We speak to Vincent Lim of CozyHomes to find out the pros and cons between renting and owning a property.
Of late, the debate about home ownership vs 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 Vincent, who has been in the property industry for awhile 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 yea, a lot of people did want to own, but based on my personal opinion now there are quite a number of reasons that renting is more favourable these days.
One of the reasons is price saturation, which means there’s very little room at this point in time for capital acquisition. So for a lot of youngsters, they would think that it’s relatively cheaper to rent, rather than to buy.
Secondly, it isn’t easy to get a mortgage loan to begin with. Although the interest rate has been dropping during the MCO period, the rules and policies by the banks are still becoming more 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 non-essential category. This means that people within those industries have in a way lost a certain income rating, as compared to previous years.
On top of all that, not many are ready for the long-term financial commitment. Because buying a house is not a one-off payment, but it’s up till 35 years (maximum) of payments. So, instead of having to allocate a significant sum from their income to pay for the instalments, most would rather prioritise this spending on their lifestyles – eg. travelling (when able to), online shopping, and such.
Plus, when we talk about current lifestyles, people are looking at flexibility, freedom, job-switching and such. Not many want to be tied down so to speak. Thus they wouldn’t want to stay in one place for too long, so they don’t buy, and would rather rent the house. Thus priorities have changed drastically over the years.
What areas can CozyHomes help with getting a property to rent?
Well we’re scattered around the whole Klang Valley, but having said that, there are pros and cons to it as well. Let me 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 is that as we have limited units within a single area, we have to double our effort to rent it our on behalf of the owner.
What do you mean by double the effort?
As you know, there are tonnes of property agents out there who specialise in a certain area or building. So either we work with them closely, or we have to spend more resources on advertising and listing in order to get the unit out there.
We are not trying to replace the agents, what we’re trying to do is to increase the efficiency of how agents have been doing 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 period. In fact, due to our virtual tour facility, we managed to rent out 25 properties during the MCO period.
Interesting, tell us a bit about the CozyHomes virtual tours.
Right, so we actually 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, potential tenants can take the virtual tour and inspect the property. And if the tenant is happy enough, they can place the booking right away.
We also give an assurance to would-be tenants that they are getting what they’re seeing; so if the property isn’t as 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 are a certain criteria to fill first. We don’t simply accept just any fully-furnished units. We’re looking for the designer element, in which there are three top criteria we look for. First is the usage of the wall, the lighting orientation and the decor of the house. If you want to be listed under CozyHomes, you need to meet those standards.
What we do is we would offer the owners the choice of renovating, if they don’t meet the standards, which would be done by our sister company, The Makeover Guys. And once it is done, we would have already started 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 stand by 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 billing monitoring and such, to make sure the owner has as little to no headache. And there are 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 why is that demand is low. And indirectly, rental rates affects property prices in the near future, so I don’t think property prices and growth are going to be promising in this near future.