Real Estate Investor Magazine South Africa November 2019 | Page 24

GETTING STARTED
Finding your first
property
Acquiring a home versus an
investment opportunity
JEAN BROWN
Download
First-Time
Homebuyers’
Guide
L
ooking for a property to live in and finding your first
investment property doesn’t involve the same process
or mindset. A first-time homebuyer will have different
property requirements to those of a first-time property in-
vestor.
Buying a home is a lifestyle decision very much based on
you and your family’s long-term needs. Unless you have a
flatlet or room on the property you plan to rent out, a home
purchase won’t necessarily be an income generator either. An
investment purchase, however, is a calculated decision around
generating passive income streams through various buy-to-
let, multi-let, buy-to-flip or development strategies.
Know what you want from your first home
Be sure to have a clear idea of what you need from your first
property purchase. Standard selection criteria include: number
of bedrooms, bathrooms and off-street parking bays, erf size,
and if the building is in a sectional title scheme or not.
First-time home buyers should take a long view on their
property purchase (about five to 10 years) to ascertain if
the property will cater to their changing needs over time.
Are you requiring a house with potential to add rooms to
accommodate a growing family? Is there space to add an extra
bathroom? At the end of the day will you be getting enough
‘bang for your buck’?
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NOVEMBER/DECEMBER 2019 SA Real Estate Investor Magazine
Additional homework is needed to identify obstacles
preventing you from developing a property as you plan to.
According to Raazik Nordien of UF Architects, this includes
Title Deeds (for potential restrictive clauses), Heritage (which
can stop or delay developments) and any Municipal by-laws or
Building regulations that may apply.
Finding your first home
Consider the cost implications involved in a purchase
According to Standard Bank, there are certain costs
associated with buying a home that you need to consider
when to buy a property. You’ll need to:
Examine the transfer and legal costs involved;
Consider municipal rates, taxes and sectional title
levies in your ‘affordability’ calculations;
Assess the cost of moving households;
Consider the implications of making physical
changes to a new home;
Work in the cost for buying furniture and fittings for
a new home;
Compare the maintenance costs of established
homes in the suburbs versus higher density
townhouse complexes;
Weigh the advantages of buying a newly built
home or an old existing home
At the end of the day, your budget will determine your
bond size and the type, size, and location of the home you
eventually purchase.