Making the decision to purchase a property is very exciting, but it is important to understand that it is a major financial commitment that should not be entered into without the proper consideration, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. He notes that given the long-term nature of a property investment, there are a number of essential elements that should be carefully measured beforehand, to ensure the buyer is making the right decision and is purchasing a property that meets their needs both now and in the future.
“Purchasing a property is a decision that will have an impact on the buyer’s financial well-being both now and in the future. This is why it is vital that the buyer makes an informed decision that is based on their life plans, looking at both their criteria now and how their needs could evolve over the next five to ten years. Rushing into the decision without considering your long-term plans and goals could end up costing a lot more money in the long run. It is essential make a property buying decision with future plans in sight,” advises Goslett.
Before a buyer even looks at properties, Goslett says that they should sit down and determine what features they will currently need in a home, as well as the feature they may require in the future. A few elements to consider would be the number of bedrooms and bathrooms, the need for a garden or the number or type of parking facilities. There may also be special criteria such as energy-efficient features, a swimming pool and fireplace or wheel-chair accessibility.
These are some examples of questions buyers might ask when looking for a home that will meet their future requirements:
• Do I need a home office?
• Do I plan to have children?
• Do I have children who will be moving out soon?
• Am I close to retirement?
• Will I need a home that can accommodate different life stages?
• Do I have an older relative who might come to live with me?
Each and every buyer will have their own unique criteria that will be specific to their life stage and future plans. If a buyer is at the stage in their life where they are planning to have children, proximity to good schools would be a priority, whereas a buyer who is nearing retirement would want a home in a quieter suburb.
“The biggest restriction that buyers face when looking to purchase a home that will fit in with their future plans is affordability. Financial restrictions could mean that buyers will need to compromise on certain aspects, even if only for the time being. If a newly married couple who want to start a family need a third bedroom, but can only afford a two-bedroom home, they could find a home that they can add onto when they are financially ready. This way the home will meet their current needs, while having the potential to grow into their future plans,” says Goslett.
He notes that regardless of the type of home the buyer decides on purchasing, sustainability is a key issue to homeownership. “Again due to the long term nature of homeownership, the most important aspect to any property purchase is to ensure that purchaser can afford and sustain the financial obligation before entering into the agreement. In order to assess this, the can make use of the resources available to them such as financial advisers, banks and bond origination companies such as BetterLife,” says Goslett.
He adds that bond repayments are not the only financial consideration when it comes to affording a property, as there are other costs involved in both the property transaction and homeownership. It is vital to take these additional costs into consideration when assessing affordability as they can add up to a relatively large amount.
According to Goslett, another essential aspect to consider in every property purchase is location. “Even if the property meets the buyer’s needs, if it is situated in a bad area it is probably not going to be the right property to purchase. Location is a key influencer when it comes to a home’s future investment potential. It is far better to compromise on the features of the home than on where it is located,” advises Goslett. “Buyers who purchase a property in the right location that meet both their short and long-term needs will be able to enjoy the benefits of an accommodating home that grows in value over time,” he concludes.
