Flats and townhouses best for first-timers

“But if you’re keen to get a good foothold in the market, you might actually be better off buying a flat or a townhouse in a good area now and just moving to a bigger property when you need more space,” says Jan Davel, MD of the RealNet estate agency group.

Zoning restrictions, he points out, can play havoc with any plans to extend a smaller house by building up or out, especially in areas where stand sizes are generally small and expanded homes could easily overshadow or crowd out their neighbours.

“And even in areas where such restrictions are not a factor, you need to consider how a major home improvement might affect the resale potential of your property. By rebuilding or expanding a home far beyond the scope of surrounding properties and the overall character of the neighbourhood you could very easily create a white elephant.

“In other words, it will be too expensive for most of the potential homebuyers looking in that lower-cost area, but fail to attract the wealthier homebuyers who could possibly afford it because it is in the wrong area for them, and you or even your heirs will be stuck with it.”

This is why, he says, RealNet advises young and inexperienced buyers to rather spend their money on buying an apartment or townhouse in the best area they can afford that is close to work, and focus on paying off their home loans as fast as possible in order to build up equity as well as value growth in their property.

“The advantages of doing this are many. In the first place, you will generally get more home for your money and/ or be able to live in a better area, because if you buy a pre-owned flat or townhouse for up to R600 000, you will pay neither VAT nor transfer duty.

“Secondly, living close to work means you’ll save on commuting time and transport costs, so should be able to pay your bond off faster and also be much less at risk of losing your home if interest rates go up – which is always a concern for first-time buyers on a tight budget.

“And third, living in a well-run sectional title complex where the owners all pay their levies should relieve you of many home maintenance tasks and worries – and more importantly, help protect the value of your unit, so that it is easier to sell and attracts a higher price when you are ready to move somewhere bigger.”

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