Should You Buy or Rent
Your Home in Singapore?
It is an age-old question. Should you rent or should you buy? There
are advantages to both and whether these advantages appeal to you or not will
largely depend on your lifestyle and financial prudency. So, before you bite
the bullet and pay for a hdb or bto in Singapore,
read on so you can make an informed decision.
In this guide, we provide a comparison of the advantage of buying as
well as renting.
The pros of renting
1. Lighter financial load
Just because everyone is saying you should ballot for an HDB flat,
doesn’t mean that you necessarily should. Purchasing property is a huge financial
commitment that needs to be well planned. If you don’t see owning property as
your own personal goal, then you may be better off just renting. Many make the
decision to buy but end up paying for it all their working lives.
Renting will involve less financial hardship and commitment in the
short-term. You don’t have to dig around for enough money for a down payment
and you’re not tied down to a mortgage for the next 30 years of your life.
When worse comes to worst, you always have your family to fall back
on and you can move back home. If you don’t, you can simply downgrade to a
smaller home, or even a shareflat.
2. Flexibility to move
Renting gives you the flexibility to move whenever and wherever you want,
subjected to your tenancy lease of course. Most Singaporeans live in
accommodation that either they or their families own. So, you often hear of
complaints from some guy or girl that lives in Jurong West but needs to commute
to the financial district for work. Renters need not face this problem. If
you’ve got a new job in a new area, you always have the option of packing up
and moving to lessen your commute.
3. Fewer maintenance obligations
If you are renting your home, your only obligation is to pay the
rent on time. While you are responsible for the general cleanliness of your
home (like cleaning up the vomit your friend left on the living room floor
after a night of drinking), most things related to the home are not your
responsibility. You are usually just responsible for keeping the place in good
condition, of course, depending on your rental contract. However, for larger
issues such as maintenance and repair, these are the responsibility of the
landlord and out of your hands.
The pros of buying
1. Rents are expensive
Although buying a house may require a hefty down payment, rents
aren’t the savvy savings idea it used to be. You might be paying as little as
$500 for a room in a shared HDB flat in Yishun, but this cost will rise if you
rent a whole property. For example, a one-bedroom or studio apartment can set
you back $20 to $2500 in decent areas like Jurong East. On the other hand, if
you take out a 20-year $300000 mortgage to buy a 4-room HDB flat, you will be
paying a fixed amount of $1400 each month, which would be equal to what you’d
be paying in rent for a 1-bedroom HDB unit.
2. Generating income
Buying a home can sometimes help to generate income. You can turn
your property into a rental and if everything is in your favor, you might just
make steady returns on your investment. Also, if you can accord to purchase a
home with more bedrooms than what you need, you have the option to rent them
out if you are willing to.
Although with the Minimum
Occupation Period, you may be limited in what you can do to make money off
of your property if it is a HDB, there are still ways to get a bang for your
buck. You can sublet rooms in your house as long as you continue to live in the
flat. If you’re young and single, it might even be chance to network and expand
your friends list.
3. Government grants
Qualifying for a HDB grant alone is enough of an argument to buy a
flat. It doesn’t matter if you really need it or not. The government is
essentially giving you free money. So why not take advantage of that to get
yourself a financial windfall.
4. Investment potential
Property is a tangible asset. It will appreciate in value in the
long-term. Further down the road, you might be thinking of selling the property
for a profit, or quickly flipping it in a lipstick flip. As Singapore doesn’t
have any capital gains tax, any profit you make from the property yours to keep
– of course, after deducting legal fees, property tax paid over the years,
interest on your mortgage as well as any renovation and maintenance costs, that
is.
5. Tax deductables
Your mortgage and property taxes are tax
deductible. That means you get more of your money by buying instead of
renting, as renting does not come with any tax breaks at all.
6. Inheritance
Any property you own can be inherited by your descendants. As there
is no inheritance tax in Singapore, so this means when you die, your flat or
apartment can be passed on to your spouse or your children, without them being
taxed for it. You can buy a home for your family members if you want to provide
for them after your death. However, bear in mind that most HDB flats and
residential properties are on a 99-year lease. This means that they will not be
passed down your family forever.
7. Customizable
The good thing about owning your own home is that you can do
anything you want to it. Want your home to resemble a nightclub? Go ahead. Want
to plaster your walls with BigBang wallpaper? Be our guest. There is nothing
you cannot do to your own home.
8 comments
Masing-masing ada pro and cons dia. At the of the day kena kaji semua especially bab financial stability kan.
ReplyDeleteItulah, keduanya ada pro and cons.. Bagus je mana-mana pun, kena check kewangan kita jelah sesuai yang mana
DeleteBeli rumah pada peringkat awal mmg rasa perit tp tu jd hakmilik sendiri..tp tepuk poket tanya selera..hihi
ReplyDeleteAda pahit juga kan, tapi at last jadi manis dah :D
Deletethanks for sharing this. Memang sebelum beli rumah kena survey dan kaji dulu. tak boleh hentam beli je. Bimbang menyesal kelak
ReplyDeleteWelcomee Najah :D
DeleteBetul sangat tu
Good sharing Husniey, Kak Sue pun dalam proses nak beli rumah juga nie. Doakan tau agar dimudahkan urusan.. 😉
ReplyDeleteSemoga dipermudahkan urusan pembelian kak sue 😊
DeleteKomen yang membina sangat dihargai. Terima kasih bagi yang meninggalkan komen dan membaca penulisan blog ini.