So, you are thinking of buying a property

To put it out there, I am a firm believer in buying property, as opposed to renting.

The salient factors, which sway me in favour of property ownership are 2 key points.

• Personal wealth
• Return on Investment (ROI)

Renting a house provides the advantage of being less expensive in the short term, being able to relocate on a whim and offers the opportunity of living in a more affluent neighbourhood. Maintenance of the house is the responsibility of the property owner and one’s income may be better spent on ‘other stuff’. And if the tenant has the good fortune of necessary maintenance being done timeously, the above makes pretty strong points in favour of renting, right?

Investing in property however means that moving on to a new location usually means moving with a profit i.e. when selling for whatever reason. Buying up? The profits from the first sale provides the deposit to buy into the neighbourhood, which you initially had to sacrifice moving to. If you are buying down, it is extra cash in your back pocket to dispose of, or invest, as you wish. 

The perceived noose of property maintenance is offset by the freedom of homeownership, which eliminates the restriction of adapting your home, your haven, to your lifestyle. 

There are real risks involved with investing in property, as with any other investment. Heaven forbid that when the time comes to sell that the reality is your haven aka your investment has no resell value. Convincing a property owner in this scenario that they should perceive that high monthly home loan instalment as the monthly rent that they would have paid? Well, that simply does not wash with me. Much as the cute cottage with the clichéd white-picket-fence grabbed your fancy in the ad, it is absolutely imperative that you conclude a sale after comparative house hunting. Estate agents are not tour guides. They are specialists with a wealth of knowledge, usually specific to their farm, which is the term used for the area that they specialise in. Ask as many questions as you need to before committing to a contract.

Home owners take on the responsibility of servicing a bond repayment, the upkeep of the property, insurance and rates and taxes. These obligatory expenses need to be factored into affordability. And not only in the current market but also taking into account affordability in the world of What If? Can you afford the repayments if the interest rate goes up? Or will your finances be flung into chaos if you find yourself in the crunch of an unexpected crisis? Mortgage bond originators are able to assist you with establishing the loan amount that you qualify for, and your affordability. Consultants work with the major banks and are up to date regarding the criteria of the various financial institutions. The service offered by real estate professionals and home loan consultants are free.

It makes sense to partner with a practitioner when considering taking the leap towards your long-term investment.