Before buying your first home, you need to make sure that you are financially ready for the bond repayments and the hidden costs of owning a home.
We take a look at these costs.
Utility fees
As a homeowner, you are now responsible for paying utilities. Your local municipality will charge you for your electricity and water usage.
According to Numbeo, the average electricity cost in South Africa is around R1700 per month for an apartment. If you are moving into a larger townhouse or house, it will be best to prepare to pay double that and even more.
Start by implementing greener habits before you buy your new home. Ensuring you are already in 'electricity saving mode' when you move, will decrease your utility spend each month.
Rates, taxes, and levies
If you bought a freestanding property, you pay rates and taxes to your local municipality each month. This charge covers the services provided by your local municipality, such as sewerage facilities, roads maintenance, street light maintenance, and refuse collection.
If you bought a home in a community scheme, such as a sectional title unit, your body corporate charges you a levy. Levies are used to cover the running of the complex and include municipal rates and taxes, limited building insurance coverage, repairs, and maintenance.
Homeowner's Insurance
When you apply for a home loan, homeowner's insurance or building insurance is mandatory as it covers the property in the event of unforeseen damage or loss.
The monthly premium is dependent on the loan amount granted for your property.
As most financial institutions offer this insurance, it is advisable to shop around to find the coverage that suits your needs and pocket best.
Remember that homeowner's insurance does not cover the contents of your home. Additional insurance will be needed to cover the contents of your home.
Maintenance
As a homeowner, you are responsible for maintenance in and around your home. This is especially true if you are thinking about buying a freestanding home.
Sectional title properties have the added benefits of general maintenance being performed by the body corporate with additional services like garden care included in some cases.
However, maintenance largely still falls on the homeowner, and you will need to ensure that you budget for these costs.
