select
|

Budget hacks for a smooth switch from renting to owning

Owning a home is a dream-come-true for many young people, but being a first-time buyer wrapped up in finding just the right property could mean that the thought of what it will cost to run and maintain that property hasn’t crossed your mind.

“While transitioning from renting to ownership is likely to give you the additional space you want, it will also give you a bigger property to manage and maintain, and you need to make provision for that so that you can enjoy your new home without being stressed about making ends meet every month” says says Gerhard Kotzé, MD of the RealNet estate agency group.

“So before you start thinking about what new furniture, appliances or even curtains you might need, you should try to establish what additional monthly costs you will face as a new homeowner.”

For example, he says, you should budget for a higher municipal bill, because electricity and water usage is likely to be higher than in your rented home and as a property owner, you will also now be liable to pay property rates.

“If your new home is in a secure complex or an estate, you will also need to budget for the monthly levy or home owner’s association fee – and bear in mind that this will increase annually.

“Alternatively, if you are moving from a complex to a suburban property, you may need to budget for things that were previously taken care of by the body corporate – such as security, garden upkeep, and even pool maintenance.”

In addition, says Kotzé, while you may previously have paid to insure your belongings, you will now also have to budget for home owner’s insurance (sometimes also called brick-and-mortar insurance) to ensure that if your home is damaged or destroyed in any kind of disaster, it can be repaired or rebuilt and you will not end up paying a bond on a property that no longer exists.

“And then you may also want to take out bond insurance, which is a kind of life insurance that will pay off your bond if you die so and ensure that your family is not at risk of losing their home.”

Other costs you need to anticipate, he suggests, include an amount for basic home maintenance and small improvements, especially if you are a DIY enthusiast.

“On top of that, it’s a really good idea to put a reasonable amount into a specific home savings account every month and build up a ‘reserve fund’ to cover emergency repairs that can otherwise leave a big hole in your budget, or to help pay for any major renovation or addition you want to make at a later stage.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 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
      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.
    • 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.
    • 18 May 2018
      The need for large office spaces is slowly eroding as more and more employers choose to allow their staff to work remotely. As a result, the home business model has grown in popularity, with many new entrepreneurs choosing to start their business from home rather than in a business district. But, what are the legal implications of operating a business in a residential area?
    • 18 May 2018
      Proxi Smart Services Pty Ltd, a company that deals with the day to day administration of property transfers while the conveyancer attorneys perform the legal side of transfers, lost its bid for the court to allow them to do business in this regard.
    • 17 May 2018
      If you’re a first time buyer, then you are probably only just beginning to realize how expensive furniture can be. That three-piece lounge suite you’ve had on your “Dream Home” inspiration board probably seems like nothing but an unrealistic fantasy to you now. But, a little bit of financial discipline mixed with a dash of smart shopping can go a long way towards helping you furnish your fantasy.
    • 17 May 2018
      In recent years the demand for sectional title apartments – both for rent and to purchase - in Rivonia, which is considered to be one of the most affluent residential and suburbs in Johannesburg, has been incredibly strong.
        
    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