Buying vs. Renting in Malaysia. What's Really Worth it?

All Individuals differ in financial capacity and personal needs, which ultimately shape their goals and guide them in making an informed decision, especially so for big investment decisions such as purchasing a home.

For many young Malaysians, deciding between committing to buy a home and renting is a common and critical question at a certain point in their lives.

The first step in making a sound decision is understanding your own financial aspects and calculating the cost of ownership.

Once the financial aspect is clearer, it’s time to reflect on one’s lifestyle preferences and dynamics. Ask yourself these questions to have a clearer picture overall on whether to commit to buy or to go for rental?

Are you single, married, or raising a family with school-going children?

Do you need to factor in school commutes?

Are you someone who prefers being rooted in one location or state, or do you enjoy a nomadic and flexible lifestyle?

How does your job location affect the commuting distance between your home and workplace?

Are you a big believer in freedom of styling and renovating your own space?

These essential questions help gauge your financial readiness and determine whether buying or renting better suits your needs. Pair them with an overview of costs to gain a clearer indication of whether buying or renting aligns with your needs.

Overview of Costs: Buying vs. Renting

Buying a Property:-

Down Payment: Typically 10% of the property price, which can amount to RM30,000–RM50,000 or more for an entry-level home.
Legal Fees and Stamp Duty: These additional costs can range from 2% to 5% of the property price.
Mortgage: Monthly repayments depend on the loan amount, interest rate, and tenure. For example, a RM400,000 loan over 30 years at 4% interest equals approximately RM1,900 per month.
Maintenance Fees (if Strata Property): Monthly contributions for upkeep of shared facilities in apartments or condominiums. Landed would be on security fees if its a gated and guarded community.

Renting a Property:

Monthly Rental: Varies widely depending on location and property type, ranging from RM1,000 for suburban apartments to RM3,000+ or more in prime city areas.
Deposit: Typically two months' rent plus a utility deposit, payable upfront. (Utilities (Water & Electricity) are the responsibility of the tenant on a monthly basis.
Tenancy Agreement: Payment of Stamp Duty for contract documents, ranging in the hundreds.
Maintenance: Usually borne by the landlord, though tenants may handle minor repairs.

Remember, There are No right or Wrong decisions

The decision to buy or rest on one’s financial situation, lifestyle priorities, and goals. Each decision has their advantages and disadvantages. Buying offers long term value, stability but is bounded by the other cost of home ownership aside from mortgage, such as Quit Rent, Assessment Taxes, Security fees, etc.

Renting offers the flexibility, mobility in living arrangements, and with your rental kept to your requirement one can focus on other investments or savings for other asset classes.

Weight your priorities carefully and seek advice from financial professionals or professional agents to make a sound decision that fits your needs and current situation.

Need expert advice? Reach out to PropNex—we are always here for you and ready to chat about your property needs!