With the raising of the transfer duty exemption threshold to R1.1 million with effect from the 1st March, there are plenty of reasons for first-time buyers to get into property this year, says Samuel Seeff.
It is also still much easier to get a favourable home loan to finance a first-time property purchase. Aside from not having to pay transfer duty, qualifying buyers could also still secure a home loan of up to 105% which includes costs, depending on the bank and property.
Seeff says there a plenty of ways in which first-time buyers can get into the market, for example:
1. Buy your own home.
Investing in your own property is not only a way to secure the roof over your head, but property investment builds long-term wealth. You can finance this purchase and while paying off your home loan, the property will likely further appreciate in value. Once paid up, you will have an asset of considerable value.
2. Become a rentvestor.
This means you can purchase a home in an area that you can afford, while renting in a location which might be more convenient. This could be a great way to still build up property wealth as you can rent out your investment property and earn a rental income which can help finance most of the costs.
3. Buy a fixer upper.
You might be able to find an older or smaller property at a lower cost which offers great potential for renovating and extending the property. Minor cosmetic upgrades such as new floors, cupboard doors, tiles and sanitaryware is often a more affordable way to update a property and could add to your enjoyment of the home while adding value to the property.
4. Purchase in an area with lower price points.
By doing this, you might find a great property in an area that you might not otherwise have considered. Be sure to check the amenities in the area and that there is access to basic facilities and schools if you have future plans to start a family. These areas also often have strong rental markets for those who want to buy here and live elsewhere.
5. Buy in a new development.
Buying off-plan usually allows you to purchase a property at a fixed price which, by the time it is completed, will usually already have some value. There are normally mortgage loan packages available for qualifying buyers. These properties are also usually quite popular for rental investments.
Entry and exit costs associated with property can be steep. Buyers must always ensure they do their due diligence in terms of investigating the area, the property and price.
Also ensure you are financially prepared for the costs of property ownership, not just the monthly mortgage payments, but added costs such as property taxes, utilities, insurance, maintenance and so on.
Article Source: https://www.myproperty.co.za/news/market-and-opinion/five-ways-for-first-time-buyers-to-get-into-property-this-year-09-03-23
