Record low interest rates have pushed a steady stream of first-time buyers into the property market, either moving from rental properties or simply leaving their family home. Those similarly hoping to move out of home for the first time have multiple aspects to consider before deciding if they are ready to take the plunge.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett explains that one of the most important ways for buyers to know that they are ready is to examine their financial position. “Before a first-time buyer can even begin the process, they need to find out what they can qualify for on a home loan. Buyers can do this through bond origination companies such as BetterBond.”
Thereafter, Goslett explains that buyers will need to calculate all the ongoing costs around homeownership. “There are so many expenses that are likely to be new to buyers who are moving out of home for the first time. Not only will these buyers need to be able to afford the monthly bond repayments along with the corresponding rates, taxes, levies (if they stay in a complex or residential estate) and municipal bills (things like waste removal, water, and electricity), but they will also need to factor in the costs of things like the monthly grocery bill, the internet connection and/or DSTV subscription, as well as home and household contents insurance and other similar expenses,” Goslett lists.
Once buyers have their finances in order and all related expenses correctly budgeted for, buyers can move onto more practical considerations, like if they are ready to commit to a home for the next ten to twenty years. “Buyers need to view real estate as a medium- to long-term investment. It is not a ‘get rich quick’ scheme. Buyers need to decide if they are ready to live in a home for at the very least five to ten years if they want to ensure a return on their investment,” he advises.
Though buyers might not yet have children, they may want to consider searching for homes in suburbs near good school districts. They should also consider their commute to work and where they might want to be situated five years from now. While this might seem like a difficult thing for young buyers to conceive, Goslett recommends that the home can always be rented out if the buyers’ situation changes and the property no longer suits their needs.
There is a lot to consider before buyers can feel ready for homeownership and, though this may cause many to put off the house-hunting process for much longer than necessary, Goslett explains that the sooner they can enter the market, the better it will be for them in the long term.
“Real estate is an appreciating asset that can provide much-needed financial security to those who make smart purchasing decisions. I would advise buyers not to let the process overwhelm them. Instead, reach out to a qualified real estate professional who can guide them through the process. This interaction could help buyers become better informed and could even help them learn that they’re much closer to being ready to own a home than they might otherwise have realised,” Goslett concludes.