Article Originally published at Expat Blog, Singapore property — Greyloft.

Singapore Property: Renting vs Buying – The Pros and Cons

Thinking of renting or buying property in Singapore? This is a major decision that everyone has to thoroughly process at some point in time. Before embarking on the journey, take into consideration some factors such as your lifestyle, financial situation, and employment. These elements will allow you to make a better decision and sway the answer to one side or the other!

So is it better to rent or buy a house in Singapore? The choice remains a personal one. Before making a hasty move, review the pros and cons and make the financial decision that is right for you! 

Pros Of Renting

  • Enjoy flexibility – this is attractive for young singles and families who may need to move from place to place due to work, or want to try out living in different neighbourhoods.
  • Fewer obligations – you don’t have to pay for major repairs, maintenance, property taxes or other major issues that come up during the tenancy.
  • You don’t have to come up with a huge downpayment.
  • It makes for great short-term options. Whether you are working on saving money or mentally preparing for the responsibility of owning a home, renting is the best interim option.
  • Property values go up and down, and while this may affect homeowners, it does not affect renters. Home value determines the amount of property taxes you pay, the amount of your mortgage and more. In a rocky housing market, renters are not as much affected.

Cons of Renting

  • You can’t make major structural changes to the property; you will be required to ask for permission.
  • You are basically paying someone else’s mortgage.
  • The greatest disadvantage for renters is there is zero return on your investment for rent payments.
  • Inability to build equity, because your home will not be your own property.

Pros Of Buying

  • Enjoy the sense of ownership – a fully-paid home is the ultimate provision for you and your loved ones.
  • If the home appreciates more than you’ve paid in mortgage, interest, taxes, and maintenance over time, you’ve earned a return.
  • Your costs are predictable and more stable than renting because they’re based on a fixed-rate mortgage.
  • You have the option of buying to rent, which enables you to generate income from renting out the property. This income can be put towards the home loan.
  • Living in your own home allows you to enjoy the freedom to renovate and decorate it as you wish.

Cons of Buying

  • You will have to come up with a higher downpayment.
  • Ownership costs are more than just a deposit; there are ongoing running costs of owning a property such as repairs, insurances and property taxes.
  • The interest and fees you pay for your loan can be significant. Be prepared for interest rates to fluctuate during the term of your loan, especially if you have a variable interest rate.
  • If you decide to rent your house, it is also your responsibility to find a tenant.
Renting or Buying