Team Talk
Property Talk
By Marc van Heerden
For the Buyer
Being a first time property buyer can leave a person very overwhelmed and there is a crucial question
which is often overlooked before the usual questions; such as affordability, area and property features.
That question is;” Do I buy to live in or buy to invest?”
Often one tends to buy to live in as its generally top of the list on everyone’s financial agenda. This
makes logical sense; however there is a challenge if your income doesn’t allow for further credit from
banks and home mortgage originators.
If you ever get to speak to a successful property investor and were to be in position to ask, “How did
you do it?”…. Their answer will be something along the lines of these three letters...OPM. OPM simply
stands for Other Peoples Money. Now, how do you get other people to “buy “the property for you?....
If you would like to know more on this particular topic then I would recommend you give me a call and
set-up an appointment where I can explain the process.
If you decide that your circumstances don’t provide you with this option then I would recommend you
consider an alternative option. This option means that instead of purchasing an opulent home to the
maximum of your credit value, I would encourage you to purchase a smaller/more reasonably priced
home which may allow for a second property to be purchased as an investment property later on. You
would obviously tenant that property out (or both) should the financial need be there and allow it
grow in asset value by maintaining it. Remember that all repairs and upkeep can also allow for tax
benefits (Consult with your Tax Practitioner for more on this).
Handy Tips
Determine what your specific needs are—Live-in
or Invest
Get a good Realtor to assist you in the process
For the Seller
Renovations on a home are always a costly affair, but can add massive value a few years after having completed the
renovations.
One must remain cautious to over-invest in one’s property and a good benchmark is to visit your neighbours. That’s
right… make friends and visit them at their home. The reason being is that you can get a feel of what is being done
in your neighbourhood property wise and this will help you to determine if what you intend to do at your home
would be within the value criteria of the area.
Most people don’t know this, but your neighbours property will have a direct influence on the sale price of your
home. Property’s may increase significantly dependent on the offerings of the neighbourhood (eg such as schools,
access to road and travel routes, vistas and views, security etc). However, the most influential factor in your
properties value would be the look and feel of the neighbourhood. This is pretty much driven by how people
maintain their homes and whether they invest in “growing” their homes—either by adding on additional
outbuildings, entertainment areas, bedrooms, garages etc or by having finishes upgraded every few years.
The most desirable rooms requiring modern/upgraded finishes are the Kitchen and Bathrooms. The rest of the
house can generally have a fresh coat of paint, but these two are a must if you want premium for your home. What
would remain is to repair what may be broken and then you should pretty much be ready to go to market.
Building additions is currently a significant trend as budgets are tightening, so people build on that entertainment
area, that apartment for Gran or the additional Bedroom with En-suite Bathroom. People are doing this versus
buying a new home that has these features. One should be cautious to perform these alterations too close to the
time of sale as one often will not recover one’s financial investment if you were to sell within a 2-5 year window.
This is purely a guideline as it would be determined by the work that was completed.
It would prove to your benefit if you were to appreciate your hard work for one or two years before moving on to
another home. Invest wisely and you will reap the fruit. If you are uncertain, then call a Realtor to assist you.
For more advice on property options
and the due process of buying,
selling and investing…
Contact us on...
Marc van Heerden
Cell: 073 198 9369
Tel: 041 360 0365
[email protected]
www.sothebysrealty.co.za
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