Is renting better than buying a house Malaysia?

There are variety of personal and market factors that you can consider to rent or to buy a house. In order for you to make a clear decision, you can always do some analysis by breaking down the pros and cons for both the options.

Renting a house in Malaysia

Pros:

• • Flexibility: Renting allows you to move more easily, which is important if you’re uncertain about your long-term plans.

• • Lower upfront costs: Security deposits and rent are much lower compared to the down payment required for purchasing a home.

• • No maintenance responsibilities: The landlord usually covers repairs and maintenance, reducing your financial burden.

• • Rent may be cheaper than mortgage loan: In some areas, the cost of renting is lower than buying, especially in prime locations like Kuala Lumpur or Penang.

• • No property-related taxes: As a tenant, you’re not responsible for Quit Rent (Cukai Tanah), Parcel Rent (Cukai Petak) or Assessment Rates (Cukai Taksiran / Cukai Pintu).

Want to know which are the most commonly asked questions before renting a property? You may find out more here.

Cons:

• • No equity: Rent payments don’t build any ownership or wealth over time.

• • Rent fluctuations: Landlords can increase rent when leases are renewed.

• • Less stability: You’re subject to the landlord’s decisions, and leases are typically short-term (e.g., 1-2 years).

• • Lack of customization: You can’t make significant changes or upgrades to a rented property.

Buying a house in Malaysia

Pros:

• • Ownership and equity: Over time, paying a mortgage builds your own equity instead of paying rental to build others’ equity.

• • Property investment: Your home could appreciate in value in the future (property location is important).

• • Stable monthly payments: With a fixed-rate mortgage, your payments remain predictable compared to potentially rising rents.

• • Freedom to customize: You have full control to renovate or modify your home to your preferences.

Cons:

• • High upfront costs: Buying requires a down payment (usually around 10% of the purchase price) plus legal fees, stamp duties, and valuation costs.

• • Maintenance and fees: You’re responsible for repairs, maintenance, and service charges (especially in condominiums).

• • Risk of market fluctuations: Property values can decline, affecting your investment.

• • Long-term commitment: Buying ties you to a specific location for a longer period, which can be challenging if your job or personal situation changes.

Is now a good timing to buy a house in Malaysia?

Malaysia’s property market has been relatively stable, with slower price appreciation in recent years. Buying a home may be a good long-term investment if the market recovers, but the timing and location of your purchase are crucial.

If you’re planning to live in a high-demand urban area (e.g., Kuala Lumpur, Penang, Johor Bahru), buying a home can be quite expensive, and renting might be more cost-effective in the short term.

Also, do consider various programs offered by Government of Malaysia, such as the MyFirstHome Scheme, Rumah Selangorku & Residensi Wilayah (formally known as RUMAWIP) to help first-time homebuyers, which could make purchasing more attractive.

Key questions to ask yourself

• How long do you plan to stay in the area?

– If it’s more than 5-7 years, buying might be a better investment.

• Are you financially ready for homeownership?

– Do you have a stable income, a solid down payment, and the ability to handle maintenance costs?

• Is your job stable?

– If your job location might change, renting offers more flexibility.

• Is the property market favorable for buyers?

– Interest rates, property values, and market trends should guide your decision.

Conclusion

If you prioritize flexibility and low upfront costs, renting might be more suitable. However, if you’re financially ready for the long-term commitment and want to invest in property, buying could be a better choice.