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Tag: Fixed fee estate agency

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Property investment for wealth building – benefits and pitfalls explained

Investing in real estate has long been considered a reliable strategy for building wealth because while stocks and bonds are often the go-to investment options, property is a tangible asset which offers unique advantages that can accelerate wealth accumulation over time.

Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty, says: “Unlike stocks or bonds, which can be subject to market volatility, real estate market fluctuations are not as extreme and property tends to appreciate steadily over time, making it a reliable long-term investment.

“Property ownership therefore tends to offer better long-term financial security and, on another level, being a physical asset with intrinsic value it invokes a sense of security and stability.”

Geffen lists the following key benefits of real estate for wealth building:

  • Passive Income Generation: One of the most enticing benefits of investment properties is the ability to generate passive income. By renting out the property to tenants, investors can enjoy a steady stream of rental income month after month. This income can supplement other sources of revenue and provide financial stability, especially during economic downturns or periods of unemployment.
  • Equity Build-Up: Unlike other investments that may fluctuate in value, real estate typically appreciates over time. As the property’s value increases, investors build equity, which can be leveraged for future investments or used to fund other financial goals such as retirement or education expenses. Additionally, mortgage payments made by tenants contribute to the gradual reduction of the loan balance, further increasing equity.
  • Tax Advantages: Investment properties offer several tax benefits that can help investors maximize their returns. Deductions for mortgage interest, property taxes, insurance, maintenance expenses, and depreciation can significantly reduce taxable income associated with the property. Additionally, investors may qualify for tax breaks such as the 1031 exchange, which allows for the deferral of capital gains taxes when reinvesting proceeds from the sale of one property into another.
  • Portfolio Diversification: Diversification is a fundamental principle of investing, and real estate provides an excellent opportunity to diversify one’s investment portfolio. Unlike stocks and bonds, which are subject to market volatility, investment properties offer a tangible asset with intrinsic value. By spreading investment across different asset classes, investors can mitigate risk and enhance long-term returns.
  • Inflation Hedge: Real estate has historically served as a hedge against inflation. As the cost of living increases, so does the value of real estate properties and rental income. This means that rental rates tend to rise alongside inflation, providing investors with a reliable source of income that keeps pace with or outpaces rising prices.

However, Geffen says that for new investors stepping into the world of real estate, it’s crucial to also understand the potential pitfalls and common errors associated with this venture:

  • Insufficient Market Research: One of the biggest mistakes new investors make is failing to conduct thorough market research before purchasing an investment property. Understanding local market trends, vacancy rates, rental demand, and property values is essential for making informed investment decisions. Neglecting this step can lead to purchasing properties in oversaturated markets or areas with declining property values, ultimately impacting long-term profitability.
  • Underestimating Expenses: Owning an investment property comes with various expenses beyond the initial purchase price. New investors must budget for maintenance costs, property taxes, insurance premiums, property management fees (if applicable), and unexpected repairs.
    Failing to account for these expenses can strain cash flow and diminish overall returns on investment.
  • Inadequate Property Management: Effective property management is crucial for maintaining the value and profitability of investment properties. New investors may underestimate the time and effort required to manage tenants, address maintenance issues, and ensure compliance with rental regulations. Hiring a reputable property management company can alleviate some of these responsibilities but adds an additional expense that must be factored into the financial equation.
  • Overleveraging: While leveraging debt can be a powerful tool for acquiring investment properties, overleveraging can pose significant risks, especially during economic downturns or periods of rising interest rates.
    New investors must exercise caution when taking on debt to finance property acquisitions and ensure they have adequate reserves to cover mortgage payments and other expenses in case of unforeseen circumstances.
  • Lack of Exit Strategy: Investing in real estate requires a long-term perspective, but new investors should also have a clear exit strategy in place.
    Whether it’s selling the property for a profit, refinancing to access equity, or transitioning to a different investment vehicle, having a plan in place ensures investors can adapt to changing market conditions and maximize returns on their investment.

“Overall, property as a tangible asset provides investors with stability, income generation, capital appreciation potential, leverage opportunities, and inflation protection, making it an attractive choice for medium to long-term investment strategies,” concludes Geffen.

“However, the potential pitfalls can be extremely costly, so it’s crucial that investors don’t skimp on their homework and make sure they have the best professionals onside when it comes to choosing money, leveraging finances, and managing their portfolios.

