Purchasing your first property is right up there with some of life’s most significant milestones. It’s justifiably on par with things like marriage, graduation, a first job or a move abroad. Property is a big investment and likely to be one of the biggest and longest you’ll ever commit to.
“One’s first property, whether it’s your first home or simply the first one in a versatile portfolio, is likely to always be keenly remembered,” Carl Coetzee, CEO at BetterBond shares.
Entering the property market is always positive and a sign of economic growth and prosperity. The scope of the transaction, particularly for first-time buyers, also means there is room for things to veer off plan. “While certainly not a reason to discourage property purchases and investments, there are a number of factors to pay attention to that will ultimately ensure a more streamlined process,” Coetzee says.
Over the years Coetzee and his team have learned that the points listed below are the ones most frequently cited by first-time buyers as, “I wish I knew this before I signed on the dotted line for my property”!
1. Affordability is the long, short, inside and outside of it
Affordability can be a tricky concept. Property listings typically indicate what the monthly bond repayment will be and too often people fail to see that number in context. Servicing the bond is key but bear in mind that the property owner is also responsible for the property rates and taxes, levies where applicable, as well as the cost of ongoing maintenance. Make sure to take these expenses into account and budget accordingly.
The transfer and registration of the property is also a cost consideration, as it can amount to hundreds of thousands. It is possible to apply for the bond amount to cover those costs too, which can be very helpful. Speak to a trusted bond originator, like BetterBond, about the possibility of a 100% or even a 105% loan that can be used towards those fees.
2. Location location location
Harping on about the importance and appeal of a property’s location isn’t just the official property agent marketing line, but actually plays a significant role in the value of a property.
The sagest property advice has remained steadfast over the years, which is to buy in the best area you can afford. Said differently, opt for the cheapest property in the best area because location trumps structure, as the structure can always be changed or improved on, while the quality of the location is contingent on a number of factors beyond individual control.
3. Head vs heart
Tired as the phrase ‘home is where the heart is’ might be, we tend to assign a great deal of emotional value to a property. But when it comes to your first property it’s important to consult your head as much as your heart. Think about what you need the property to do for you, how long you intend staying, find out about expected growth in the area, consider what the potential rental income would be, should you decide to move on. It happens that a first-time buyer becomes hopelessly infatuated with a property that is largely impractical because of a feature, such as a hot tub in the lounge, that later becomes an annoyance and a big cost factor to do something about.
The point is to think long-term and with your financial goals top of mind.
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
