Achieve your property goals through proper planning

With another year drawing to an end, it is the ideal time for consumers who aspire to homeownership in 2015 to take stock of their financial position and assess whether they are on the right track with their financial planning, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
“It is no secret that financial institutions have fairly stringent lending requirements and it has become increasingly more important for prospective homeowners to keep their financial affairs in order to show the necessary affordability ratios. This also applies to current homeowners who might require additional finances to undertake renovation projects or upgrades to their property,” says Goslett. “Taking some time to step back and assess their financial situation will give consumers the opportunity to examine their financial planning action steps and measure the progress they are making towards attaining their financial objectives.”
Goslett suggests that when undertaking an annual financial review, consumers should revisit the foundation of their financial plan by relooking at their resources, goals and priorities. “This is an excellent time to re-evaluate the situation and include any major life changes that may have occurred during the course of the year. These changes could include several changes such as a marriage, birth of a child, a death or starting a new business feature. All of these factors will have an impact and play an important part in how the financial plan is adjusted to meet the end goal.”
He adds that a major life change will definitely change a potential homebuyer’s needs and possibly their projected time frame to meet their financial goals. “This is especially true in the case where a family is growing and the home they are staying in no longer meets their needs,” says Goslett. “A family in this situation will need to purchase a home sooner rather than later, which would mean that more money would need to be set aside for the 10% -20% deposit and other costs associated with a property transaction. A professional financial planner could recommend strategies for time-sensitive objectives.”
While consumers are busy with their annual review, Goslett says that they should also consult with a tax professional who can determine how any life changes may have impacted on their tax status. “Being prepared will make the process of submitting an annual tax return far easier. Having all receipts and documents in order will provide the consumer with valuable information about their spending habits and what is being spent on deductible items. Having everything in order will also assist in determining whether they are getting value for money on expenses such as insurance, flexible spending accounts, cell phone plans and even investment fees,” says Goslett.
A vital element to any financial plan - especially if the goal is to show affordability to banks and assist in getting approval on home loan finance - is to pay off existing debt as fast as possible, wherever possible. “Even a small additional payment of R100 a month can make a big difference in reducing debt levels and showing steady progress. Setting savings aside can also help consumers to stay out of debt, while building an emergency fund at the same time. For this, a set amount should be transferred into a savings account each month,” advises Goslett.
He adds that is highly beneficial for consumers to monitor and benchmark their financial plan and investments. As part of the annual review, consumers should measure the performance of their investment portfolio. “The performance of an investment portfolio is typically measured by several benchmarks, however the most important of these is the consumers own benchmark. If they require their investment portfolio to grow by a specific percentage annually, the portfolio should be measured and adjusted to meet this requirement where possible,” says Goslett.

Assessing your financial position and making the required changes is not something to put off. “It is vital that consumers know what they are spending their money on and how to implement the necessary changes to their financial plan to achieve their homeownership goal. Take time to examine your financial and life goals in order to determine the course you need to be on to attain these objectives. Review changes that have occurred and anticipate further changes that may occur in the future. With the correct planning nothing is out of reach,” Goslett concludes.

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