“By understanding both the benefits and risks associated with investment properties, investors can make informed decisions that align with their financial goals and maximize long-term returns.”

Original Article: https://www.myproperty.co.za/news/market-and-opinion/property-investment-for-wealth-building-benefits-and-pitfalls-explained-28-03-24

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Streamline your home buying experience

Despite what many will have you believe, buying a home shouldn’t feel like a daunting task despite the complexities and legalities involved. With careful preparation and consideration of the journey ahead, you can streamline the property-buying experience.

This guide will provide you with a step-by-step approach to buying a property in South Africa, helping you navigate the process with confidence.

Preparing for your property purchase

Before embarking on your property-buying journey, it’s crucial to assess your financial readiness.

The first thing you need to do is to determine your budget and affordability by evaluating your income, expenses, and savings. We suggest you do a lifestyle audit to see exactly where your money is going each month.

Once you have done that you can move on to the second step in your preparation – getting pre-qualified for a home loan. In addition to seeing what type of loan you might qualify for you will also be able to pick up on any issues that might cause you to not be approved for a home loan.

Additionally, research the property market and trends to understand the current pricing and demand in your desired location.

Save up for that deposit

Qualifying for a large home loan does not mean that you should take it – having a deposit ready will reduce the amount you need to lend and thus reduce the monthly bond repayments you need to make.

Use a bond calculator to determine what your monthly repayments would be with and without a deposit

Understanding your wants and needs

Define what you want in your home by understanding the difference between what you want (nice to have) and what you need.

A fireplace might be a nice addition, but it is not a necessity while a home close to good schools is a need. Take into consideration your lifestyle and future plans – there is no use in buying a studio apartment if you are planning on starting a family in the next five years.

Consider factors such as location, size, amenities, and future growth potential. Setting realistic expectations will help you narrow down your options and find a property that meets your criteria.

Using a real estate agent

One of the biggest myths in real estate is that buyers and sellers don’t need a real estate agent to help them through the process – and while it is possible to do so, real estate agents do play a vital role in the process – and by using an agent you might be able to save yourself time and money.

There are several reasons why using a real estate agent offers advantages:

  • Market Knowledge: Real estate agents have in-depth knowledge of the local property market, including pricing trends, property values, and neighborhoods. They can provide valuable insights to help you make informed decisions.
  • Access to Listings: Agents have access to a wide range of property listings, including those that may not be publicly available. This gives you more options to choose from and increases your chances of finding the right property.
  • Negotiation Skills: Experienced agents are skilled negotiators who can help you get the best deal possible. They can negotiate on your behalf to secure a favourable price and terms with the seller.
  • Legal Expertise: Real estate transactions involve complex legal processes and paperwork. Agents can guide you through these processes, ensuring that all legal requirements are met and protecting your interests.
  • Time and Convenience: Searching for a property can be time-consuming and overwhelming. An agent can save you time by identifying suitable properties, scheduling viewings, and handling negotiations and paperwork on your behalf.
  • Professional Network: Agents have a network of professionals, such as conveyancers, home inspectors, and bond originators, who can assist you throughout the buying process. This can streamline the process and ensure a smooth transaction.
  • Guidance and Support: Buying a home is a significant financial and emotional investment. An agent can provide guidance and support, answering your questions and addressing any

If you are a seller considering going at it on your own, make sure you understand the dangers of selling your property privately.

How do you apply for a home loan?

1. All the documents you need

Here is a run-down of the documents you will need for a home loan application and additional documents required if you are buying through a trust. We also take a look at self-employed individuals.

Documents you require for all applications:

  • A copy of your ID document
  • A copy of the offer to purchase containing both the seller and purchaser’s details
  • Proof of income. You will need to provide a salary slip (not older than two months), or a letter from your employer with a breakdown of your salary and deductions. If you are self-employed then you will need a letter from an accounting officer confirming your income, or a statement of your assets and liabilities
  • Six months’ worth of bank statements

Employed buyer

  • If your earn commission or overtime, provide the latest 6 months statements. Statements should be verified and supplied by the bank – internet statements aren’t acceptable.
  • Copy of your ID document.
  • Copy of Marriage Certificate or ANC Contract (if applicable).
  • Application form and consent document.
  • Copy of the Purchase Agreement.

