You’re never too young to buy property.
Getting a toehold in the property market as soon as possible is a smart move – even for young single people taking their first steps on a career path.
Getting a toehold in the property market as soon as possible is a smart move – even for young single people taking their first steps on a career path.
That’s the word from Rudi Botha, CEO of BetterBond, SA’s
biggest bond originator, who says young adults who hold off on buying their
first property until they have settled in to a new job or until they get
married are losing out on an opportunity to start building real wealth.
“It is true that as a young person you may be a prime
candidate for company transfers, especially if you are single and
newly-qualified. You may also be worried about getting ‘stuck’ with a property
that your future partner won’t like or is too small for a family.
“But a residential property is not just a place to live. It
is also an asset that appreciates in value, unlike cars, clothes, furniture and
other things that young people tend to buy, and a great savings mechanism at
the same time.”
According to the latest FNB House Price Index, he notes,
property prices in SA are currently 90,8% higher, in real (after inflation)
terms than they were in 2001. “In simple terms, this means that the property
buyer who bought a R1m property with a R100 000 deposit (investment) in 2001
would have made a return of almost 1000% on that initial investment, and the
younger you are when you buy, the more chance you have of achieving such
long-term returns.
“In addition, buyers who put spare cash into their bond
account will not only get a better effective rate of interest (tax free) than
they would on money deposited to a bank savings account, but also stand to cut
many thousands of rands off the total cost of their home by paying it off
early.
“If you had a bond of R1m, for example, and were able to pay
an additional R600 a month off the outstanding balance of your bond at an
interest rate of 10%, you would reduce the loan term from 20 years to 16 years
and 10 months, and save more than R245 000 worth of interest.
“And as long as a home is increasing in value and the bond
is decreasing, the owner is building up equity in the property, which can be
used as security for other investments, emergency funding or a deposit for
another property if they decide to sell and move on. This sort of wealth
creation obviously doesn’t happen when you rent.”
Now is also a good time to buy, says Botha, because prices
are very negotiable and the banks are keen to lend to home buyers. “But young
buyers do still need to be careful not to over-extend themselves financially.
Enlisting the help of a reputable bond originator like BetterBond to obtain
bond pre-qualification is the best way to find out how much they can
comfortably afford to spend, and they should also work out how much it will
take to run and maintain a property before they sign a sales agreement.”
Issued by etc
Anne-Marie Bamber is Norgarb Properties dedicated Home Loans Consultant. She has over 15 years’ experience in assisting clients with their Home Loan needs and has placed many happy families in their dream homes.
Contact her today for no cost stress-free home-buying.
Anne-Marie Bamber
Home Loans consultant
Tel: +27 (0)21 851 3568 | Fax: +27 (0)21 441 1494 | Cell: +27 (0)82 071 1665
E-mail: anne-marie.bamber@betterlife.co.za
Contact her today for no cost stress-free home-buying.
Anne-Marie Bamber
Home Loans consultant
Tel: +27 (0)21 851 3568 | Fax: +27 (0)21 441 1494 | Cell: +27 (0)82 071 1665
E-mail: anne-marie.bamber@betterlife.co.za