FINDING
FINDING
Demystifying renting versus buying property
Make a choice that is right for you
BY MARTINA NICHOLSON
Many young South Africans are unsure as to whether they should buy that first home or continue to rent . This is not surprising as purchasing a home is a considerable commitment and one of the most important financial decisions they are likely to make .
According to Rupert Finnemore , managing director of the Pam Golding Properties Gauteng region , there are pros and cons to both renting and buying a home , and individuals will need to take their personal circumstances into account when making a decision .
A good time to purchase ? “ We are often asked whether it is a good time to purchase residential property , particularly as the current national economic climate is fairly subdued . House price growth has plateaued somewhat and buyers can obtain quality homes at more affordable prices in some areas ,” notes Finnemore .
Finnemore cautions , however , against speaking in overly sweeping terms about individual regions within Gauteng , which are showing strong differences in terms of the strength of their residential property markets . “ Pam Golding Properties is finding that many residential areas around the province are still in high demand while other local markets are more subdued . Like the national property market , regional and suburban markets are highly distinctive and tend to ebb and flow .”
The importance of location Finnemore is of the view that now is a good time for those who are in a position to purchase a residential property to enter the property market , particularly as homes representing value for money are currently
available if the homeseeker takes the time to do his or her homework . However , he says the location of any home is as critical as ever .
“ It is important to purchase a property in an area where homes have historically held their values well . A trusted property advisor will be able to assist you in establishing this . If you have limited funds , consider purchasing a smaller property , such as an apartment or townhouse , in a good area , rather than a large property in a suburb in which homes may not hold their value well into the future .
“ Investigate whether the suburb is popular and whether it has easy access to facilities and schools . Critically , consider whether the property is secure , as this is always an important factor not only for you and your family , but also potentially to the future value of your property . Your home is less likely to be attractive to buyers or renters if they consider it to be insecure .”
Gaining an asset Finnemore points out that while it may cost a little more to pay off a bond every month than it does to rent a property , and you will need to pay transfer fees and other costs , it is important to remember that by purchasing a home you gaining a considerable asset . If carefully chosen , your property will almost certainly appreciate in value over time . If you rent , on the other hand , you effectively fund your landlord ’ s asset , who may use it to pay his or her bond and potentially make a tidy profit . In addition , in many areas renting is becoming expensive .
Jason Shaw , national sales executive at Pam Golding Properties , agrees pointing out that once you own a property you have gained a footing in the property
12 Residential Handbook 2016 / 17 www . reimag . co . za