Should you buy or rent a property in Malaysia?

On one hand, owning a property offers the potential for long-term financial gain and stability, while on the other hand, renting offers flexibility and freedom from the responsibilities of property ownership. As stocks drop and inflation climbs, you might ask yourself, "Which is more sustainable, buying or renting a property?" If you are highly considering purchasing a property, do put some thought into additional payments on top of your mortgage, which include legal fees, valuation fees, and real estate agent fees. Alternately, if you are currently renting, it can be frustrating to see a chunk of your salary go towards your monthly rental payments. Listed below are some pros and cons of buying a property versus renting to help you with your final decision.

Pros and cons of buying and renting a property

1. No maintenance or repair bills if you decide to rent

A significant advantage of renting is that you do not have to stress about costly maintenance or repairs. As a tenant, the responsibility to maintain the property and deal with the necessary fixes resides with the landlord. Meaning you could save a lot of money on unexpected repairs or costly maintenance as a tenant. However, one downside is that you will not have control over how the repairs are carried out, which could be a troubling factor. Sometimes the landlord may take longer than you'd like to complete the repairs.

2. Build your wealth over time if you choose to purchase a property

By owning a property, you have the potential to build wealth over time due to real estate appreciation and capitalising on your equity. So what does real estate appreciation mean? Real estate appreciation refers to the increase in the value of a property over time, which can be attributed to various factors such as improvements made to the surrounding residential area or increasing demand for housing in the area. As a result, owning a property could potentially provide significant financial gain if its value appreciates, allowing you to sell it for more than what you initially paid for.

3. Limited freedom for tenants

Diving into what was mentioned in point 1, the biggest limitation to renting is the lack of flexibility with your living space. Making changes around the house based on your personal taste needs to be double-checked with your landlord beforehand. Your use of living space may also be subjected to limitations, such as the prohibition of certain modifications like upgrading from a fan to an air conditioning unit. Although this can be an issue for some, a solution to this would be relocating, which easily addresses the situation.

4. Less predictable monthly expenses

Although renting offers some stability with monthly rents, you should keep in mind that the expenses are not fixed. Landlords have the authority to increase rent, especially if it's a hotspot in the rental market. On the other hand, by purchasing a property, you can expect a more predictable monthly expense like mortgage payments. However, there is also the risk of a market downturn, which may cause a decrease in market value. By subscribing to a reliable insurance plan like Great Eastern's Wealth Accumulation, you can have peace of mind knowing that you have taken steps towards securing your financial future. With a focus on long-term wealth accumulation, this plan can provide you with the necessary support to navigate through market uncertainties and build your financial stability.

There are pros and cons to renting or purchasing a property, with factors such as individual requirements and financial circumstances influencing the advantages and disadvantages one may face. Whether you decide to buy or rent a property depends on your personal circumstances and goals. If you prioritise stability and long-term financial gain, owning a property may be the better option for you. On the other hand, if you prefer the flexibility of a fixed monthly budget and don't want the responsibilities and potential costs associated with homeownership, renting may be a more suitable choice. Ultimately, it is important to carefully weigh the pros and cons of both options and consider your financial situation before deciding.