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
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
        
    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