Do Rentals Make Better Sense?
Yes, and no, says Alfred. “The issue of renting versus buying isn’t much of a problem in Singapore, unlike in the United Kingdom or Europe. If you’re a Singaporean living and working here, being able to use your CPF to service your home loan makes home ownership more feasible.”
Having said that, he agrees that rentals have some appeal in times of rising property prices and subsequent cooling measures. “I know people who’ve sold their property and rented it back from the buyer to enjoy cost savings. Some lease out their existing property while renting a place nearer to their office or kids’ schools.”
Desmond adds that renting should only be a temporary measure. “As property prices increase, so too will rental prices in the mid- to long-term.”
Here are some benefits and drawbacks of renting.
1 It’s less expensive than buying a home, in the short-term. 2 Flexibility – you have the freedom to move if you don’t like the environment. 3 You’ll have fewer financial obligations and you can save for your dream home.
1 Dependence on your landlord – you’ll have to negotiate if he decides to increase the rent or move out if he wants to sell the place. And you can’t modify the property as you please.
2 You can’t use CPF to pay rent.
3 The rent will go up as property prices increase.