Self-employed buyer

  • Proof of income: Letter of Drawings from an Accountant (for all applicants if applicable).
  • Personal Assets & Liabilities Statement.
  • Latest 2 years’ Annual Financial Statements.
  • Where Annual Financial Statements are older than 6 months to date, Current Management Accounts not older than 2 months signed by the applicant and accountant must be provided in addition to the Annual Financial Statements.
  • Copy of Marriage Certificate or ANC Contract.
  • Copy of Registration Documents or Trust Deed.
  • Application form and Consent Document
  • Copy of Purchase Agreement

Documents you require for a trust

  • A copy of the Trust Deed
  • A resolution by the trustees advising who may sign the home loan or pre-approval application and property purchasing documents

Understanding the property sales agreement

In the world of property transactions, one crucial document serves as the cornerstone of the entire process—the property sales agreement. While it may seem intimidating at first, understanding its significance is essential for both buyers and sellers.

How to avoid buyer’s remorse

Research Your Areas

While you may have specific suburbs in mind, financial constraints might redirect your house-hunting efforts. To ensure you still get what you want within your budget do thorough research in more affordable areas. Explore traffic routes during rush hours, assess local amenities, and consider proximity to friends, family, schools, and workplaces. A well-informed decision ensures that compromises are manageable and align with your long-term goals.

Consider Your Lifestyle

Your new home should complement your lifestyle. If you have pets, opt for pet-friendly spaces, while frequent travelers might prefer low-maintenance properties. Take your future needs into consideration as well, such as potential family expansion or job changes, to ensure the chosen property remains suitable in the long run.

This is why understanding your wants and needs are important before you buy a home.

Consult the Experts:

Before making an offer, enlist the expertise of builders, electricians, and plumbers to inspect the property. This diligence ensures confidence in the structure’s integrity and services. Uncovering issues doesn’t necessarily mean walking away but empowers you to negotiate effectively, after all “Knowledge is power.”

Adjusting to home ownership

1. Make sure you are properly insured

Homeowners must understand that they need to be adequately insured for the replacement value of the building, not just the market value, plus all the contents and they must specify valuable items.

No one wants to dwell on unpleasant events that may never happen but the fact is that they can – and often do – occur and being well-prepared for any eventuality is not only sensible; it affords you peace of mind, allowing you to get on with life with one less thing to worry about.

2. Don’t ignore important maintenance

Whilst you should exercise restraint in purchasing non-essentials immediately, don’t neglect any problems that are likely to worsen over time and which could become very costly to repair. Cosmetic repairs can wait but not issues like a leaking roof or blocked plumbing. Create a home maintenance checklist and include regular home maintenance tasks that you’d want to do on a monthly, quarterly, or annual basis. Doing so will extend the life of almost everything in your home, potentially saving you a lot of money over time.

3. Maintain an emergency fund for unexpected problems

As a homeowner, you can no longer call the landlord when there’s an issue and you should be prepared to deal with unexpected problems when they arise. These can be expensive and you can’t do without a geyser or working plumbing or live with a leaking roof.

Original Article: https://www.myproperty.co.za/news/market-and-opinion/streamline-your-home-buying-experience-18-03-24

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Understanding the ins and outs of a property sales agreement

In the world of property transactions, one crucial document serves as the cornerstone of the entire process—the property sales agreement. While it may seem intimidating at first, understanding its significance is essential for both buyers and sellers.

1. What is a Property Sales Agreement?

A property sales agreement is a legally binding contract signed by both the buyer and seller. This written agreement is typically divided into two sections—the Offer to Purchase and the Acceptance of Purchase. Together, they create a valid contractual arrangement that sets the stage for the property transaction.

Verbal agreements hold no weight in property sales – without a written and signed document containing all the necessary details, the property transfer cannot be registered with the Deeds Office.

2. Key Elements of a Property Sales Agreement

While every property sales agreement is unique, certain vital details must be present to ensure its validity. These include:

  • Names, ID numbers, and addresses of both buyer and seller
  • Agreed purchase price
  • Registered details of the property

Additional optional details often covered in the agreement may encompass fixtures and fittings, details of conveyancers and estate agents, division of responsibility for costs, date of occupation, required certificates, a voetstoots clause (as-is clause), suspensive conditions, and breach procedures.

Pay careful attention to the following terms, specifications, and clauses in the document before putting pen to paper.

Conditions of sale

Both the buyer and the seller stipulate conditions in the offer to purchase. Typically this section states that the purchase is subject to finance and bond approval on the part of the buyer, subject to the sale of another property, or even to the outcome of specialist inspection approvals.

