Budget before you choose a home, buyers advised
Lower interest rates and the availability of 100% bonds once again are bringing first-time buyers back into the real estate market.
And this bodes very well for market recovery, says Martin Schultheiss, CEO of the Harcourts Africa real estate group. However, if this is to gain momentum, these buyers must be advised to budget carefully for the ongoing costs of homeownership as well as the monthly repayments on the property they choose.
“In the excitement of house hunting and being granted a mortgage it is easy to lose sight of the costs of furnishing and running and maintaining a property,” he cautions.
“Apart from associated purchase costs such as bond registration fees and conveyancing costs - which reputable estate agents will calculate and point out to first-time buyers - there are a myriad other costs that should be taken into account before deciding on a particular property.
“First of all, there are relocation costs, once-off costs to connect municipal services and monthly costs such as property rates and insurance. It is also highly likely that electricity consumption will be higher in a bigger property and with several hikes in electricity prices looming, it is essential that new buyers budget for this expense, or perhaps decide to look at smaller homes.
“Bigger homes will probably also require extra furniture and even if buyers on a tight budget scour second-hand dealers, costs can quickly mount.”
Schultheiss says that once buyers are ensconced in the new property, the reality of other expenses will also soon become evident. This includes maintenance such as gardening services - or possibly the purchase of equipment and tools if the new owners choose to do their own gardening.
“Arguably more important, though, is maintenance of the home itself. Regular maintenance is not just an incidental option, because deferred maintenance can quickly lead to more severe problems that will put a heavy strain on finances. For instance, a roof that springs a leak can cause sagging ceilings and even structural damage to walls, which will cost a lot more to fix in the long run.”
He also cautions new owners to not to succumb too quickly to any urges to start renovating or extending their new homes. “One of the benefits of being a property owner is that you can change things to suit your lifestyle, but careful planning and budgeting is essential if you want to keep your finances healthy so that you can really enjoy being a homeowner.”
ISSUED BY HARCOURTS AFRICA