select
|

Consider the ‘option to buy’ option

There are several good reasons to pay a deposit when you buy a home, among them the fact that you will have a smaller bond repayment to make each month and that you will save a mint in interest over the life of your home loan.

However, with property prices and interest rates at their current lows, many buyers who feel they can comfortably afford a monthly loan instalment really don’t want to wait until they have saved up a deposit before getting into the market.

So what should they do, especially when most banks are still very sticky about granting 100% bonds?

“Well, one answer is to rent a home now from an owner who is prepared to give you an option to buy it later at a pre-agreed price,“ says Berry Everitt, MD of the Chas Everitt International property group.

“And this is not so unlikely as it sounds. Remember, many homeowners are only renting out their properties at the moment because they have not been able to sell, and there are those who would be very happy to have the prospect of a sale at the end of a lease, and rental income in the meanwhile from financially-sound tenants who also have an incentive to keep the property in good repair because it is going to become their own.”

Writing in the Property Signposts newsletter, he says te advantage of such an arrangement for the prospective buyer/ tenant is that the contract will usually provide for him/ her to buy the property at a pre-agreed price at the end of the lease or sooner – thus fixing the price while allowing sufficient time to save up a deposit.

“In addition, landlords looking forward to a sale at the end of the lease period might charge a lower rental or perhaps even allow a portion of the monthly rent to be offset against the agreed purchase price, providing the tenant with a ‘readymade’ deposit at the end of the lease as long as he/ she goes through with the purchase.”

ISSUED BY CHAS EVERITT INTERNATIONAL


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
        
    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