Friday, August 29, 2014
While taking the step from renting to buying is exciting, it is a major financial commitment that should not be entered into without the proper consideration.
This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa, who says there are a number of essential aspects that should be carefully measured beforehand to ensure that the buyer is making the right decision and is buying a property that meets their needs both now and in the future.
“Buying a home is not a decision that will only affect the buyer’s financial well-being now - it will have ramifications in the future as well. That is why it is so important for a buyer to make an informed decision based on their life plans and what their criteria are at the moment and how their plans and needs could change over the next five to ten years.
“Making a rushed decision and buying a home that will not fit into your future plans could end up costing a lot more money in the long run. Property should be viewed as a long-term investment and, as such, decisions regarding property should be made with future goals and plans in sight,” says Goslett.
He says before a buyer goes out looking for a property, they need to sit down and decide what features they currently need in a home and what features they may need in the future. Some things to consider would be the number of bedrooms and bathrooms, the need for a garden or the number or type of parking facilities. There may also be special criteria such as energy-efficient features, a swimming pool and fireplace or wheel-chair accessibility.
No matter what type of housing a buyer chooses, they must have a clear idea of their needs today as well as their possible future needs. These are some examples of questions home buyers might ask:
- Do I need a home office?
- Do I plan to have children?
- Do I have children who will be moving out soon?
- Am I close to retirement?
- Will I need a home that can accommodate different life stages?
- Do I have an older relative who might come to live with me?
Goslett says every buyer will have their own unique requirements based on their life stage and what they have planned for the future. For example, for buyers planning to have children, proximity to good schools could be a priority, while older buyers facing retirement might want something further away from the hustle and bustle.
When looking to buy a home that fits in with future plans there may be certain financial restrictions due to the buyer’s level of affordability, so there could be aspects that the buyer might need to compromise on.
“If the buyers are a young couple with future plans of having a family, they may want a three bedroom home to have the space they would need to grow. However, if their budget only allows them to purchase a two bedroom home, they could try and find a property with the space to build on and add the extra room at a later stage. While the home may not currently meet all the requirements immediately, it is important to find a home that can grow and change with your needs,” he says.
Regardless of the type of home the buyer decides on buying, sustainability is a key issue to homeownership. “Buyers need to ensure that they can afford and sustain the necessary financial obligation before making the commitment. To precisely assess this, a buyer can use the resources available to them such as financial advisers, banks and bond origination companies. This will give the buyer estimated repayment figures based on bond requirements,” says Goslett.
It is important to remember that it is not just the bond repayments that should be taken into consideration as there are other costs involved in a property transaction and homeownership. These costs can add up to a relatively large amount and it is essential to include these when assessing affordability.
Another essential aspect to consider is location, he says. A property that has everything the buyer needs but is situated in the wrong location is probably not going to be the right property to buy. “Location is a key influencer when it comes to a home’s future investment potential. It is far better to compromise on the features of the home than on where it is located,” advises Goslett.
When looking at an area, buyers should consider the general upkeep along with proximity to amenities such as schools, medical facilities and shopping centres.
He says buyers who purchase a property in the right location that meets both their short- and long-term needs will be able to enjoy the benefits of an accommodating home that grows in value over time.