Is it best to rent or buy property in Malaysia today?
The decision between renting a property or buying property is often one of finances. But even for those who are lucky enough to have a choice, what are the pros and cons of buying a property or renting in today’s market?
In this article, we’re lucky to be joined by Malaysian property expert, and Founder and Managing Partner of law firm Chur Associates, Chris Tan.
In his own words, here are some key points to consider when looking at renting or buying property.
Renting Is Not A Dirty Word
In Malaysia, we are a nation that works on home ownership. That means we encourage people to own a home rather than renting a home.
Depending on what you do, renting a property is not a bad thing. With today’s mobility and advanced technology, you might be working in KL today, but next year in Dubai, and the year after in Hong Kong.
Mobility is higher in today’s context. The fact is we tend to be more fluid in where we want to settle down. Therefore, renting is captivating in that sense – why do you need to be tied to property?
Buying Isn’t Just About Price
Buying is not just about the property price alone. You have to look at it in a very wholesome approach. What about terms of payment or terms of occupation? Things like that are also important.
For example, you might not have a 10% deposit, so you may want to negotiate if you can pay your downpayment in a few stretches.
Alternatively, you might not be able to get a bank loan in the normal margin of financing at 90%. You may only qualify for 60%, so you have to think about how to pay off the balance of the 40%.
Consider Flexible Solutions
When I look at the buyer’s market today, everyone is desperate to sell.
What if they say they won’t lower the price, but you still like the property? How about asking to rent it for a year before buying the home at the desired price?
Besides that, you can also ask for part of the rent to be taken as part of the payment of the purchase price. It’s important to know how to negotiate: as long as you know what you want, you can get an even better deal than just price alone.
First-Time Buyers Need To Account For All The Costs
The biggest issue for first-time property buyers is number one – the cash flow. Many buyers say they have a 10% deposit and a loan for 90% value, so they can buy a house.
Oftentimes, first-time buyers get overexcited about purchasing a home and focus on other costs. But there are other issues to take into consideration. For example, buying a condominium means you’ll need to spend extra on maintenance, service charges, sinking funds, and more.
These payments are a long-term commitment until you sell the property. Hence, on top of the monthly instalment, you will need to pay for these and the maintenance of your unit. To be safe, work out cost implications wisely before you consider making a purchase.
Get Ready To Negotiate
At the end of the day, every development is different. You might not get a price drop in a mature area because of high demands, but you may be able to negotiate in other areas.
To start, do some research on a project that has just been delivered by a developer. Look at how the developer sold it at that time (in the past). When a developer sells, you should know that the developer is selling at a specific price.
As such, if you know the original price and the current price, that’s where you can find a reduction. There might also be a rebate or discount, which represents a space for you to negotiate the property price.
Renting Can Be Negotiated Too
There’s always room for negotiation in any market. If you are a tenant, you have many choices. If you’re a landlord, be aware of your competition. With that said, be smart when it comes to rental negotiations.
People will often hold out for a desirable renter, but renting property is a cash flow game. It’s not about asking for the best price, and the one month you don’t rent will harm you. So if a tenant has a lot of choices, a landlord will have a lot of competition too.
The Law Protects Tenants
If you ask me if a tenant is well-protected in Malaysia, the answer is yes.
As long as a tenant pays their rent, they have every right. Whether you’re deciding between buying or renting a property, different circumstances should be considered. As it is right now, legally, protection is currently in favour of the tenant, not the landlord.
A Good Market For Buyers And Tenants
The current property market conditions are good for both buyers and tenants. Ultimately, it depends on what your usage is.
If you can afford to buy, then buy, as you can achieve some returns in the long term. But if you cherish flexibility where you can end your commitment very fast, then renting is the ideal option for you.
Make An Informed Choice With Mudah.my
With numerous listed properties for sale and rent today, and fresh properties added daily, Mudah.my is on track to becoming Malaysia’s leading property platform. As part of that journey, we’re committed to helping support informed decisions for our audience.
“As Malaysia’s leading integrated one-stop resource for homebuyers, sellers and renters, Mudah Property is uniquely positioned to offer Malaysians insights that will help them decide where to live and where to invest when it comes to property,” said Mr. Gaurav Bhasin, CEO of Mudah.my Sdn. Bhd.
So what does that mean for you? Whether you’re looking to buy a property or searching for a great property to rent, Mudah.my is the place to discover your ideal home today.
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