Compare & Contrast: Buying vs Renting Condos
If you are reading this, chances are you're looking for a condominium to settle down and conveniently go to work thanks to travel convenience. Whichever the reason is, you're probably deciding whether you should go cheap with only renting out the condo unit or just buy it altogether.
Today PropertyScout will be walking through both the benefits and drawbacks of buying and renting condos to help you decide which would be the more suitable option for you.
Buying
The Benefits of buying
- Complete Ownership: Of course, once you have completely paid for the unit either by paying in full, through installment payments, or through loans, you gain complete ownership over all aspects of the unit.
- You can make money off it: If at any point in time you have to move, you also have the option to list your unit out for rent to make money for yourself as well.
- Adding value: If the condo is well-located, easy to travel to, or has regular maintenance, more value can be added in the future or you can charge higher rents, as well as make more profit.
- Alleviating loan taxes: You also have the option to alleviate the cost of loan taxes using your total annual interest rate, provided that you meet these three conditions:
- Must have an income according to article 40.
- Must have residential credit.
- Must request loan from a Thai bank only.
The Drawbacks of buying
- Costly: Buying condo could cost insane amounts of money, including common fees and others. The bigger the unit, the higher the cost. Moreover, for those who buy condos using bank loans, he/she will be contractually attached by 10-30 years.
- Potential Debts: If at any point in time you fail to fulfill the costly installment payments or go against any of the contracts, you will discredit yourself and create more unneccessary debts in the future.
- Difficult to move: If you fail to fulfill the installment payments right from the start, you won't be able to resell your unit and therefore must be contractually obligated indefinitely.
Renting
The Benefits of renting
- Less Costly: The rental fee is always cheaper than the condo's sales price.
- Less Obligations, debt-free: Condo rental contracts are annual contracts. If you live for the entirety of the contract or terminate the contract ahead of time, just remember to pay the relevant fines and you should be free of debts in a long run.
- Easy to move: If your condo isn't particularly well-located, you will be allowed to move within one year of your stay or until the expiry date of your contract.
The Drawbacks of renting
- No ownership rights: Whether its the condo as a whole or just the unit, you will not be granted complete ownership, nor can you redesign or redecorate your unit.
- The rent does not amount to any added value: The only person who benefits from the rent you pay is the landlord, as stated before, because you have no complete ownership over the condo.
- No compensation once the property makes more money: Once the property makes more money or makes more profit in the future, you will not make any profit from that and might potentially be charged higher rental fees.
So, which is better?
The primary contributing factor to this decision is your budget preparation. If you have a sufficient amount of money to fulfill the first round of installment payments and can pay the monthly installments without impacting your general transactions, buying would be a suitable option.
On the contrary, if you feel sales prices are too high or if you aren't financially prepared enough, renting out a condo unit may be a more appropriate option as you can keep your spendings in check and potentially save up for buying a condo unit completely in the future.
If you are interested in buying or renting a condo unit and you know you haven't found the condo where you would like yet, please get in touch with us at PropertyScout. Our property consultant team will be very happy to help answer your questions and concerns.
