{"id":8409,"date":"2024-03-08T17:15:07","date_gmt":"2024-03-08T09:15:07","guid":{"rendered":"http:\/\/www.imoney.my\/articles\/?p=8409"},"modified":"2024-03-08T17:50:17","modified_gmt":"2024-03-08T09:50:17","slug":"rent-or-buy","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/rent-or-buy","title":{"rendered":"Is It Cheaper To Rent Or Buy?"},"content":{"rendered":"

Wait a minute, you may think \u2013 if you can afford it, isn\u2019t buying the better choice? Isn\u2019t renting just throwing money away? When you pay your mortgage, you\u2019re putting money into an asset. When you rent, you\u2019re just giving money to your landlord.<\/p>\n

But buying a property involves a six-digit financial commitment that will affect your finances in a big way and maybe even change the way you live going forward.<\/p>\n

If you catch yourself think whether it is better to buy or rent a home to live in, here\u2019s what you need to know before making a decision.<\/p>\n

<\/span>Which make better financial sense?<\/strong><\/span><\/h2>\n

Wait a minute, you may think \u2013 if you can afford it, isn\u2019t buying the better choice? Isn\u2019t renting just throwing money away? When you pay your mortgage, you\u2019re putting money into an asset. When you rent, you\u2019re just giving money to your landlord.<\/p>\n

But it\u2019s not as simple as that. You also need to consider the opportunity cost of renting or buying. Think about all the money spent on buying a home \u2013 down payment, legal fees, mortgage payments, maintenance fees, etc. \u2013 if you could invest this money in high-yield investments instead, renting could actually be more cost-effective in the long term.<\/p>\n

On the other hand, if you rent a home, you lose the opportunity of enjoying equity gains if the value of your home increases.<\/p>\n

Whether or not renting or buying is more cost effective in the long run depends on a multitude of factors such as: how long you plan to stay in the home, how much it appreciates each year, and how much you could have made by investing the downpayment.<\/p>\n

If that sounds like too much math, don\u2019t worry. Buy or rent calculators, such as those on EdgeProp<\/a> or The New York Times<\/a>, can compute these factors for you.<\/p>\n

<\/span>Plugging in the numbers<\/strong><\/span><\/h2>\n

To illustrate, let\u2019s compare the financial costs of renting versus buying a RM500,000 property. Here are a few assumptions we\u2019ll make:<\/p>\n

Renting scenario<\/strong><\/p>\n