How much you use your salary to pay for rent? If your budget for rent is more than 30%, it is too much. That message have been told by Khazanah Research Institute’s research director, Dr Suraya Ismail.
It is a huge loss if you use too much money for rent.
Dr Suraya said ‘The Lifestyle you want sometimes dictates what you are willing to pay’. Tenat should not use 30% of their monthly income as it is rate typically for whom pay to own a home so it shouldn’t be for renting.
If you still rent and using that 30% of your income, you need to make sure that other one-third could give return that allow you to continue to rent untill your retirement age.
She said that some people sharing a 800 sq ft house with eight strangers which is absolutely compact. Dr Suraya also noted the different scenario in Malaysia compared to EU countries where there is a higher number of house ownership rate without mortgage.
In German, some people preferred to rent rather than own homes because it gave them mobility and the option to work in different cities.
However, she felt that it must be tough to be landlords in Germany where every three years, they would have to do maintenance to ensure everything was in working order. “If there is mould, they must replaster or re-tile the place. Every five years, they must paint and upgrade their premises.”
There is no legislation in Malaysia to compel landlords to maintain their homes. And to compound the problem, she said most people were concentrated in the Klang Valley for its job opportunities.
“This is where we see the escalation of prices.She said there is no proper data on rent in the country, so it is hard to determine its direction.
“There must be a way to determine rental prices in certain places in KL. And if there is a rapid escalation, then we can take action.”
She said that the terms in a tenancy agreement must be followed.
Source:- The Star