How to decide what type of property you'd like to buy, and which features will best suit you.
Presenter: Well, good morning and welcome back if you've just tuned in. And we continue our first-time home buyer's journey. Now, yesterday, we looked at making the decision of what neighbourhood or area you would like to see yourself living in, which would bring with it the lifestyle you desire. Now, it's time for you to decide the type of property you are after and what features you want.
Previously, I looked at which neighbourhood would best suit me and my lifestyle. There's so many different types of properties to choose from, and today I find out which one best suits me. For first time buyers, it's important to understand that there are various kinds of property investments. These different kinds of property offer flexibility and greater stability based on your financial situation and needs.
Lisa, I'm looking to buy my very first property, what types of properties are available for one to buy?
Lisa Boniface: Brett, there's various types of properties that you can buy. The most common types are your freehold properties, your sectional title properties, and your share block properties.
And the pros and cons of each of those?
Lisa Boniface: With your freehold properties, naturally, you'd get your freedom, you'd get your privacy, there's not other people on top of you, you can make your own decisions. But with that, the security is a disadvantage. The levies at least cover all your upkeep for the common properties, and that's shared with other owners in the block. The biggest advantage of your sectional scheme is the security aspect, which every owner shares in the cost of. Fortunately, you don't get that with your freehold properties. You would be responsible for all the security, and it's not really a lock-up-and-go situation. The main advantage of living on a freehold property is the freedom and independence that you get.
Lisa Boniface: So, you don't have to wait for body corporate authorization if you're going to renovate the property. You don't have to wait for them to consent to a party on a Friday night. So, it really just is a massive advantage having your own space and making your own decisions.
Lisa Boniface: With share block property, owners get shares in the company that owns the property, which entitles them to use and take occupation of a unit - as in a block of offices. An estate is an example of sectional title property, where owners have a piece of land and a building but pay levies to care for the common property. Freehold is another property option. The property is freestanding, where the owner can make use of the land and buildings as they please.
As a first-time buyer, what entities can one purchase in?
Lisa Boniface: There's so many options nowadays. You can buy it in your individual name, you can buy it in the name of a trust, you can buy it in the name of a CC or a company. Because this is your first home, it's probably going to be your primary residence, so we always are of the opinion that buying your first property, that you're going to be living in, must always be done in your individual capacity.
Lisa, what are your top tips for a first-time buyer?
Lisa Boniface: Being a first-time buyer - always be prepared. One of the things that I think comes as a huge surprise to any first-time buyer is the cost involved with these transactions. The buyer will deal with two attorneys: the transferring attorney and the bond registration attorney. Not only do we need to pay the transferring attorney and the bond registration attorney, but we also need to pay [inaudible] transfer duty, and municipal rates figures. So, I think when people are buying for the first time, they don't realize how much liquid cash they actually need available. So, that would definitely be the top tip from me. The second thing would be know exactly what you are buying. So, please make sure you go into every room, you ask all the right questions, collect all the necessary information before signing that offer to purchase.
How long can this whole process take?
Lisa Boniface: It really depends on the contractual obligations, as well as the cooperation of the parties. But it can generally take anything up to eight weeks for a transfer to go through. We need 6 to 10 days at the deeds office as well, so that needs to be factored in.
To start the journey to buying your dream property, visit www.privateproperty.co.za, where you can find loads of helpful information and amazing listings to make your purchase easier and even more rewarding.
Whether it's your first apartment in the city, a trendy suburban townhouse, or that dream family home on a golf estate, there's a home for everyone on Private Property.