Buying a home for the first time is a daunting experience. A lot goes into finding the right area, space and price point that suits your needs. And then there’s the investment factor.
You might not be thinking of your new home as an investment. It’s your first place, and you want to live there forever. This is where you’ll raise your kids, this is where you’ll entertain friends, this is where you’ll grow old. So, why should you think of your home in terms of the money it could make you, if you have no intention of ever selling it?
Karmen Wessels from Sanlam Indie says that whilst you might not be thinking this way, things do change. “It won’t seem like it now, but you could be presented with an unmissable opportunity in another country. Or, your kids might get into a good school in a different neighbourhood. Or, you might just want to leave a legacy for them when your time finally comes.”
That means that even though you should be treating your home like a home, you should also be working to turn it into a top-notch asset. Here are some things to consider if you’re looking for both:
- You’re young.
If you’re a first-time home buyer, chances are you’re under 40. That means you might be a bit restricted in terms of what you can afford to buy. As your finances and lifestyle needs change and grow, your home will need to grow as well. So readjust the way you think about this place, because selling it to upgrade your life may become something you really want to do.
- Location is key
Wessels says that it’s likely you’ve heard this phrase before, but urges potential homeowners to really consider it: Location is key! The worst place in the best location still has the potential to become a solid investment, and spending less on the purchase means you’ll have more money left over for renovations.
- Purple bathrooms aren’t for everyone
“Be mindful of everything you change, paint over, rip up, add on, etc.” says Wessels. “Pinterest isn’t just for moms, and it’s a great way to stay on top of home decor trends. Do some research to find a timeless look that will endure.” She suggests that if in doubt, stick to neutral tones that will age well, and entice potential future investors rather than put them off.
- Can you rent it out?
If renting your property is something you might want to do one day, look into the type of renter you want to attract. AirBnB is a great way to make quick cash, but will your body corporate allow it? Are short-term rentals possible, or are your home and area appealing enough for a long-term renter? When buying, consider how close you are to amenities, schools, religious buildings and tourist attractions, as this will affect how successful your potential renter quest will be.
- Can your home generate income while you’re living in it?
There are loads of different ways to make your home work for you, even while you live there. You could start a home-based business and claim portions of your expenses back from tax, you could rent out rooms, you could rent out storage space, you could turn your garden into a fruit & veg patch and sell to locals. It takes a little creativity, and a good look into the opportunities your property can provide.
Wessels says that there are ways to turn even your home expenses into opportunities to create wealth. “As an example, by buying a life insurance policy (which is something you definitely need to do when buying a home) that can earn money back. Look for an insurer that offers a ‘money back’ bonus or the like. Sanlam Indie matches up to 100% of your monthly premium into a Wealth Bonus, which happily keeps growing (with market-related returns) until you’re 70, at which point you can cash it out. And if you’re not keen on waiting until then, you can cash out 10% of your Wealth Bonus every 5 years to spend on whatever you want,” says Wessels.
Source: SA Property Insider