The clause that states that the sale is dependent on bond approval should allow a realistic timeframe for this to be achieved. Where this is the case the potential buyer should notify the property agent as soon as the home loan is granted for the offer to purchase to become valid and to set the process in motion. Be cautious and ensure that the timeframe given for any deposit or cash payment is realistic and that you have sufficient time to notify your bank to release the funds. Money that is on 32-day notice (or similar) can only be transferred after the notice period is up.

Fixtures and fittings

The rule of thumb is that items that are fixed to the surface of the property, such as burglar bars and safety gates, are included in the purchase price. Movable items, like curtains, mirrors, and garden pots, are generally not, unless specified, and would thus be removed by the seller.

It is not uncommon for the buyer and seller to agree about fixtures and fittings that have been custom-made for the property to stay, or pieces that add to the specific aesthetic of the property.

Whatever is decided, make sure you have it in writing to avoid confusion or unhappiness further down the line.

Occupation date

The buyer and the seller need to agree on the date when the house will be vacated by the seller so that the buyer can move in. Most buyers and sellers usually need to make various moving arrangements so it is helpful to determine and clarify this date well in advance.

Occupational rent

Occupational rent is paid if the buyer needs to move into the property before it has been transferred and registered in their name. Conversely, it also applies when a seller remains in occupation of the property after it has been registered and transferred to the new owner.

Very simply, it is compensation for the use of a property that you’re not the owner of, and will only be occupying for a short-term period.

Purchase price

The purchase price is the most important stipulation in the offer to purchase document. The price offered by the buyer should be stipulated, together with a timeframe within which the seller needs to accept, reject or negotiate it.

Also make sure you’re acquainted with the clauses that stipulate the commissions to agents, the expiry date of the offer, and the need for various compliance certificates.

Lastly, take care to ensure that any verbal discussions and decisions to change anything in the contract are put in writing and signed by all parties.

Familiarising yourself with the offer to purchase not only allows for the buying and selling process to run more smoothly but also protects the parties involved against hassles that may arise later on.

3. Seeking Professional Assistance

Given the complexity of property sales agreements and the potential pitfalls that may arise, it’s strongly recommended to seek professional assistance. While some may consider drafting the agreement independently, this approach can lead to unintentional gaps or loopholes with severe repercussions later on.

To ensure a smooth and secure transaction, relying on the expertise of a real estate agent is the safest bet. In many cases, the seller’s real estate agent will aid buyers in drafting the Offer to Purchase.

4. The Legal Binding Point

Buyers are often under the impression that once they sign an Offer to Purchase, they are immediately bound by the agreement. However, this isn’t always the case. The Offer to Purchase may include a clause stating that it is irrevocable for a specific period.

Without such a clause, buyers retain the option to withdraw their offer until the seller accepts it. Once both parties sign the Acceptance of Purchase, the agreement becomes legally binding. Only a breach of contract or failure to meet suspensive conditions (e.g., securing finance) would nullify the agreement and halt the sale.

5. Negotiating with the Seller

In the event the seller rejects the buyer’s offer, the existing agreement becomes invalid and cannot be reconsidered later. To negotiate, both parties need to draw up a new Offer to Purchase, reflecting any amendments to the purchase price.

Verbal negotiations can be useful, but it’s crucial to understand that until written and signed by both parties, a verbal agreement is not legally binding.

Original Article: https://www.myproperty.co.za/news/legal/understanding-the-ins-and-outs-of-a-property-sales-agreement-19-02-24

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Reverse migration: returning expats are investing in South African property

Despite the tales of South Africans emigrating in droves, figures show a steady decline in net migration rates in recent years, and many expats are returning to South Africa and investing their foreign earnings in property.

“Over and above the wave of semigration to the Cape and the growing interest of high-net-worth foreign investors, we’ve seen a notable increase in enquiries from expats”, say Stephan Thomas and David Burger, Secure Estate Specialists for Lew Geffen Sotheby’s International Realty.

“Many of these buyers left South Africa in their teens or their early twenties, are now in their thirties and forties with families of their own and keen to return for several reasons, including lifestyle and the advantageous exchange rates that enable them to leverage their foreign-earned currency.

“Others are retirees looking to escape the harsh European winters to enjoy their golden years in a temperate climate where they can pursue outdoor leisure activities and their hard currency pensions will stretch that much further.”

