Property investment tips for beginners
Property investment takes commitment, time and patience. You've probably heard that property is a long game and it's true. There are great rewards if you can stick with it, but it's not for getting rich quickly. In terms practical steps to take if you want to invest, here are a few important things to do.
1. Pay off existing debtDebt and how you manage your money will affect your affordability because the banks look at how you handle your financial commitments when deciding to lend you money for a home loan, or not. If you want to invest in property it's worth remembering that impulse buys and purchases on store accounts or credit cards could negatively affect your credit score if you do not service that debt regularly.
2. Save a depositIf your budget allows, saving a deposit for a property purchase is one of the best moves you could make. It demonstrates to sellers and banks that you are a serious buyer, it brings down the amount to borrow and it ultimately means you could get a better interest rate from the banks. Taken over a typical loan term of 20 years, even a small difference in interest rate could mean hundreds of thousands in savings... all because you managed to save a deposit!
3. Check affordabilityFind out how much you can buy for by getting pre-approved for a home loan by BetterBond. Then you can focus your search on properties that are within your budget and stand a better chance of getting the deal when you find a place you love.
4.Get the best bondAvoid costly mistakes by consulting seasoned real estate agents who know the area and type of property you're looking to invest in. Then, get the best interest rate on your bond by partnering with leading bond originators like BetterBond, who have more than 20 years' experience of helping South Africans attain their property investment goals. We will negotiate with all the major banks, including your own, on your behalf to get you the best bond. And our services don't cost you a cent.
5. Budget for all costsRemember to take all the costs of property ownership into account - not only your monthly bond repayments. You should include rates and taxes, levies (if you're buying sectional title property), insurance, and utilities like water and electricity in your budget. Working from home has become much more common, so you should also budget for connectivity costs like fibre internet.