Owning a property in Damansara and living there is, for many people, a make-it-or-broke-it lifetime type of decision. At the current market values for a property, renting one might be a cheaper and less stressing, alternative…..is this true?
This article will give you an unbiased compare & contrast analysis of the property buy/rent dilemma with the aim of listing “fact-based” considerations to help in the decision-making process. There is no right or wrong as both choices are providing a medium to long term shelter.
At the end, the decision of which button to push, if rent or buy a property, it will be only yours.
The Property Buy Vs Rent debate
Plenty are the arguments and debates going on the fact that, the money spent for rental, is money thrown down-in-a-drain without having any kind of beneficial outcome or return.
A major factor in anyone’s decision-making process is related to one’s personal finances. However, that might not be the only aspect to be looked at as many more lifestyle considerations will affect the final choice, such as: are you looking for higher flexibility or a long term stability, what are your career goals, family planning and, at the end, whether you absolutely want a place to truly call your own.
Buying a property in a mature area, such as Damansara, where land for new development is no more available is a guarantee of capital gain over the years. Rentals, on the other hand, always follow the up-going trend of property values driven by growing demand.
Compare and Contrast
Aside from your personal financial situation, which by definition is very personal and being very well known by yourself, there are some objective benefits and disadvantages of renting or buying a property which will be highly relevant to the final decision.
The above list is not exhaustive but covers at least 80% of the main points to be looked at when a decision needs to be made over renting or buying a property.
Best would be to give some values, in scale 1 to 5 weight each point above and look at the final result to have a clear and numerically comparable vision of where your choice shall be.
4 Quick Tips On What to Look At During The Property Rent/Buy Decision Making Process
#1 How long are you planning to stay in the same place?
Are you planning to live in the same place for long? Maybe because of children education, nowadays there are plenty of good location where your kids can attend schools from primary till higher education within less than 2 km of radius. Damansara offers a wide choice of educational institutions for all ages.
Or you have your own business and not planning to move it for long, or want to be living at walking distance from your parents’ home or, any other reason important for you.
These are all personal or family considerations to be looked at. The tip here is to look at a minimum timeframe, for a property buying decision, of at least 5 years’ time! If the replies to the questions above drive towards more than 5 years then buying is a much better solution.
#2 Do a precise estimate of the cost of Renting Vs. Buying
From my personal experience, and from a more precise calculation as per table below, in the short term or less than 4 to 5 years, it might be more convenient to rent than buying a property. The boundary comes in at the 5th year and it may allow an extra 1 / 2 years max.
From a pure cashflow point of view, buying a property will require higher costs such as renovation and furniture. However, if these expenditures are properly planned out of two or three years everything will happen in a painless manner and, at the end, you will own an asset. Personally, I look at buying and holding a property as the best decision by far.
#3 Weight the financial risks of your decision
Just few thinking points here to consider when deciding on the above dilemma. When buying a property, it really doesn’t matter how well you prepare yourselves, there are risks involved and, same goes for the renting decisions.
Even though, no doubt, you are building an equity when buying, risks you might be facing are:
- Although you did a thoughtful planning of your working career there might be an unexpected opportunity or, hopefully not, an economic downturn and you might need to move somewhere else. This might an issue in case your “initial cash-flow” was on the high side due to renovation costs. However if the above happens in the medium long term, you might be able to re-finance your property and get the extra cash needed to pass through the temporary downturn.
- Finally, the renovation cost. My strong recommendation is for new owner to start taking possession of their new dream home first, live in it for one or two years and only after being sure of all modifications needed, do it. For those having a property in a high-rise building or condominium, please remember that not all walls can be hacked. Contact the management with your planned modification to ensure no structural damage will be caused during your renovation works.
As a side note, when falling in one of hypothesis above, the location of the property will definitely make the difference. Market wise, properties in Damansara stay on the “for sale” listing much shorter time compared to other locations.
#4 Do a full and honest assessment of your financial situation
Whenever you start considering the possibility to purchase a house, or a property at large, the very first thing you shall do is to test your financial stress-point. Assess everything based on what you have today and not what you are expecting to have or achieve tomorrow.
Make sure all your dues will be payable once the new big commitment of a monthly repayment for your housing loan will kick in. The bread winner/s of a family work hard to ensure their loved ones can always have the best. Please make sure there will be a monthly left over to be saved for emergencies, tough times or maybe a good holiday once in a while.
Final Thoughts
My rule of thumbs has always been, if allowed by the personal finance stand point, to buy a property instead of renting it. Too many plus points in favour of the first option.
Let’s keep in mind that, as a tenant, you are paying the housing loan on behalf of the landlord with him, at the end, getting the equity and you nothing, is it worth it?
Finally, no matter what direction you will take, make sure your decision will be an informed and thought through one, based on your financial situation, current employment/income status and lifestyle.
When the time comes for you to make a decision on rent or buy, take a little bit of time to go through this article, check your financial stress point and, once cleared everything, proceed. A famous quote says, “In Real Estate Do Not Wait To Buy a Property But Buy It And Then Wait” or the longer you hold a property the higher will be your capital gain!
Follow Grand Global latest project, Grand Damansara on LinkedIn and visit our website for an update on the latest projects. You can also get in touch with our sales consultants to check on availability and pricing resting reassured we always plan, design and build all our projects with the users in mind.
One Response
Great article!
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