Step 4 : Finding Your First Property
Looking for a property to live in and finding your first investment property doesn ’ t involve the exact same process or mindset . A first-time homebuyer will have different property requirements to those of a first-time property investor . Buying a home is a lifestyle decision , very much based on you and your family ’ s long-term needs . Unless you have a flatlet or room on the property you plan to rent out , a home purchase won ’ t necessarily be an income generator either .
An investment purchase , however , is a calculated decision around generating passive income streams through various buy-to-let , multi-let , buy-to-flip or development strategies . The following symbols will be used throughout this article to indicate which piece of advice applies to your specific buyer ’ s journey :
First-Time Home-Buyer First-Time Property Investor
CONSIDER THE COST IMPLICATIONS INVOLVED IN A PURCHASE
According to Standard Bank , there are certain costs associated with buying a home that you need to consider when to buy a property . You ’ ll need to :
• Examine the transfer and legal costs involved ;
• Consider municipal rates , taxes and sectional title levies in your ‘ affordability ’ calculations ;
• Assess the cost of moving households ;
• Consider the implications of making physical changes to a new home ;
• Work in the cost for buying furniture and fittings for a new home ;
• Compare the maintenance costs of established homes in the suburbs versus higher density townhouse complexes ;
• Weigh the advantages of buying a newly built home or an old existing home .
At the end of the day , your budget will determine your bond size and the type , size , and location of the home you eventually purchase .
Do your homework on property values and crime rates You will also need to do some research on the area in which you want to buy . Determine which of the local amenities you need are in that area . This includes schools , healthcare facilities and retail outlets . Other considerations include proximity to main roads and freeways and other modes of transport , like train stations and bus stops , to know all your commuting options .
It is also a good idea to find out the average property values and crime rates for an area in which you are interested . You can source this information from an estate agent who knows the area well . They would have done a Comparative Market Study ( CMC ) on the neighbourhood , using tools offered by Lightstone and PropStats , and should have these statistics and facts ready for you . They will also have a better understanding of the current property market ‒ whether it ’ s a buyer ’ s or seller ’ s market and what the supply and demand in the area might be .
Alternatively , pop into the local police station for crime stats , speak to residents in the area , chat with store owners and restaurant managers ‒ this information will provide you with a better idea of whether an area is a good one in which to buy .
Know what you want from your first home Be sure to have a clear idea of what you need from your first property purchase . Standard selection criteria include : number of bedrooms , bathrooms and off-street parking bays , erf size , and if the building is in a sectional title scheme or not ( more about that below ).
First-time home buyers should take a long view on their property purchase ‒ about five to 10 years ‒ to ascertain if the property will be able to cater to their changing needs over time . Are you requiring a house you can add additional rooms to accommodate a growing family ? Is there space to add an extra bathroom ? And , at the end of the day , will you be getting enough bang for your buck ?
Additional homework will be to find out if there is anything that might prevent you from developing a property as you plan to . According to Raazik Nordien of UF Architects , this includes Title Deeds ( for
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