YES Renting is Better than Buying NOW! Here’s why
Hey you! Stop looking at the Poke Ball, there is a Big Pokemon to catch and that is the Big Bargain coming your way. If you haven’t being living under the spell of Pokemon Go and actually noticed whats going on around you, you might have come across the countless of listing of properties for sale on Mudah, Iproperty, Facebook etc. You might have discovered there are even more properties that are for rent and the same listing keep coming up over and over again.
Why do they keep coming up over and over again? Because nobody is buying them or renting them. But doesn’t there is no demand. It simply means there is a mismatched of demand and supply (I hate this term, as property gurus used it all the time, and used it as “go to answer” to explain why the properties prices is high, but I can’t explain it better any other way.) Does that mean property prices will go down? Unfortunately NO; As sadly there are many Rich Taikor and Tai Tai in KK and in Sabah in general, still plenty of people with cash, so even their unit is not selling, they wont lower it too much as they have the resources to hold on.
Tenants are spoilt for choice nowadays, lets see what we got here if you are a tenant with a budget of between 1500 to 2000 plus, looking for typical 2 or 3 bedroom apartment. I check on Mudah reveal
- Lido 4 season. 20 Listing (RM1300 to RM2200)
- Alam Damai 48 Listing! (RM1800 to RM2500)
In total there is 350 listing of apartment for rent in KK alone for the price of RM1500 to RM2500, the numbers get scarier with ALL types of properties including terrace house, semi ds etc. With 35 listing on mudah on 1 page there was 18 pages of it! 35 x 18 = 630 listing!!
How many do you think can afford this rental for those who stay in KK? To afford this kind of rental one would need to earn at min RM5000 per month to make it reasonable (about 1/3 of salary) to stay in these places. How many people in KK do you know earn that kind of money? What about expat? Well, these people are few and far in between, mostly in Oil and Gas sector, which has cut thousand of jobs in the past few years because of tumbling oil price. Foreigners ? Where? You mean those at the Philippino market? haha.
With this many supplies and so few qualified people who can rent these, you bet the rental is going to drop. In fact, the prime location like the Loft IMAGO rental for a typical 911sf 2 bedroom apartment has gone from RM3800 down to RM2500 in the matter of only 12 months, most fully furnished by the way. Good time to rent?You Bet!
In fact, the prime location like the Loft rental for a typical 911sf 2 bedroom apartment has gone from RM3800 down to RM2500 in the matter of only 12 months, most fully furnished by the way. Good time to rent?You Bet!
Now lets look at the prices of these properties that are asking for that rental range (1500 to 2500) and their monthly repayments for a typical 30years loan at 4.3% interest
- Lido 4 season. RM450k to RM500k ( RM2000 to RM2230)
Loan RM2000
Rental RM1500
Extra RM500 - Alam Damai. RM650k (RM2900)
Loan RM2900
Rental RM2000
Extra RM900
For terrace house its worse,
- Typical terrace in popular areas. RM650k
Loan RM2900
Rental RM1300
Extra RM1600!!
If you are buying a terrace house today with minimum downpayment today, the extra you could save by Renting is actually enough for you to buy a Lido 4 season condo with a top of RM400!
Of course, if you have the money or you die die must OWN your own house then by all means go ahead and Buy whatever you like, I am just sharing the ways to buy an investment property by thinking a little bit and common sense before buying your own house.
propertykid. Always Learning Always investing
