A roof above our heads is undeniably important. Owning a house is one of the reasons why many of us work so hard. However, the escalating prices of properties have reached a level where affordability has become a social issue, where owning a house seems impossible for many of us - especially if you are a fresh grad. So what about renting instead?
A recent statement issued by Bank Negara Malaysia (BNM) advised Malaysians to rent first if they really cannot afford a home.
This statement came after a recent study showed that it is 'severely unaffordable' to own a house in Kuala Lumpur and Penang, while it is 'seriously unaffordable' for the states of Selangor and Johor.
Before jumping into any conclusions, let's have a look at the pros and cons of both options:
Deciding to buy or rent purely based on emotions may lead you to financial difficulties. Who wouldn’t buy a home if they can afford to do so? Being able to own your own home is indeed a cheerful thing in life, but stretching yourself too far could land you in bankruptcy. Don’t forget that unexpected life events such as getting a baby and job loss could jeopardise your budget planning.
Be mindful that a house will only belong to you when it is fully paid off; otherwise, it belongs to the bank. Nevertheless, start planning now and with proper financial guidance, all of us are able to own a house.
This article was written by Alex Yeoh, a licensed financial planner who reckons that financial planning knowledge is one of the biggest investments every one of us should not neglect. You can reach him via email at firstname.lastname@example.org for further information.