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W O R L D THINK BEFORE YOU TAKE THE PLUNGE INTEREST RATES might be low, prompting many people to buy their first homes but young people need to be sure homeownership is right for them, says Gerhard Kotzé, managing director of RealNet. “For example, if you decide to save up for a 10% or 20% deposit, so that you can keep your bond costs down, you need to think realistically about how long that might take and what other goals might be affected.”
WHAT TO DO WHEN YOU MOVE INTO A NEW HOME
Alternatively, you might decide to go ahead with a purchase with only a 5% deposit in hand – or even to accept one of the 100% loans currently on offer from the banks for those with good credit records. However, Kotzé says it is usually better to keep your bond low and use any spare cash you might have to pay it off as fast as possible to build up equity – even if this means buying a smaller or less expensive property. “If you have children,
this might be problematic, especially if they need space for home schooling in addition to the space you need for a home office. You might find it suits you all better, right now, to rather rent a bigger home where you can all be comfortable.” In addition, he says, young people need to anticipate the total costs of homeownership and work out if they will be able to afford them without putting a strain on their finances every month.
Don’t rush to make big changes to your new home until you have lived in it for a while.
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IRST-TIME homeowners might be filled with excitement at the prospect of finally having a home of their own but they should take some important steps as soon as they move in, advises Dawn Bloch, agent for Lew Geffen Sotheby’s International Realty in the southern suburbs. “By (doing
so), you can offset many of the potential problems and are likely to save yourself a lot of stress, effort and money down the line.” Her suggestions include:
Do a deep clean of the home prior to moving in. Change the locks and make spare keys as there is no way to know whether there are copies of the old keys floating around and who might have them. Make sure you are properly insured, not just for the replacement value of the building, but all its contents. If possible, live in your home for 12 to 18 months before making big changes as any initial ideas may change once you have lived in it for a while.
Young people need to consider their circumstances before buying a home.
Tips for landlords seeking tenants
Don’t overspend to personalise your home. Rather start with small things such as curtains or a coat of paint until you have adjusted to your new homeownership expenses Create a home maintenance checklist. Keep the receipts for all improvements as, when you sell your home, you will have to pay capital gains tax which is calculated from the difference between the original price you paid and your selling price. You can offset all improvement costs against this which will reduce your tax bill. Maintain an emergency fund for unexpected problems.
STELLENBOSCH INTENDS TO GO GREEN
An empty garage could bring in a rental income.
Independence from Eskom will attract people to Stellenbosch. THE PLAN for Stellenbosch to become the first town in South Africa to produce its own “green” power and eliminate load shedding is excellent news for the local property market, says Berry Everitt, chief executive of the Chas Everitt International property group. This is in response to the
recent announcement by the Stellenbosch Municipality that it intends to become independent of Eskom and is investigating alternative power supply options. Everitt notes one of the biggest effects of the Covid-19 pandemic is the rapid rise in corporate acceptance of fulltime remote working, which has
freed large numbers of people all over the world to “de-urbanise” from big cities to smaller centres where they hope to enjoy a better quality of life. “And if Stellenbosch is able to offer a life without load shedding, that will be a big attraction for those making this kind of move.”
COLLABORATION is key for landlords who are struggling to find tenants or get the rental incomes they need. Paul Stevens, chief executive of Just Property, says landlords should look at how they can leverage their assets in a shared environment. Some examples he gives, and questions he poses, are: Does your apartment have a garage that could be let separately to bring you higher rental income? Do you have uncapped wi-fi that you could make available to neighbours in return for something else that your tenants would benefit from, like a cleaning service? Is your tenant open to a house-share to reduce his or her rent? Is there a financial agreement you can come to with your bank, such as extending the term of your mortgage loan? Ultimately, there will be positive and potentially negative implications for all these options and landlords need to evaluate each one carefully, he says.