One of the most significant drivers behind expats’ return to South Africa is indeed the advantageous exchange rates that enable them to maximise the purchasing power of their foreign-earned currency.

“With currencies like the US dollar, British pound, and euro continually strengthening against the South African Rand, expatriates find themselves in a favourable position to invest in property and capitalise on attractive opportunities.”

Lifestyle is the other key driver and Cape Town’s Southern Suburbs are especially appealing as not only are most of the city’s best schools located in the area, but residents are spoilt for choice when it comes to leisure activities and sports facilities, from beautiful beaches nearby to golf courses and restaurants.

In a broader sense, expatriates are lured back by the country’s vibrant cultural scene, culinary diversity, and rich heritage which offer a unique and enriching experience for returnees and their families.

“The other reality is that people living in the UK and Europe are becoming more miserable every day with wars on their doorstep, uncontrolled immigration, and cost of living increases, and, at the end of the day, we all aspire to a better lifestyle and will seek it out,” said Burger and Thomas

Another compelling drawcard is that buyers have a wide choice of property options, particularly in the secure estate sector.

“Estate properties are very popular with these buyers and estates in this area offer everything they need, including controlled access, first-class lifestyle amenities, and a sense of community as well as property options to suit most budgets, although we find that our expat clients generally purchase within two price bands: R9 million to R18m and R25m plus.”

Despite the country’s enduring economic and political challenges, South Africa still boasts pockets of resilience and growth potential and burgeoning sectors such as technology, renewable energy, and tourism offer ample opportunities for entrepreneurial ventures and career advancement.

“For many expats, reconnecting with their roots and embracing their cultural heritage is a compelling motivator for returning to South Africa,” said Burger and Thomas.

“And the sense of belonging, community, and identity they experience fosters a profound emotional connection, prompting them to rediscover and contribute to the nation’s social fabric.”

Original Article: https://www.myproperty.co.za/news/market-and-opinion/reverse-migration-returning-expats-are-investing-in-south-african-property-08-02-24

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5 Defects to look for when buying a home

Are you in the market for a new home? Exciting as it may be, buying a home is a significant investment that requires careful consideration. While a house may appear perfect at first glance, there could be underlying issues that might lead to substantial expenses down the line if not properly addressed. To ensure a smooth and informed buying process, it’s essential to be vigilant and ask the right questions before committing.

Doing your due diligence when buying a home or investment property is vital. While sellers are obligated to disclose known defects, buyers should take proactive steps to safeguard their interests. It is mandatory for property professionals to provide a disclosure form but is advisable to ask pertinent questions to uncover any potential issues that could impact the property’s value or safety.

One crucial aspect to consider is the voetstoots clause, which protects sellers by requiring buyers to prove that defects were deliberately concealed. Additionally, buyers should be vigilant for common defects that could result in costly repairs.

Key issues to watch out for during property viewings:

1. Rotting Wood: Inspect areas prone to moisture exposure, such as kitchens and bathrooms, for signs of rotting wood. Exterior wooden features, like decks and trims, should also be checked for decay.

2. Ventilation Issues: Adequate ventilation is crucial to prevent moisture buildup, which can lead to mold and dampness. Pay special attention to roof spaces and ensure proper ventilation to maintain structural integrity.

3. Roofing Issues: Look for damaged or missing tiles, as well as rust patches on metal roofs. A compromised roof can result in costly interior damage and should be addressed promptly.

4. Drainage and Water Control: Poor drainage around the property can cause water-related issues and compromise the foundation. Ensure proper grading and maintenance of drainage systems to prevent water intrusion.

5. Dodgy DIY Repairs: Be wary of amateur repairs, particularly in plumbing and electrical systems. Consulting a professional home inspector can help identify any hidden issues before finalizing the purchase.

In conclusion, thorough inspection and due diligence are essential when buying a property to avoid costly surprises down the road. If any doubts arise during the process, seeking the opinion of a qualified home inspector is highly recommended. Remember, it’s better to walk away from a problematic property than to inherit costly repair burdens. By being proactive and informed, you can make a confident investment in your future home

Original Article: https://www.myproperty.co.za/news/market-and-opinion/5-defects-to-look-for-when-buying-a-home-06-02-24

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Choosing the perfect neighborhood for your investment property: A comprehensive guide

While investing in property is still a good option for financial growth, the key to a successful investment lies in selecting the right neighbourhood. We take a look at what you need to take into consideration when choosing a neighbourhood for your investment property.

