This archive report was first published on 29 August 2019.
Buying a home can be a daunting task, but with the right knowledge, it can be a rewarding experience. In this article, we will share some valuable lessons learned from our experience of buying a home.
Location is key when it comes to buying a home. It's essential to consider the proximity to social amenities, security of the area, distance to your place of work or business, and traffic conditions. These factors can significantly impact your daily routine. Additionally, if you're buying an apartment, consider the floor it's on, whether there are stairs or a lift, and the spaciousness of the rooms. Is there sufficient parking space? Is it a gated community or a standalone house? Is the property in an area prone to flooding? How is the water supply and sewerage system? What is the quality of the materials used in construction?
Another crucial aspect to consider is the return on investment. Calculate your expenses and profits beforehand. If you're repaying a loan or mortgage, is the income from the house or the opportunity cost if you're living in the home more than the expenses of repaying the mortgage or loan? If the expenses are higher, you can opt for a cheaper mortgage or loan. If the house is appreciating fast, you can sell it after a few years at a profit. If you're planning on renting it out, what's the demand like? How is the population of the area and the availability of houses in the area and prices they are being rented out for?
It's also essential to budget for 25 per cent more than the value you're buying the house. A lot of additional expenses are involved when purchasing a property, including stamp duty, legal fees, land rent and rates, valuation costs, mortgage processing fees, insurance fees, cost of incorporation of the management company, and advance service charge, among others. Sometimes the property might not have all the fixtures and fittings or you might want to customise them.
Do your research and work with a professional to conduct a title search. This will help you find out the legal owner, whether the land is in a restricted area, if the title has been charged (attached to another loan), if it has a caveat or if there are any outstanding land rates. Is the property already built or is a proposed development? If you're taking a mortgage, some financiers only finance up to a certain percentage if the development is off-plan. Are there any legal implications to the constructing company if the project is not completed on time? You do not want to pay for a house and it takes 10 years to complete or, worse, stalls. If you wish to sell the property quickly how fast can you get a buyer? Also find out what documentation will be transferred to you upon purchase and how long it will take.
As a Marketing and Communications professional at ABC Bank, I have learned that buying a home requires careful consideration of various factors. By doing your research and working with a professional, you can avoid costly mistakes and make an informed decision.
