If you’ve been sitting on the fence about buying a house, and no longer believe that real estate is the great investment it used to be, now is the time to take a leap! Several property economists in South Africa have recently been saying that renting a home is preferable to buying, but don’t let this negative press deter you from one of life’s greatest joys.
Take a look at five reasons why owning your own home makes sense:
When you pay rent, you never see that money again. Yes, buying a home may come with some hefty initial costs (deposits, transfer costs, legal fees), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates, and for the areas that have seen harder times since the recession, the housing market will recover at some point. Home ownership is about building long-term wealth. A home bought for R25, 000 in 1981 is most likely worth 20 times that in today’s market.
Tenants tend to see their neighbours come and go quickly. Some people sign year leases while others are in an area for much shorter periods. Apartment blocks also tend to have less common shared space for people to meet, greet, and socialise. Home owners, however can get to know each other. Neighbours that own their homes stay put much longer (at least three to five years if they hope to recoup their purchase costs). This means more time to develop relationships. Research has shown that people with healthy relationships and stable home environments have more happiness and less stress.
Well, as long as you have a fixed-rate term on your mortgage bond it’s predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed. If your monthly mortgage payment is R5, 000 today, then it will still be R5, 000 a month in 2 years. This allows for people to budget and make solid financial plans. Home ownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last for about 15 years, and you know that each year you’ll need to pay for the gutters to be cleaned, and so on.
Okay, this is a given. Home ownership means you “own” your home. However, owning your home comes with some incredible perks! You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the room, or do holiday decorating. The bottom line is this is your home and you can personalise it to your taste. Most tenants are stuck with the same beige walls and beige carpet that have been chosen by the landlord.
5. Great Deals
It’s a great time to buy. Interest rates are at historic lows, and this means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. Right now, it’s cheaper to buy and cheaper to borrow. If you have steady income and cash for a deposit, then be sure to start looking for a home to buy while property prices are subdued.
Home ownership can be a real joy. Now is the time to get off the fence and into a home that is right for you!