Consider the overall quality of the neighbourhood

If you’re entering the rental market, the quality of the neighbourhood is paramount. A good area attracts better-quality tenants. Investing in a smaller property in an excellent area is wiser than the largest house in a subpar neighbourhood.

Vacancies and demand

Research the number of properties available for rent in your target suburb. A high demand for rentals typically allows landlords to charge higher rents. Be cautious of neighbourhoods with many available properties, which may lead to increased competition for tenants.

Evaluate the average rent in the area

Ensure that the rental income in your chosen neighbourhood covers your loan repayments, capital investment, and other property-related expenses. Understanding the average rent helps you make informed decisions about the financial viability of your investment. We advise involving a local property professional who not only understands the market but will be able to assist you in finding the right property for your investment needs.

Account for property taxes and levies

Property taxes and levies are inevitable costs that can impact your rental income—research council taxes and, if applicable, the monthly levies charged in complexes or estates. Higher facilities often correlate with higher levies.

If you are contemplating an investment property in a sectional title scheme make sure you understand all the rules and regulations that would apply to you and your tenants. Also, ensure that you ask for financial statements and check that all the rules are registered at the CSOS.

Know the resident demographic

Identify the type of tenants you want to attract. Your property should align with their preferences and needs. The needs of a family will differ from a young professional just starting out – understanding this will help you understand what type of property and area you will need to look at. Consider existing demographics as well; proximity to a university may attract students rather than families, for example.

Check the crime rate

Safety is a crucial factor. Investigate the crime rate in the neighbourhood and surrounding areas. Engage with locals and inquire about neighbourhood watches, security patrols, and overall safety measures.

Proximity to schools

If your target tenants are families, proximity to good schools is essential. The closer your property is to reputable schools, the higher the rental potential. Families are less likely to move if their children are enrolled in nearby schools, reducing tenant turnover.

Evaluate amenities

Consider the amenities that align with your target tenant demographic. Families may prefer properties near community shopping centers and parks, while young professionals may seek modern, convenient properties close to shops and restaurants.

Assess fittings and fixtures

Modern, functional, and easy-to-maintain fittings and fixtures, especially in kitchens and bathrooms, contribute to the appeal of your property. While luxury may not be necessary, a contemporary design is likely to attract a broader range of tenants. While you are doing this keep in mind that most tenants will need to be able to have access to reliable internet – so check the coverage in the area and assess if this will be a bonus to your tenants.

Original Article: https://www.myproperty.co.za/news/market-and-opinion/choosing-the-perfect-neighborhood-for-your-investment-property-a-comprehensive-guide-25-01-24

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Roof Care 101: Protecting your home from leaks and damage

Roof leaks, a seemingly minor inconvenience, can lead to significant damage and financial implications for homeowners. Leaks can result in substantial water damage to various parts of your home, including roof trusses, ceilings, walls, electrical systems, carpets, and cupboards. To mitigate the potential financial burden, it’s crucial to address roof leaks promptly and efficiently.

Before you replace the whole roof or large parts of it, before you have checked out these seven other common (and easily fixable) causes of roof leaks:

Damaged flashings

Flashings, installed along the joints of your roof to seal weak points against water and pests, often bear the brunt of environmental stress. Cracks or damage, especially around skylights, chimneys, or valleys where roof sections meet, can lead to leaks. Regularly inspect and promptly repair damaged flashings to prevent water ingress.

Broken or missing tiles or slates

Damaged or displaced roof tiles are a frequent culprit for leaks. Identifying and replacing broken tiles is a relatively simple fix. However, it’s essential to check for underlying damage to waterproofing, rafters, or insulation beneath the affected area.

Poorly placed fixings

Fixings secured improperly into rafters create an open invitation for water ingress. Extracting these fixings and adequately sealing resulting holes is necessary to prevent leaks in the future.

Clogged gutters

Clogged gutters impede the proper drainage of rainwater, leading to water pooling on the roof. Regularly clearing gutters of leaves and debris ensures efficient water flow, preventing potential leaks and damage to fascias, rafters, and walls.

Damaged soffit or fascia boards

Soffit and fascia boards, designed to protect against water and pests, can degrade over time due to exposure to sun, wind, and rain. Regularly check for cracks or holes and replace damaged boards with modern UPVC alternatives for enhanced durability.

