Key Questions Every First-Time Home Buyer Should Answer
Renting offers tenants the flexibility of living in a home that meets their short-term needs, while owning a property is a far larger commitment that requires more careful consideration.
This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who points that the potential buyers need do their research before taking the first step towards property ownership.
He adds that, while there is a multitude of things to consider before buying a home, there are five key questions every first-time buyer should answer before embarking on their homeownership journey.
Here they are:
Is there room for growth?
Ideally, property should be viewed as a medium to long-term investment.
On average it takes between seven and ten years for buyers to start seeing a return on their investment, so they need to ensure that the property they purchase meets their needs for at least that time frame.
“Does the property have the potential to grow with your developing needs? Over the space of five to ten years a lot can happen, so, if possible, it is best to try and find a home that can accommodate the possible changes. It won’t be an exact science as your five-year plan may not pan out as expected, but it is a good idea to consider the possible life changes that could occur and impact your need for an extra room or additional space,” says Goslett.
Growth of your family is not the only kind of growth that should be taken into account. Buying property is an investment, so it makes sense to ensure that the property has the potential for growth in value too.
According to Goslett, location is the single biggest influence on a home’s appreciation potential – so buy in the best area you can afford.
“Also, research area statistics to ensure that you are buying the property at fair market value. Doing these things will ensure that you can be fairly certain that your investment will see capital appreciation over the long term,” he adds.
Get back to the basics
The first home you buy might not have an array of luxury features, but it is important to make sure that all the basics are in good condition.
“Most buyers base their decision on emotion, but is best to have all the facts about the property before you commit. Have the property inspected thoroughly to ensure that there are no hidden defects that could be costly to repair,” advices Goslett.
There is a lifespan to everything
Certain features may be in a good condition now but could require repair or replacement in the near future.
Everything has a lifespan and may require repairs at some stage, so look at the condition of features such as the roof and flooring. How long will it be until these aspects need to be replaced?
Researching the expected remaining life on large-ticket items can help you plan for the future.
It’s not about perfect – it’s about right
Your first home might not be in perfect condition, but it’s important to make sure that it is the right home for you.
“When looking for a home have a list with three columns – must-haves, nice-to-haves and negotiables. The must-haves will be the features that you can’t live without, while all other items will add to the home but will not be essential. A lock-up garage is a nice-to-have, but not if it means sacrificing an additional room or larger garden for example. The priority of each of aspect will be determined by your unique tastes and criteria,” says Goslett.
Consider all the costs
It is not just the bond repayment that needs to be budgeted for and considered. There are other recurring monthly costs involved in owning and maintaining a home.
It is vital to choose a property that fits your budget when all costs are taken into consideration.
Things to think about include utilities, rate and taxes, insurance and maintenance costs. These are not costs that are considered by the bank when approving finance, so it is important to calculate these costs with an experienced real estate agent or a financial adviser.
“To ensure that the correct decision is made, which will result in a return on investment and more importantly your happiness, take the time to weigh up all the options available to you,” Goslett concludes
This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who points that the potential buyers need do their research before taking the first step towards property ownership.
He adds that, while there is a multitude of things to consider before buying a home, there are five key questions every first-time buyer should answer before embarking on their homeownership journey.
Here they are:
Is there room for growth?
Ideally, property should be viewed as a medium to long-term investment.
On average it takes between seven and ten years for buyers to start seeing a return on their investment, so they need to ensure that the property they purchase meets their needs for at least that time frame.
“Does the property have the potential to grow with your developing needs? Over the space of five to ten years a lot can happen, so, if possible, it is best to try and find a home that can accommodate the possible changes. It won’t be an exact science as your five-year plan may not pan out as expected, but it is a good idea to consider the possible life changes that could occur and impact your need for an extra room or additional space,” says Goslett.
Growth of your family is not the only kind of growth that should be taken into account. Buying property is an investment, so it makes sense to ensure that the property has the potential for growth in value too.
According to Goslett, location is the single biggest influence on a home’s appreciation potential – so buy in the best area you can afford.
“Also, research area statistics to ensure that you are buying the property at fair market value. Doing these things will ensure that you can be fairly certain that your investment will see capital appreciation over the long term,” he adds.
Get back to the basics
The first home you buy might not have an array of luxury features, but it is important to make sure that all the basics are in good condition.
“Most buyers base their decision on emotion, but is best to have all the facts about the property before you commit. Have the property inspected thoroughly to ensure that there are no hidden defects that could be costly to repair,” advices Goslett.
There is a lifespan to everything
Certain features may be in a good condition now but could require repair or replacement in the near future.
Everything has a lifespan and may require repairs at some stage, so look at the condition of features such as the roof and flooring. How long will it be until these aspects need to be replaced?
Researching the expected remaining life on large-ticket items can help you plan for the future.
It’s not about perfect – it’s about right
Your first home might not be in perfect condition, but it’s important to make sure that it is the right home for you.
“When looking for a home have a list with three columns – must-haves, nice-to-haves and negotiables. The must-haves will be the features that you can’t live without, while all other items will add to the home but will not be essential. A lock-up garage is a nice-to-have, but not if it means sacrificing an additional room or larger garden for example. The priority of each of aspect will be determined by your unique tastes and criteria,” says Goslett.
Consider all the costs
It is not just the bond repayment that needs to be budgeted for and considered. There are other recurring monthly costs involved in owning and maintaining a home.
It is vital to choose a property that fits your budget when all costs are taken into consideration.
Things to think about include utilities, rate and taxes, insurance and maintenance costs. These are not costs that are considered by the bank when approving finance, so it is important to calculate these costs with an experienced real estate agent or a financial adviser.
“To ensure that the correct decision is made, which will result in a return on investment and more importantly your happiness, take the time to weigh up all the options available to you,” Goslett concludes
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