Personal Finance 101: Renting can save money, right? Simple answer is Yes, but…
What will happen to renting in the future? We just need to look at more advanced property markets to understand a little more.
Today, we just focus on renting a room or renting a bed space inside a room. We will look at these two options as the more affordable options for a working adult intending to ensure he / she does not spend too much on rental and is able to save a good amount every month while working in Singapore. By the way, no point in paying too high for rental yeah. The one getting richer is just that owner you pay to every end / beginning of the month.
Renting a small room in Singapore today
Three examples: (I only chose the ones around S$1,000. If we are speaking of one whole room, there are more units above S$1,000 per month. However if there are cheaper choices, we take those instead lah. Else later they say why you paint a gloomy picture of renting a room in Singapore? All the rental examples (photo) in this article are from https://rentinsingapore.com.sg/rooms-for-rent/ Take a look yourself yeah.
Well, I think if someone is earning S$5,000 a month, surely they can easily afford the room rental lah. Just don’t rent those S$1,800 ones lah. Concentrate on the S$1,000 ones instead. The rental is just 20-30% of their monthly salary. They can still afford to save another 50% of their monthly salary so that they could buy a real property in JB in the future.
Renting a bed space within a room
What happens if the person is not earning S$5,000 but is earning S$3,500 instead? Well, just need to skip renting a room and move into renting a bed space within a room instead. Prices will now become more affordable and one could still save very close to the savings amount as someone earning S$5,000 but chose to rent a room instead of renting a bed space.
Sharing a room with others would require some adjustments yeah. For example, my wife recorded the sound of my snoring just a few days ago. She said, this is your noise yeah. My reply? “It’s not at all close to the sound of fire crackers.” Haha. So, if you snore, your room-mates will have to bear with it and vice-versa yeah.
If everyone wants to sleep and you still need to do your report, you may have to do it in the living room instead. In the morning, some would have to wake up earlier to use the bathroom because it is not possible for all to want to use the bathroom at the same time yeah. If someone did their ‘business’ just before your turn, well…
It’s Singapore, they have small space, so it’s like that lah
Too many people kept saying to me that the reason why property prices and rental kept increasing in Singapore is because they are a small island. Space is thus limited. Prices is thus pushed up lah. Always remember that if we take Singapore as a more advanced property market and we say this is 15 years ahead of ours, then all these things I shared will happen within the next 15 years yeah.
It’s a simple fact and this is also how people do their predictions too. It cannot be a prediction by plucking something from thin air yeah. It has to be a reference to some event, some people and perhaps the renting scene of a more advanced property market when it comes to predicting the potential happening in a less advanced property market.
Here are some examples today as well here in our beloved Kuala Lumpur
Examples are from this site: https://www.ibilik.my/rooms/kuala_lumpur
Okay, enough examples. I am very sure KL’s room rental is still going to be cheaper than in Singapore for many more years to come. It could be rising but since there are many condo units, the rental increase should be slowed down. That’s a huge sign of relief I guess. These rooms in Kuala Lumpur are all near to the city centre yeah. These are not from the outskirts where travelling to the city centre will take 45 minutes yeah.
What should I do then?
Maybe, pay the lowest rental possible and save all those money for investments? Could be any investments. Just do not pay the lowest rental possible and spend all the extra savings lah. After a few years, you may realise that you may not even afford the rental as this is increasing over the years while we never build up our wealth…
Maybe… buy a condo of 3 rooms and rent out the two rooms instead? Only issue is the downpayment lah. Do we have the downpayment ready? Perhaps Account 2 in the EPF? Perhaps from the PAMA (Pa Pa and Ma Ma) bank? Perhaps lower this down to an apartment of 3 rooms instead? This will also lower the downpayment necessary too.
If I am the one deciding… you already know my answer yeah. This is kopiandproperty.com Of course the founder; me will prefer the investment option instead. Cheers.
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