Pitch problems

The pitch of a roof affects how different roofing materials are installed. Roofs with shallow pitches may require additional waterproofing and better flashing. Ensuring proper construction and promptly addressing pitch problems with expert assistance can prevent leaks.

Lean-to roofs

Inspect lean-to roofs regularly, especially if positioned beneath the main roof’s rainwater runoff. The repeated impact of water can compromise these roofs over time. Installing gutters or replacing tiles or roof sheeting prevents potential leaks.

Remember that taking care of the roof over your head goes beyond aesthetic concerns—it’s a critical aspect of maintaining a safe and comfortable home. Regular inspections, prompt repairs, and preventive measures can save you from the headaches and financial implications of water damage. By addressing these common causes of roof leaks, you’ll not only protect your property but also ensure that the next summer rain brings relief without any unwanted surprises.

Original Article: https://www.myproperty.co.za/news/lifestyle-and-architecture/roof-care-101-protecting-your-home-from-leaks-and-damage-15-01-24

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Buy a starter home or wait for your forever home?

For many considering entering the property market, the question of whether they should purchase a starter home now or wait until they can afford to buy their forever home might be on their minds.

The definition of what constitutes a starter home will differ from one person to the next. When some people think about a starter home they may have a fixer-upper in mind, however, this is not necessarily the case. One person’s starter home might be exactly what another person is looking for in a forever home.

Generally speaking, a starter home is a property that will suit your needs for approximately the next five years or until your circumstances change, whereas a forever home is a property that you can see yourself living in indefinitely or at least for the next 20 to 30 years. It is the home that meets all the criteria of your dream home – the right location, the right size, and all the features you would ever want or need.

Essentially the decision to buy a starter home now or wait will be determined by a number of aspects, such as affordability and buyers’ individual needs. While all buyers would rather opt to purchase their dream home straight away, the large majority of first-time buyers are not in a financial position to do so.

Another factor is that there are advantages of starting out with a more manageable property and upgrading at a later stage, such as building up equity. Once a buyer is in the property market it is generally easier for them to build from there, as they have an appreciating asset that they can sell to help them upgrade. They also have the option of keeping their starter home as an investment property and renting it out to get a passive income.

While purchasing property should be viewed as a long-term decision, there might be features that buyers want but don’t necessarily need at the moment, such as an extra bedroom or a large garden. It would make sense to rather save money and compromise on unnecessary features that can severely impact the price of a home. The lower bond repayment and less expensive upkeep will allow the buyer to save money for their future forever home.

Many first-time buyers are young couples and executives who are in the early stages of their careers, so buying a starter home may give them a chance to build up their income and affordability ratios to be able to afford a higher bond repayment and bigger property when their current home no longer meets their requirements. Living in a starter home will also give the buyer a chance to assess what features they want in their dream home and what they don’t, as well as get a handle on the different responsibilities and expenses that accompany homeownership.

If buyers decide to wait for their forever home, ideally they should rent a reasonably priced property so that they can build up to bigger savings to put down a sizeable deposit. The larger deposit they are able to put down the better, as this will reduce the monthly bond repayment.

First-time buyers who want to fast-track their forever home purchase should follow the tips below:

Start where you can and build up

The first property bought may not be your dream home, but it’s a foot in the door.

Have extra money saved for expenses

Buyers should have around 5% of the value of the home saved for other expenses, such as maintenance or renovations.

Pay more to reduce the bond term

An additional payment of just R500 on the monthly bond repayment can reduce a 20 year bond of R1 000 000 by almost three years. This will also reduce the amount of interest paid over the term of the bond.

Prepare for the unexpected

Prepare financially for possible future scenarios such as an interest rate increase or any other scenario that could financially threaten future plans.

Buyers can still enjoy the benefits of owning their own home and having their foot in the door without over-committing themselves financially and compromising their financial well-being in the future. It is always a good idea to get pre-qualified for a home loan as this will not only show you what kind of loan you might qualify for, it will also help you plan for possible monthly payments. This in turn will allow you to build a sensible monthly budget to ensure you will be able to cover repayments and build an emergency fund.

Original Article: https://www.myproperty.co.za/news/market-and-opinion/buy-a-starter-home-or-wait-for-your-forever-home-02-01-24

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Maximizing Home Sales During the Festive Season

As the festive season approaches, homeowners looking to sell face unique challenges during the holiday break. To ensure a successful sale, it’s crucial to navigate these obstacles strategically.

