to the house.
Should you buy or rent?
So what do you think? Which one do you think best suits you?