Should we still be investing into properties?

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With rental prices gradually increasing, would this be the right time to buy property?

Post-pandemic, many organizations require their employees to return to the workplace at least a few days per week, even if working arrangements remain flexible. The demand for offices is still growing since businesses need a space to operate professionally, employees require a proper space to work as a team, and potential clients have more trust in your brand versus just meeting in a cafe.

All of us need a place to stay

When someone enters a university or moves to a bigger city to work, they will need a place to stay, and those who do not own the place they are living at will need to pay rent to the owner.

However, assuming they have been paying rent for 30 years, could they ask the owner to let them live on the property for free? The answer is definitely no because this is a property investment and rent must still be paid, as the owner may be paying a monthly installment to the bank. Despite the fact that the tenant has been renting the property for the previous 30 years, if the owner does not raise the rental for a few years, this is considered goodwill.

Yet, under certain circumstances, it is possible to stop paying rent. For example, if the tenant has lost their job and has no money to pay rent but has been paying rent on time all these years, it is possible that the owner will allow them to skip rental for a few months; after that, they need to continue to pay the monthly rental fee or move out.

On the other hand, what happens when someone has retired and their income flow has stopped? Would they be able to find a place to stay? Maybe they can stay with their children, who can buy their own property. After all, someone still has to buy the property. In other words, property investment is a must, regardless of the situation.

Is it better to rent or purchase your own home?

Whether to buy or rent is a personal decision based on your circumstances and preferences. You should consider your current financial situation, your needs and preferences, the price-to-rent ratio, and the length of your stay.

For example, an average apartment could cost RM2,500 per month in the Central Business District (CBD). So let’s take RM2500 x 12 months x 25 years. This would approximately cost RM750,000 at the end of the 25-year period. Therefore, you make the decision on whether it would be better to rent or purchase your own home at RM750,000 with a monthly mortgage of around RM3000.

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