Here are some valuable tips from Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa for selling your home during the festive season.

Plan Around Year-End Closures

During the holidays, organizations, including the deeds office, experience closures. The deeds office will be closed from December 22, 2023, to January 2, 2024. To avoid complications, ensure any necessary registrations are lodged before December 11, 2023. Additionally, coordinate with your real estate professional to align schedules and manage expectations during this period.

Maintain Presentability Despite Challenges

One of the biggest challenges will be keeping your home presentable during the festive season with everyone at home – more so if you have young children. Stay on top of daily messes and request advanced notice of potential viewings from your agent. This way, you can tidy up your home efficiently before any prospective buyers arrive.

Balance Festive Decorations

While decorating for the festive season is enjoyable, striking a balance is essential. Consider minimizing personal items and Christmas decorations to allow buyers to envision themselves in the space. Avoid going overboard with decorations that may be too personal or reflective of your taste.

Choose the Right Real Estate Agent

Selecting a reputable real estate agent is crucial for a seamless sale during the holidays. Look for an agent from a trusted brand with excellent communication and planning skills. A skilled agent can guide you through the complexities of selling during the festive season and ensure a successful transaction.

Selling your home during the festive season may pose challenges, but with thoughtful planning and the right agent by your side, you can achieve a smooth and successful sale.

Original Article: https://www.myproperty.co.za/news/market-and-opinion/maximizing-home-sales-during-the-festive-season-18-12-23

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A guide to avoid home loan rejection

In the pursuit of homeownership, the dream of securing a home loan is a crucial step. However, the path to approval is not always smooth, and potential borrowers often find themselves facing rejection. We take a look at several factors that can lead to a home loan application being turned down, which further highlights the importance of meticulous preparation before approaching lenders.

1. Managing Debt and Income Ratio

One of the primary considerations for lenders is ensuring that borrowers do not become over-indebted. If your existing debt and monthly obligations consume a significant portion of your after-tax income, it signals to lenders that you might struggle with home loan repayments. Prospective borrowers must carefully assess their financial situation and aim for a healthy balance between income and debt.

If you don’t have a budget or you are not good at keeping yours up-to-date, now is the time to get a better understanding of your spending.

Start by determining all your income sources and totaling these amounts into one number. Once you have this number, use your bank statements and credit card statements to determine how much you spend on fixed payments (such as car payments, school fees, medical aid, etc) and optional spending (everything that you don’t pay a fixed amount on every month) List all the fixed expenses, and the average you’ve spent on them for the past three months. Categorize each optional item in groups such as food, transport or petrol, entertainment, clothes, baby supplies, household, travel, transportation, etc. List each group on your spreadsheet, with the average you’ve spent on each over the past three months.

2. Maintaining a Strong Repayment Track Record

While having no defaults on loans is crucial, a habit of paying bills late can adversely impact your credit record. Lenders scrutinize your payment history, including credit cards, store cards, car repayments, rent, and other financial commitments. To enhance your chances of approval, a track record of timely payments for at least two years is recommended.

3. Stable Employment History

Lenders prefer borrowers with a stable employment history, ideally spanning two to three years. This stability provides assurance regarding the ability to meet long-term financial commitments. Self-employed individuals may face additional scrutiny, necessitating meticulous record-keeping of income and expenses.

4. Sufficient Cash Reserves

The days of securing loans for 100% of the property purchase price are waning. Lenders now expect borrowers to contribute a substantial cash deposit. Whether from savings or equity from the sale of an existing property, having enough cash on hand is crucial. Additionally, lenders want assurance that borrowers can cover transaction costs like transfer duty, legal fees, and bond registration fees.

Learning from Previous Rejections

Previous loan rejections leave a mark on your credit history, making it challenging to secure approval from other lenders. Taking proactive steps, such as paying off debt and establishing a consistent track record of timely payments, is essential to improve your creditworthiness.

Take a proactive approach by seeking pre-approval through a bond originator. This preliminary step allows individuals to identify and address potential issues before embarking on the house-hunting journey. Pre-approval not only streamlines the home-buying process but also provides a clear understanding of the budget, empowering borrowers to make informed decisions.

Original Article: https://www.myproperty.co.za/news/market-and-opinion/a-guide-to-avoid-home-loan-rejection-13-12-23

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