We speak to Vincent Lim of CozyHomes to find out the pros and cons of renting and owning a property.
Of late, the debate about homeownership versus renting has been creating quite the buzz, with the paradigm shifting more towards renting as the better option, compared to previous years, where owning was said to be the best (or right) thing to do.
Thankfully we managed to get in touch with Lim, who has been in the property industry for a while now, to enlighten us on why renting is fast becoming the more popular option these days. In its essence, CozyHomes aims to help tenants looking for beautiful, fully-furnished homes for rent.
Why do you think more people are now moving towards renting, instead of owning property?
Back then, a lot of people did want to own, but based on my personal opinion now there are quite a number of reasons why renting is more favourable these days. One of the reasons is price saturation, which means that there is very little room at this point in time for capital acquisition. For most younger people, they would think that it’s relatively cheaper to rent, rather than to buy.
Secondly, it’s not easy to get a mortgage loan. Although interest rates have been dropping during the MCO period, the rules and policies by banks are still stringent and loan approval isn’t easy to come by. One example is that banks have now started to categorise incomes as ‘essential’ and ‘non-essential,’ and a lot of industries fall under the latter. This means that people within those industries have, in a way, lost a certain income rating compared to previous years.
On top of that, not many are ready for the long-term financial commitment. Buying a house is not a one-off payment, but up to 35 years (maximum) of payments. Instead of needing to allocate a significant sum from their income to pay for the instalments, most would rather prioritise this spending on their lifestyle.
Plus, when we talk about current lifestyles, people are looking at flexibility, freedom, job-switching and such. Not many want to be tied down. They wouldn’t want to stay in one place for too long, so they don’t buy and would rather rent the house. Priorities have changed drastically over the years.
What areas can CozyHomes help with acquiring a property to rent?
We’re scattered around the whole Klang Valley, but there are pros and cons. Allow me to explain: our mission is to ensure that those who enlist our services are able to rent fully-furnished designer homes, so us being around Klang Valley helps us meet the demand of a lot of tenants. However, the cons are that as we have limited units within a single area, we have to double our effort to rent it out on behalf of the owner.
What do you mean by “doubling the effort”?
There are many property agents out there who specialise in a certain neighbourhood or building development. We either work with them closely or spend more resources on advertising and listing in order to get the unit out there. We’re not trying to replace agents — we want to increase the efficiency of how agents do their work. For example, if agents work with us during this pandemic, they can take advantage of our virtual tour service and not have to physically be there to show the property to potential tenants – which was good during the MCO. In fact, due to our virtual tour facility, we managed to rent out 25 properties during the MCO.
Interesting. Tell us a bit about the CozyHomes virtual tours.
We started this project before the whole pandemic hit, back in 2019, and it has proven very timely and beneficial for us. It’s not just nice, high-quality photos, but potential tenants can also take a virtual tour and inspect the property. If the tenant is happy enough, they can place the booking right away.
We also give an assurance to potential tenants that they are getting what they’re seeing. If the property isn’t like what they’ve viewed through the photos or the virtual tour, they are entitled to a 100% money-back guarantee.
Give us a brief walk-through of how CozyHomes operates.
If an owner wants to list their home, there is a list of criteria to fill first. We don’t accept just any fully-furnished unit. We look for the designer element, in which there are three aspects. First is the usage of the wall, the lighting orientation, and finally the decor of the house. If you want to be listed under CozyHomes, you need to meet those standards.
If they don’t meet our designer standards, we will offer owners the choice of renovating their unit. This will be done by our sister company, The Makeover Guys. Then, we will begin marketing the unit for rental. We will send out the listing to our network of agents and leverage on online platforms. By the time the renovation is complete, there should already be a tenant on standby to rent the unit.
After we acquire the tenant, we will also manage the property and the tenant on behalf of the owner. For example, we’d help handle not only rental issues but also billing monitoring to make sure the owner has as little to no worries. There are also a number of packages and subscription programmes that cater to the needs of the owner.
Could you give us a rough outlook about what you think the property industry is going to be like?
I think the property market might be quite gloomy for the next 18 months or so because rental prices have been dropping, and the main reason is that demand is low. Indirectly, rental rates affect property prices in the near future, so I don’t think property prices and growth are going to be promising in this near future.
(All images: CozyHomes)
This article first appeared on Augustman Malaysia.