Buy or rent?


#1

Do you rent, or did you buy?

  • Rent
  • Bought

0 voters

Just curious, as many many Taiwanese are, do you rent your house, or did you buy it?
I bought into the market six months ago as (among other reasons) I figured the prices couldn’t go any lower… we’ll see about that of course.


#2

Rent, since I don’t know how long am I gonna stay here …


#3

Bought, with the same thought that prices wouldn’t go further down. As well it makes more sense on a longterm basis and I hate moving!


#4

Am in the process of buying, despite severe misgivings. Mainly because I’m fed up with living in someone else’s home and being subject to the tyrannies (benign or otherwise) of a landlord. And also because it gives a greater sense of security to live in a place that one actually owns lock, stock and barrel. But it does have the disadvantage of being something of a millstone – if those drill-happy, piano-playing neighbours from hell with a clutch of screaming kids move in, escape will not be so easy.

And I’m not so optimistic as to believe that prices have reached the bottom yet – at least not in Taipei city or county, though possibly so elsewhere. I fully expect the property to fall in value in the short term and maybe longer.

By the way, did the seller’s lawyers get their knickers in a twist over registering the buyer’s ownership in a non-Chinese name?


#5

[quote=“Omniloquacious”]
By the way, did the seller’s lawyers get their knickers in a twist over registering the buyer’s ownership in a non-Chinese name?[/quote]
We used my wife’s name as she was young enough to qualify for the special loan package for first-time, young buyers.
The seller was cool with us and I think would have taken a Martian’s money for the place quite happily. 8)

Risky? Since the mortgage is about what we were paying before for rent… I don’t think it’s an issue. If we walk away from it tomorrow we’re not much worse off.

The thought of the next move always used to get me down, even if it was a year away, it was there. I used to hate that feeling, like with visa runs, only 58 days to go before the next visa run. Tiring.

It was also a good excuse to splurge on new furniture and decorate the place how we wanted it, rather than how our LL would accept it back without argument…

(No disrespect meant towards any Martian members…)


#6

Interesting topic. I started one similar earlier this year on whether you were buying a place here or back home. The general feeling was the properties in Taiwan were still going to drop further, so most recommended buying back home. I plan on buying one back in Aus next year, then renting it out before returning to Taiwan.


#7

Buying is best if you want to stay in literally the same place for the next decade or so.

In case you plan to do that, waiting for the prices to fall further does not serve a purpose in my view. The prices here can continue to go down or quite some time yet. Waiting for that perfect time to get into the market (ie time the bottom) is only a good thing if you want to speculate in a price hike by the time you sell (I hereby imply that you want to sell near the next market top). If you don’t want to do that, just buy now and slowly pay off the mortgage.

Housing as an investment is in general bad idea. To buy your own place and get it done up the way you want it is an excellent idea.

I must admit that the flexibility of a rental suit me better.


#8

We bought. Used my wife’s name, as we were having a devil of a time :imp: proving that Taiwanese are permitted by law to purchase real estate in the state in the US from where I come.

I like the feeling of beeing settled. After so many years of playing the ramblin’ man 8) , I’m comfortable having a place to call home… and we will be here for a long time.


#9

Buying vs. Renting…

Variables to consider strictly on a financial standpoint (I believe I’ve done my homework… Am I missing anything?):

1- Expat status? US expats can deduct $75K annually
2- Mortgage interest deductions: US can deduct 100% of interest. TW has a cap of $300,000 NT. ($9,375 USD) per year
3- Rental deductions per year: TW has $120,000 NT that you can expense off your rental per year assuming your landlord is reporting his/her rental income.
4- Rental Average cost per Ping in Taipei nice area: $1100 NT
5- Buy Average cost per ping in Taipei nice area: $400,000NT
6- Mortgage rate over x years…

So do the calculation… I’ve done my own calc and found that if you buy a place with a mortgage under 150K US, you get all the deduction benefits. Any higher and you'll be throwing away… You are better off investing in other securities or foreign properties and renting in TW.

Where is the market going?

Well with all the NPLs, commercial space a plentiful. With the draw of China, foreigners are moving in droves there. So, where is the demand for high priced properties in Taipei? Taiwan locals? Question to ask yourself is: do you believe you will be able to sell this property 10 years from now when you finally decide to leave TW. And whether the property will still be around with the Earthquake and flood factor.

