To buy, or not to buy?
Category Property Advice
To buy, or not to buy? That is the question on the minds of potential homeowners at the moment. While the general idea is that it is wise to buy property, in some situations renting is a better option. What about building your own dream home? Has the thought ever crossed your mind? To buy, or not to buy, what are your options?
To buy, or to rent?
As a potential homeowner, buying a home is seen as better than renting. When you buy your own home, you have the freedom to renovate and change as much as you want. You get to work on your home at the pace that suits your income and your lifestyle. Having your own home gives you and your family a sense of security. It also shows that you have stability in your life. Buying a home now enables you to purchase a more expensive home in the future as your home will increase in value over the years.
When renting you are basically paying off your landlord's bond when you could be paying for your own investment. If you plan to live in a place for only a short while then renting will be ideal as you do not have to commit to a bond and other costs.
To buy as an investment?
While not everyone can afford to buy a home, a wise investment strategy would be to offer your new purchase out on rent. Your rental income can help pay off your bond each month. If you have already paid off your purchase then the rent you receive will be an extra income that you can either invest in other properties or save for a rainy day. Your investment can also be sold in a few years for a profit. Buying property is favourable to your investment portfolio as well. Aside from residential property, commercial investments are a great source of income that strengthens your portfolio. It is advisable to save as much as you can and take advantage of property sales during recessions.
Does the market look favourable?
The Reserve Bank's Monetary Policy Committee recently decided to retain the repo rate at 6.75% (base home loan rate at 10.25%). This is a good thing for home buyers as they do not have to cough up more on their repayments. However, they will also need to take inflation and changes in the national budget (later this month) into account. The property market is also recovering from the effects of last years "buyers market" with many houses still available for purchase. Potential buyers are spoilt for choice and are able to negotiate with sellers to get the best deals possible.
To build?
Most people have an idea of what their home needs to look like and what the property needs to cater for, such as a big kitchen or an entertainment den. In some instances, the many homes on the market are not exactly what the buyer wants. In this case, building your own home is a great choice. The first step would be to get in contact with a reputable builder and finalise the plans. Building your own home can take up to 6-months or more and come with many frustrations along the process. While this is true, at the end of your building process you can rest assured knowing that you have the perfect home for your family and the wait was worth having a brand new home with practically everything being new from taps, windows, etc.
Searching for a place to rent, an investment opportunity, or a home to call your own? Let Knight Frank help you secure the best deal. Contact us for more information on how our experienced agents can assist you.
Author: Knight Frank