Many people believe that now is a good time to invest in property due to the low interest rates. Gaye de Villiers of Pam Golding Properties says, "the South African residential property market is now in its sixth successive year of growth. This is the highest level of resilience and stability experienced in 20 years. All the fundamentals are in place for the market to continue on this growth path."
She believes that it is never too early to invest in residential property: "Any person who has the money – whether by way of an inheritance or other means – would do well to fight off the temptation to buy fancy wheels or other popular trappings and, instead, invest in property."
Plan ahead
If you're buying a property as an investment, avoid poor planning. De Villiers advises you to avoid the burden of a bond repayment that is more than you can rent the property out for. You should also try to pay off the bond at a faster rate than necessary so that you can build up a cushion of, say three years, to help you ride out any problem periods.
You will have to pay transfer costs and other legal fees - take these into consideration. Interest rates fluctuate so make sure that you will still be able to afford the bond repayment even if the rate increases.
De Villiers cautions against making rash or impulsive decisions when investing: "Do your homework. Investigate the market and the area. Ask questions."
Don't be afraid to ask
If you are viewing a home for sale you need to ask loads of questions. Try to look past the cute garden and lovely bathroom and examine the property closely. Remember, you are entitled to get professionals to assess the condition of the house. Don't forget to ask about the roads and highways close to the house to ensure that you are aware of noise levels in the neighbourhood.
By asking a few basic questions when buying property you will have recourse through the voetstoots clause, should the seller answer them untruthfully. These questions include:
Sectional title
The money game
Major banks and other financial institutions offer special deals and 100% bonds to first-time home buyers. Certain conditions apply, such as a minimum income, and many of the packages are structured to include the finances for transfer fees and other costs. Investigate all the options and shop around for the best interest rate, which will not necessarily be at your own bank.
Image: Neville Lockhart/Woman's Value