Buying a Condo vs. Renting a Condo: Which Is Best for a Salary Earner?
Condominiums are very popular residences nowadays, favored by students, salaried employees, or anyone who wants to have their own place to live. Most people choose to live in a condo rather than a house. Owning a residence, whether a house or a condo, is considered an important milestone of stability in life. For those wondering about buying a condo vs. renting a condo, especially for salaried employees, which option is more suitable and worthwhile, finding the answer can be challenging.
So, let’s explore which option is best for salaried employees: buying a condo or renting one. We will compare both choices to help you assess which one you are more ready for—whether you are prepared to own a condo or if continuing to rent is the better path for you.
Want to Stay in a Condominium: Buying vs. Renting — Which Is Best for a Salary Earner?
Purchasing a property or buying a condominium unit of your own requires a significant amount of money. Some people currently live in dormitories and want to upgrade to living in a condo. For salaried employees who want to own a condo, it is important to carefully consider whether buying or renting a condo is more suitable for office workers. Let’s find the answer by looking at the pros and cons of both options to determine which is better for salaried employees.
Buying a condominium of your own — the easiest way to own a condo is by applying for a mortgage loan. However, from the initial steps such as reserving the unit and making down payments, there are considerable expenses involved. The initial lump sum needed is usually about 10–20% of the condo’s total price, along with other additional costs that arise up to the transfer of ownership, where you’ll need to pay transfer fees on the day of transfer.
The key factor is savings. For those who already have savings, owning a condo won’t be too difficult. If you’re just starting to save, you should aim to save at least 20% of the condo’s price. This not only helps with the down payment but also benefits your loan application by reducing the total debt burden.
Investing in a condominium means you become the owner of a property, which allows you to renovate or customize the unit as you wish. Although it may involve debt, in the long term, a condominium is a type of real estate that tends to increase in value over time — especially those in prime locations. The value of a condo typically rises with the development and growth of the surrounding area. Owning your own condo gives you this advantage. You can also choose to sell it later if needed. Additionally, the interest paid on your mortgage each month can be used as a tax deduction.
Once you become the owner of a condominium, the expenses don’t end with the booking, down payment, or title transfer. Every condo resident is required to pay maintenance fees, also known as common area fees. Many projects offer good after-sales services, but residents still have to bear a significant cost for maintenance. Being a condo owner means not only paying monthly installments but also being responsible for additional ongoing expenses. Therefore, assess your financial readiness to handle all costs that come with owning a condominium. While there are clear benefits, there are also considerable expenses before you can truly move in and fully own the property.
Renting a condominium also requires an initial payment, but the amount is significantly lower than buying one. Tenants are typically required to pay a security deposit, advance rent, and possibly an insurance fee — all of which are governed by law. The exact amount of this initial payment depends on the monthly rent. Once totaled, the tenant must pay this lump sum before moving in.
After moving in, the tenant does not need to pay for maintenance fees. If anything is damaged or needs repair, those costs are the responsibility of the condo owner, not the tenant.
When you rent a condominium, it means you are not the actual owner of the unit, so you cannot renovate or make major modifications to the space as you wish. However, you can decorate the interior, as long as no damage is done to the property. Tenants are required to maintain the original condition of the room as much as possible. When it’s time to move out, the deposit, security fee, and advance rent will be fully refunded — provided no damage has occurred.
Unlike buying a condo, the rent paid each month cannot be used for income tax deductions, as mortgage interest can. As commonly known, condominiums tend to increase in value over time depending on the development of the location. Although renting does not involve debt, monthly rental payments are similar to paying monthly installments to a bank — but without gaining ownership or long-term financial benefit. The increasing value of the condo you rent does not benefit you as a tenant.
Still, condos offer a good living environment and are suitable for comfortable living. If you want to live in a condominium but do not have sufficient funds or cannot afford the loan payments and interest, renting is a practical and reasonable alternative.
Buying and renting a condominium both have their own advantages and disadvantages, including differences in value and long-term benefits. Once you understand the pros and cons of both options, many people may already be able to decide whether buying or renting a condo is more suitable for them.
For those who are not yet financially ready to purchase a condominium, you can start saving from today. With consistent effort, you’ll likely be able to own your dream condo in the future.
