How to get into property ownership
There are great benefits to owning one’s own home, rather than renting and paying off someone else’s bond.
Attorney Realtor Hub founding member and director of MDW Inc. Meyer de Waal, is on a mission to promote home ownership and through partnering with key organisations has established a way for buyers to ease the way into home ownership.
Purchasing a home will most likely be the biggest investment decision anyone will ever make and it’s a decision that comes with specific financial obligations.
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However, says de Waal, once you appreciate the benefits of home ownership, you will no longer see obligations such as repaying your loan or maintaining your home as a burden, but as a route to investing in your and your family’s future!
The key benefits to owning one’s own home are that:
In the medium to long term, costs related to homeownership will be lower than that of a rental unit.
The home’s value will in most instances grow over time.
It provides independence and comfort for the whole family.
If the monthly payments related to two identical homes in the same area are compared, the first being a rental property, the other a home purchased with a loan, it is clear that if the person chooses to rent, the monthly rental will in most instances increase every year.
The increases will often be in line with inflation, or slightly higher. The home loan installment will in the beginning be more than a rental payment and might, every now and again, increase or decrease as interest rates go up and down, but in the medium to long term a person will generally be paying far less per month should they purchase a home and not rent.
Another key financial benefit of owning one’s own home is that property prices have on average shown an increase in the market value over a medium to long term. According to a recent Lightstone report, national home values have increased by an average of 4% year on year whereas certain key areas, such as the Western Cape have outstripped other areas, increasing in value by 10.5% year on year.
Even if a person is not planning to sell, lenders will more easily grant an additional loan if there is home equity value. This could mean that extra finance might be available to fund children’s education or another expenditure such as start-up costs for a small business.
Rent to Buy – this option is for those who would like to own a home sooner rather than later, but are not quite able to qualify for the full amount they need to purchase. They can then purchase the home via the Rent to Buy finance company, rent from them for a period of up to 24 months, and then take transfer (by which time they should have their credit profiles rehabilitated and should be ready to take transfer).
This home ownership educational material has been made available to a leading property group with a tenant database of over 11 000 tenants, to inform and educate them on how to own their own home. This has also been given to more than 3 700 staff members of African Bank, to provide similar information and education which also includes how to get out of debt, improve affordability, access to housing subsidies made available by the Government (FLISP) and much more.
To date just over 8 700 subscribers to the My Bond Fitness platform and 2 800 subscribers to the Rent2buy Finance services have also had access to these online educational guides.
Readers interested in getting their own free E Guide – The A- Z Guide how to buy your own home as well as a free credit report can go to: https://arhmp.mybondfitness.co.za.
What about other benefits?
De Waal says, Owning your home will give you the freedom to decorate and repaint your home in a style that suits you. Every rand that you spend on improvements benefits you as it improves the value of your investment.
Perhaps you are ready to settle down in your community, and want the feeling of permanence and involvement that comes with owning your own home.
A home of your own also provides a place of comfort for you and your family and gives you the flexibility to adapt your living space to your individual tastes and needs.
Now that you understand the significant benefits of home ownership, you will see that getting financially fit is not a burden, but rather the first step to financial well-being and peace of mind.
To assist those who would like to get onto the property ownership ladder, there are 2 helpful services, provided via the Attorney Realtor Hub:
1. My Bond Fitness – this coaches those who would like to assess whether they will get the home loan they need and will guide them through the process of fixing their credit worthiness if there are problems.
2. Rent to Buy – this option is for those who would like to own a home sooner rather than later, but are not quite able to qualify for the full amount they need to purchase. They can then “purchase” the home via the Rent to Buy finance company, rent from them for a period of up to 24 months, and then take transfer (by which time they should have their credit profiles rehabilitated and should be ready to take transfer).
Author: Meyer de Waal