But if you have family here for the long term and don’t worry too much about your finances, then the security and the piece of mind of having your own home is “may be” worth the buy…


#10

In regards to purchasing property in Taiwan. What are the up-keep fees associated when purchasing a property, because in Sydney, Australia, you pay stamp duty (government tax), solicitors fees, home loan application fee, are there similiar fees attached in Taiwan? Then after purchasing the property if it is an apartment you need to pay council rates, water rates & also strata levies (management fee for the apartment). Are there related fees here. Also what about the insurance of the property, especially against natural disasters like an equake, are you covered. Also how reliable are the insurance companies here when making a claim?
The reason I’m asking is that I too am thinking whether it will be good investment for my wife & my self to purchase instead of renting. Because to commit X amount of years & energy into paying it off, I personally view it as a major investment, even if I am living in it.
To Amos, I’m not sure when the last time you returned to Oz, but if your thinking of purchasing in Sydney, now may not be the best time. As Sydney property prices I think are too inflated & if your thinking of leasing it out, I’m not sure if your rent will cover the morgage repayments. You can check out the site: www.domain.com.au


#11

What is one looking to pay in taipei for say a 2 bedroom apartment in a relatively new building? For those whom have purchased, did you buy a new developement or an older home? What are the avantages/ disadvantages to new/ old buildings? How much can you negotiate the price on the listed price of the property? Prior to purchasing do you do a building inspection (structural examination & pests check)?
Interested in all replies. Thanks


#12

Prices are on a ping basis. How many pings do you want your 2 bdrm to be. Depending on the neighborhood, in Taipei, prices average $400K NT per ping and rent in the same neighborhood is about average $1100 NT per ping.

Yes, there are common charges here in TW on top of your mortgage.

Published in many realestate books, listing prices are definitely marked up. It is common to be able to negotiate 20% down.


#13

What is one looking to pay in taipei for say a 2 bedroom apartment in a relatively new building?

You mean renting? USD 1.5k / month and aboveI rekon …


#14

Buying now in the U.K. – or any of the other Anglo-Saxon countries – is not a tremendously good idea. The property markets in those countries have bubbled up to bursting point, and when the bubbles burst, values could plunge dramatically. At least here in Taiwan there is not that much room for a further substantial fall in prices, barring attack by the mainland and/or collapse of the local economy.

I would say that it’s better to buy a new property. First of all, buildings put up since 921 are likely to be more earthquake resistant. They’re also likely to have much better plumbing, wiring, etc. (which I’ve generally found to be appallingly shoddy in older buildings) as Taiwanese now demand higher standards for these things in new developments. Secondly, with such a glut of surplus property on the market and so many old places being auctioned off cheaply by banks and the courts, a newer place will much easier to sell at a reasonable price if you need to. It seems that most activity in the property market now is people upgrading from old homes to new ones, and there’s little interest in anything old unless it’s available at a truly knock-down price. And thirdly, it’s just so much nicer to live in a place that’s spanking new.

I’m paying around NT$4.3~4.4 million for a new 21-ping flat in Hsintien. With an internal staircase and upstairs rooms (currently under design), it’ll have over 30 ping of usable floor space, which isn’t too bad for the price. There’ll be a fitness club and swimming-pool on the ground floor, and a parking space for my scooter underground. Even if property prices continue to slide and I lose quite a lot of money when I eventually sell it, it’ll be worth the outlay for having a place of my own to live in during the intervening years. When you take into account the rent I’ll save, I probably won’t end up much worse off financially. And if by any chance the property market rebounds and its value goes up, that’ll be a very nice unexpected bonus.

The construction company seemed quite surprised that I wanted it registered in my own name. They’re used to other foreigners using the wife’s name, as most foreigners who buy are already married to local girls (or guys). They tentatively suggested that perhaps I should use my girlfriend’s name, but I don’t much like the idea of that – though it’s a stable relationship and likely to end up licenced, it ain’t there yet and one never knows. Their lawyers are still stumbling over it – they promised completion within three weeks, but after two months it’s still not done, and their excuse is always “It’s because you’re a foreigner, which makes it much more complicated.” Haven’t we all heard that tune before!


