Why renting a house isn't a "waste of money"

Nov 07, 2022

It is widely assumed that renting a home is a waste of money. After all, finding a decent spouse, getting married, buying a HDB Build-To-Order (BTO) flat, moving in, and then selling your flat for a tidy profit is the simplest way to generate money.

Rental is considered as the polar opposite. It is a money trap with no return on investment because it is solely an expense.

As someone who has no immediate plans to marry (sorry, mum), I've been wondering about when I'll finally be able to move out.

My boyfriend and I have both felt pressure from our peers, particularly those who started dating in school and applied for BTO flats before graduating, sometimes with the support of their parents.

These lovely couples will receive the keys to their homes three to five years after graduation, which is plenty of time to save for and plan a lovely wedding.

Many of us, though, are unlikely to have followed such an excellent life path.

Some of us may be looking for or navigating relationships long after we have graduated. It is nearly hard to possess public housing unless we establish that marriage is a certainty.

Renting would be a better option for getting our own space.

Nonetheless, HDB rental costs, like the rest of the housing market, have been on the rise recently.

HDB rents increased by 20.9 percent in the first nine months of this year, according to the SRX Rental Index. According to HDB data, the typical monthly rent for a three-room property ranged from S$2,000 in Bukit Batok to S$2,750 in Punggol.

Couples who are waiting for their BTO flats and do not qualify for the Parenthood Provisional Housing Scheme will also be seeking for rental properties, in addition to singles wanting for their own place.

Furthermore, a new property cooling legislation requiring private property owners to serve a 15-month wait-out term before purchasing a resale unit will almost certainly increase demand for rental flats.

Even if growing prices are ignored, why should someone spend money on space that they already have with their parents or families?

Of course, this requires that you have enough space at home with your parents.

Police reports on domestic violence increased to 5,190 in 2021, up from 5,134 in 2020, according to the police on October 31. The majority of such incidences of violence were directed against spouses, next parents, and finally children.

"After the circuit breaker, we see a lot more families come forward to say, 'I want to apply for a personal protection order, I want to move out,'" Kristine Lam, principal social worker at Care Corner Project StART, told reporters at a press conference at the time.

Altercations do not even have to escalate to the point of violence for a living place to be uninviting.

As more people are able to work from home, family members' time together may become increasingly strained.

A coworker recently told us that she moved out because her siblings' children would violate her space anytime they were over to be cared for, even though she worked from home. Despite her best efforts to resolve the conflict with her family, the problem persisted.

She and her partner moved into a one-bedroom apartment for S$2,400 per month to find some calm. The benefits to her mental health and the reduction in family friction were worth the cost to her.

Moving out allows people to develop new life skills in addition to leaving unfavourable familial situations.

When I got the opportunity to study abroad, I learned to create simple stir-fry dishes so that I wouldn't have to eat instant noodles every day. That sense of duty came naturally once I stopped being fussed over by my parents.

Moving out into a rental property could thus be viewed as an investment in our own mental health and personal development.

Even if our homes are suitable for living, are we starving our parents of possible retirement income from rentals by staying in their homes?

According to an Answers.sg study conducted on November 2, the median percentage income paid to parents by all Singaporeans is 10%, with the median amount provided being S$500. That is insufficient to cover the "rent" of our own rooms, never alone the groceries and utility costs that many parents continue to pay on our behalf.

While I am not advocating that we all start paying rent to our parents, there is a cost to our housing decisions in any case. We should discuss with our family how we will reward them, whether through tangible or intangible means.

Of course, affordability is a factor that must be carefully examined. A popular rule of thumb is that people should spend no more than 30 to 40% of their income on rent, making it a luxury for many at current market rates.

However, just declaring "rental is a waste of money" ignores numerous other intangibles that we should not take for granted.