By Nico Strydom
Buying a house for the first time can be a frightful experience. It takes a lot of work and planning to find a house in the right area, with enough space and at a specific price that fits your needs, and then there is the investment factor too.
“Perhaps you don’t think of your new house as an investment,” says Karmen Wessels, from the online insurance platform Sanlam Indie. This is your first home and you want to live there for ever. This is where you will raise your children, where you are going to entertain your friends, and where you are going to grow old. So why should you think of your house in terms of money you can earn if you don’t intend to ever sell it?”
Things change, however. “It may not seem possible now, but you could perhaps be made an irresistible offer in some other country or perhaps your children are admitted to a school in another suburb.” This means you should not see your house as a house only but also work on it to make it a great asset.
If you are a first-home owner the chances are good that you are younger than 40. “This could mean that you may be a bit restricted in terms of what you can afford to buy. As your finances and lifestyle needs change and grow, so your house must grow too. Therefore, change the way in which you think of this place because you may later want to sell it to fit in with your lifestyle.”
Location, location, location. Wessels advises potential home owners to really consider that location is very important. “The worst place in the best location still has the potential of becoming a sound investment and if you pay less for it you will have more money left over for improvements.”
According to Wessels it important to think carefully about the alterations you make. “Do research to find a timeless appearance.” If you have doubts, rather keep to neutral colours that will age well and will make future investors excited rather than put them off.
Should you want to lease your house some time in the future, it is important to consider the type of tenant you would want to attract. AirBnB is an excellent way of earning money fast, but if for instance you live in a complex you will have to confirm that the body corporate will allow it. Find out whether short-term leasing is possible and whether your house and environment are attractive enough for a long-term lessee. When you buy a house you must also see how far it is from facilities, schools, religious buildings and tourist attractions because this can also determine whether you will be able to let your house successfully.
There are also many ways to make your house work for you while you live there. You can start a home business and recover part of your expenditure from taxes, you can lease out rooms or storage space or start a vegetable garden and sell products to the community. “It only takes a little bit of creativity and to really look carefully at what opportunities your property offers.”
According to Wessels there are even ways of changing your home expenditure into wealth. “By, for instance, taking out a life-insurance policy (which you must definitely do if you buy a house) that can put money back in your pocket. Find an insurer that offers a ‘money back’ bonus or something to that effect.”
Sanlam Indie: https://www.sanlamindie.co.za/