#15

I’m buying an aprtment at the moment so here’s what I know, if it’s any help:

It’s a very small aprtment in Jilong. About 8-10 pings I figure. It’s in a large newish aprtment complex with a pool and small gym etc. The price is 1,500,000 including a parking space (which accounts for about a third of the price). It has a great harbour view. We got a first time home-owners loan of less than 3%, which makes it worthwhile. Legal costs etc are about 50000. Rates are very small, but there’s a 500 a month management fee which we’ll pass on to the tenants. I have no idea how the value of this place may rise or fall, but basically the low loan (and the 300,000 deposit from my mother in law) mean that the rent should easily cover repayments.

Brian


#16

Hybrid, I was looking at Melbourne actually. Buying a $A320,000 house would be about $A1,600 in repayments a month, but with rental income of around $A1,300 a month would leave a payment of only $A300 or $NT6000 a month.

Then again, some have said wait a year or so and see whether the housing boom slows. At the moment, we’re playing the waiting game, but like someone said earlier, it seems all anglo saxen countries prices have boomed out’ve town. Qisi wo la.


#17

Amos, a house in melbourne for Au$320.00 is a bargain. In fact any house for that matter in either Sydney or Melbourne especially located near the CBD is a bargain! I’m more familiar with the Sydney property market, but from what I read & hear Melbourne is a great place to buy property and was also recently voted as a better place to live than Sydney, in some pole I read in the paper here. Let me say that in sydney, unless you live so far out in the sticks, I doubt you could get a house for this price, especially any where near the city. So good luck on the propertive purchase of the property. So from this I gather that you are from Melbourne? Well hi, from a fellow Aussie.

To Omniloquacious & Sir Don, was there any government taxes applied when purchasing your property? What about insurance for the building? Is is safe to buy of the plan or is it better tro wait for it to be completely built?


#18

Hybrid,

I think that a portion of the purchase price represents stamp duty or its equivalent, but that’s a matter for the builder/seller to pay. There are no additional taxes for the buyer to foot, as far as I’m aware.

There’s a small annual property tax to pay, but I’ve been assured that it’s only a matter of a few thousand NT$.

I’m probably not going to bother with insurance. If the place falls down in an earthquake and I survive, then I’ll thank my lucky stars and won’t worry too much about the material loss. If you’re taking out a mortgage, then I’m sure that the bank would require you to insure the property. As I’ve paid cash for mine without any mortgage, that doesn’t apply to me.

I would not risk buying a flat before it has been built. I trust construction companies here about as much as I’d trust George Dubya Bush. I’ve read an awful lot of reports and heard so many stories about people being conned by the builders and not getting anything like they’d expected. And the legal system isn’t exactly friendly to those who would try to obtain redress in such circumstances. Seeing is believing: better to be able to carefully examine what you’re buying before you go ahead and commit to it.

It’s a pity that there’s no system for having a property surveyed as we do before we buy in England. I’ve mentioned this to a few local people, but the concept is totally alien here.


#19

Rampage

You forgot a couple of factors which for me make the difference. With a mortgage at the end of the term then the property is yours whatever it is worth, whilst those renting will still be paying the same or more per month. Our flat costs us about 1000 NT more per month than we paid when renting, but it is also slightly bigger, so it evens out.

Renting over the long term does not normally make financial sense, although a number are happy doing it for the flexibility.

The market is not as bas as some make out either, although in certain areas it is. We purchased our property back in 96 i think and it is still worth approx 40% more today having paid all duties and taxes etc, than we paid for it. The areas really sugffering are those just outside of the main Taipei area as well as the run down areas.


#20

I agree with your point. If you buy, you will own your own place in the end while renters will still pay. Every person’s case will be different. It may make sense for you to buy and stay in Taiwan for the long haul. But, until you complete your mortgage payments (20 - 30 years out), you are not better off than a renter. Financially speaking…

It may make sense for others to park there principal (alot of cash) in other less risky investments and have the mobility option. In this case, if you leave before 20+ years, you are better off financially. But if you stay for the long term, then it becomes a break even analysis to determine how long your capital gain from your investments can sustain your rent.

Another thing to consider. If I buy a property, I would like the rental income that I can generate from such an investment to be able to cover my expenses (giving me more options). In NYC, San Fran, etc., rental income will more than cover your mortgage plus maintenance leaving you with modest chunk of cash monthly. But in Taiwan, this is not the case.