Factors such as security, travelling time and
costs, access to main arterials and facilities such as
shopping, medical care and schools will all play a role
when selecting the area, he says. The type of property
will depend on how much free time you have for
garden maintenance for example. A convenient lockup-and-go apartment or townhouse, perhaps in a
complex with communal gardens and a swimming
pool may be a better choice.
On the other hand, you can generally pick up
good value and more space by buying an older
home, but it will likely require renovation. Guard
against potential over-capitalising by keeping
improvements and costs in line with the potential
capital growth gains.
The global economic crisis has highlighted the
need for deposits as this creates a vital equity buffer
against financial difficulty or should you need to
sell for whatever reason, he says. Although the
average deposit requirement is between 10% and
15%, it is recommended that you aim for 20%. Bond
originators such as ooba work with the major banks
and assist buyers with multiple applications and
interest rate negotiations.
“Know what you are buying.
Inspect the property carefully
before putting pen to paper”
Deciding whether to fix or float your interest rate
depends on your financial preference. A fixed rate
will be higher than the prevailing rate, but creates
a buffer against future hikes. A floating rate though
could provide significant savings in the short term.
Speak to a financial expert before making the final
decision, he says.
The rule of thumb is that it takes about five years
before you will start seeing a reduction of the capital
amount borrowed. It is also recommended that you
invest any spare cash in your bond as this will result
in significant interest rate savings. Aim to pay your
home loan off as soon as you can as this will create
security and stability in the long term.
Know what you are buying. Inspect the property
carefully before putting pen to paper, he says. Check
aspects such as building, electrical and plumbing
compliance, damp and leakages and the swimming
pool and roof structure. Negotiate repairs as part of
the suspensive conditions of the offer to purchase.
www.reimag.co.za
Property is one of the best investments and there is
no price that can be put on owning the roof over your
head, but it is one of the biggest decisions you will
ever make and it should not be undertaken lightly.
Take the time to research your options and costs
thoroughly and ensure you buy the right property at
the right price that suit your needs and fit with your
financial position.
RESOURCES
Samuel Seeff, Seeff Properties
Residential Handbook 2014
9