I’m Going To Be Renting Forever And I’m Fine With It

Every time someone tells me that renting forever is a terrible financial decision, I tell them to take a hike. Sure, they are not exactly wrong when they say that renting is you paying your landlord’s mortgage but the idea of renting a home forever is still an appealing one. 

Here are a few reasons why I’m perfectly fine with renting forever.

Escalating housing prices

Houses in Malaysia are getting more and more expensive. This is especially true with how ridiculous the property market and the economy as a whole has gotten in Malaysia. Despite modest demand during the COVID-19 pandemic, property prices have remained consistently high, with little to no sign of dropping.

According to the Housing and Local Government Ministry, data by the National Property Information Centre (Napic) showed there were a total of 35,592 completed and unsold properties worth a total of RM22.45 bil in the first quarter of 2022. Less demand and more supply, the perfect environment for prices to fall, and yet they remain high. Why?

One of the big reasons why is the rising costs of construction materials. According to Datuk NK Tong, president of The Real Estate and Housing Developers’ Association Malaysia (REHDA), the rising prices of raw materials increases the developers’ bills, which then get passed on to the buyers, leading to higher property prices. With Bank Negara Malaysia (BNM) maintaining the overnight policy rate (OPR) at 3.00%, borrowing money to buy property also remains an expensive endeavour.

If that wasn’t bad enough, the development of infrastructure throughout the Klang Valley has also caused property prices to appreciate in the area.

Little to no maintenance costs

One of the major benefits of renting out a home is there are comparatively few, or even no maintenance and repair bills. Unless you actually break something, your landlord assumes full responsibility for all maintenance, improvement, and repairs. 

All you need to do is make a call to your landlord if something needs fixing.

Homeowners, on the other hand, are responsible for all home repair, maintenance, and renovation costs. Depending on the nature of the repairs, prices can vary wildly.

Free reign on amenities

Some homes come with fantastic amenities that would otherwise be absurdly expensive if you aren’t renting. Amenities such as in-ground swimming pools or fitness centres usually come as standard at most mid-range apartments and condominiums with no additional charge to tenants.

If a homeowner wanted to have access to these amenities, they would likely have to spend thousands of ringgit for installation and maintenance. Of course, if you buy an apartment, most tend to come with an extensive number of amenities that are free for any resident to use. However, apartment owners are also not exempted from these costs as they tend to be rolled into their monthly maintenance fees.

No property taxes

It goes without saying that when you rent a home, you are not saddled with all the extra property taxes that the government/local municipalities levy on home owners. Renters will be free from the burden of paying quit rent (cukai tanah), parcel rent (cukai petak), or assessment rates (cukai taksiran), which, depending on the property, can amount to thousands of ringgit per year.

More location flexibility

Compared to home buyers, renters have a lot more choice and flexibility when it comes to choosing where to live. Those who are seeking to buy a house must choose a location where they can afford, which may not be where they want to live. 

Renters have a wider range of options when it comes to choosing where to rent. Sure, it will be much more expensive to rent a home in the big city centres compared to the suburbs, but the monthly cost of doing so is still going to be much cheaper compared to buying property in popular locations.

The ability to downsize

Renters have the ability to downsize at the end of their lease in order to seek out cheaper accommodations. This kind of flexibility is a massive boon, especially for those concerned about their retirement plans. It is much easier for a renter to move to a less costly, smaller alternative that matches their budget.

If you own a house, getting rid of it is actually much harder than you might think. Whether you are buying a home or selling it, there are a number of extra fees involved. Some of these extra fees can include agent fees, legal fees, renovation and repair fees, and if you sell your home, you will be subject to real property gains tax (RPGT). These can get ludicrously high depending on the value of the home. Also, if a homeowner has invested a significant amount of money in renovations, the selling price might not cover these costs, leaving them unable to afford to sell for a decent profit.

Lower rental and utility costs

Typically, the amount you pay for rent is fixed, as per the lease agreement. While landlords can increase the price, they must give renters appropriate notice, allowing you to plan and budget accordingly. 

This is opposed to home owners who are subject to adjustable rate mortgages (ARM) which can fluctuate and result in rising mortgage payments due to higher interest charges.

Additionally, homes are typically larger than rental apartments. As a result, they are more costly in terms of utilities such as electricity and water. Rental properties typically have a more compact and efficient floor plan, making them more affordable than many houses. However, there are landed properties that are up for rent that can get quite large. As such, the utilities cost for such properties will scale up accordingly. 

In conclusion

While this is not an exhaustive list of reasons why renting might be the superior option, it covers most of the major pain points that people might have to face when choosing to buy a home. Sure, owning a home can be beneficial for homeowners over the long run due to the amount of equity they can acquire from a house, and renters have nothing to show after years of rental payments. However, if you are looking to avoid the hassles associated with homeownership, the costs of upkeep, and property taxes, and long-term costs, renting is the more appealing option.