select
|

Young buyers: Car or apartment? How to be smart about your choice

Many young people starting out on their careers in 2016 will be faced with the choice of buying their first car or their first apartment.
 
“And the answer might not be as straightforward as you might think,” says Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator. “On the one hand, a car might make it easier for you to get around and improve your job prospects; you need less cash upfront to buy a car and the shorter loan tenure makes this a less scary purchase.
 
“On the other hand, a car is a depreciating asset while a property, generally speaking, will continue to appreciate in value and be worth more when you sell it than when you buy it. And if you choose the right property in a location that enables you to use public transport instead of a car, you can probably pay it off a lot faster.”
 
However, he says, people are all different and there is clearly no one-size-fits-all answer to this question. Considering the following issues, though, will hopefully help you to find the right answer for your circumstances:
 
*You might want both but which do you really need more?


If you are living with family or renting cheaply with roommates but facing a long commute to work every day, you may feel that you really need the car right now. However, you should sit down and work out whether your current rental option is really the most cost-effective solution – and whether you want to continue with it for the next few years while paying off the car. If you did not have to pay for a car plus maintenance and insurance, for example, you might be able to live closer to work even if you did have to pay more rent. And then you might even be able to save enough to buy a car for cash – or buy your own apartment sooner than you thought. 
 
*What can you afford, realistically?

There is often a big difference between what we want and what we can afford. If you decide that you would rather have the apartment, for example, you will need to save enough cash for the deposit and transaction fees, and you will also need to make sure that you can comfortably afford the bond instalment, the monthly levy, the property rates and the insurance on your current earnings. And if your finances won’t stretch to this right now, you will need to make choices that will help you to either boost your earnings or cut your living costs and start saving.     
 
*Consider your lifestyle.

Some people really don’t mind renting but hate travelling on public transport, for example, and would thus always choose the car ahead of the apartment. For others, having a place they can call their own and not having to worry about annual rental increases is much more important, so they will naturally do whatever they can to buy the apartment and worry about a car much later. You need to be honest with yourself about what your personal priority is and make your choice accordingly. 


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 May 2018
      The importance of correctly pricing a property for sale is more imperative than ever. This is according to Debbie Justus-Ferns, divisional manager of Renprop Residential Sales, who says that despite this crucial selling fact being emphasised so often, in the current market, many sellers are still expecting unrealistic prices for their homes which is having a negative impact on the ultimate sale price.
    • 22 May 2018
      Extreme weather appears to be the new normal, evident by the volume of insurance-related disputes reaching the industry watchdog’s desk. To avoid a situation in which your insurer refuses to pay up, you should proactively ensure that your home is well-maintained and ready for whatever winter has in store.
    • 22 May 2018
      As the impact of technology on the real estate industry becomes more significant, it is clear that there is a need for an objective look at not only traditional real estate models but also online and other alternative low-commission real estate agencies, to examine what they offer and what their impact might be.
    • 22 May 2018
      According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, dealing with some sort of neighbour dispute is an unavoidable part of life unless, perhaps, you choose to live on a remote small holding for the rest of your life.
    • 22 May 2018
      Buyers feel that they are getting value for money in the Northcliff area without having to compromise on aesthetics and amenities
    • 21 May 2018
      Secure living is one of the growing property trends in South Africa and Nooitgedacht Estate in Stellenbosch certainly ticks the right boxes for buyers who want a secure, exclusive lifestyle in one of the Boland’s most sought-after estates, says Pam Golding Properties.
    • 21 May 2018
      With sectional titles growing in popularity, an increasing amount of homeowners simply do not have the garden space to install a tool shed in their backyard.
    • 18 May 2018
      Home improvements are a great way to add value to your property, but not all of us have bottomless pockets for a full-on renovation. Lucky for us, there are plenty of affordable DIYs that can spruce things up over a free weekend.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK