Keep your eyes open...

Earlier this week we published an article aimed at equipping you to make sound and wise decisions when signing an Offer to Purchase.  With such an important contract in hand, you need to ensure that your signature binds you to an agreement that is reasonable and protects both you and the other party.

There are many things to take into account and we encourage you to take your time to read the contract in its entirety before signing it.

To help you know what to look out for – here are some more prudent points:

1. Faults, renovations and defects:  the days of buying ‘voetstoets’ – what you see is what you get – are now in the past (Since the effect of the Consumer Protection Act, April 2011).  If you are buying through an agent or developer, the seller needs to state all and any faults, renovations and defects of the property.  If they agree to fix these, then that needs to be stated in the Offer to Purchase as well as the date by which the jobs should be completed.  Without a deadline, if they are showing intent to fix the problems, you will have a hard time tying them down to a completion date.  If you are able to, taking photographs of the areas in question will help you ascertain if they have been sorted out properly.

Semigration - what's the deal?

 Whilst the term ‘semigration’ may be relatively new, the process is centuries old.  It refers to the translocation of people from one region to another region within the same country.  Emigration is one of the buzzwords in most social circles in our country as we struggle to regain ground within the context of economic and political turbulence.

However, for those who have chosen to stay in this beautiful country and tap into the potential that it offers, semigration is a very likely possibility. 

Reasons for relocation may include factors of security and crime, traffic and infrastructure or family and friends, but according to a study done by FNB the primary driver for semigration is work and financial opportunities. 

"Approximately 7% of all sellers sell in order to relocate within South Africa."

This means that most semigration is in the direction of the City of Gold – Johannesburg, the number one in business opportunities.  Despite the allure of the ocean, mountains and lifestyle, Cape Town falls far behind as number two, with KZN following closely behind in third place.

With this reality, you may very well find yourself needing to move to an area that you’ve never been to and have no idea what questions to ask and what to consider.  The Rivigan Property Group is the expert in the Krugersdorp/Ruimsig area and is perfectly situated to help you in finding a home to purchase or rent if you are planning to relocate.

We have a strict code of excellence that we adhere to in every deal and are focused on achieving the best outcome for our clients.  Contact us today for more information.

The effect of debt

Debt can be used most efficiently in order to grow an investment portfolio and purchase items that we need before we have acquired the full purchase amount.  This is only possible, however, if debt is managed properly and wisely.  Debt can have positive effects, but it can also have severely negative effects.

There are two types of debt: good and bad.  Good debt, quite simply put, is manageable and sustainable.  When you have what you need and are staying on top of your monthly repayments, you are in a good credit position, i.e.  you manage your debt well.  This is a common situation for many people who buy houses, cars or perhaps a few other expensive items, for which they can afford the repayments.  Affordability of debt refers to monthly repayments that are due in order to pay back the amount that you borrowed.

Bad debt is the opposite: you over-extend yourself and are unable to maintain repayments to your creditors.  This means that the debt that you have incurred is unaffordable.  This is typically caused by bad spending habits when people buy too much too soon, but it can also happen in the case of a hike in the interest rate or the tragic and often unavoidable loss of employment.  In order to manage your debt situation you need to manage your lifestyle.  There is an old idiom “cut your coat according to your cloth” - a basic budgeting principle to ensure that your costs do not exceed your income.

BONDS: How to get one smoothly...

You’ve saved for a deposit, you’ve cut clippings and searched the top websites to know what you want in your dream house.  Now, you need to get a bond.  Statistics show that nearly nine out of ten buyers* finance their homes with a bond, which means that virtually all buyers require home loans.

The good news is that obtaining a loan is not that difficult – but getting the best loan for you, that’s the potentially shaky part.

In recent years, good bonds have been harder to get as banks have tightened the loops that you need to jump through.  But getting a bond doesn’t need to be a difficult process – not only are banks once again offering 100% loans, but we can also guide you with a few tips to being a smooth operator when it comes to applying for a home loan.

Can I afford it?
One of the best reasons for acquiring a pre-approved loan is to find out which market you are able to buy in.  Although house-hunting can be exciting, it’s made far more enjoyable when you know that the house that you like is actually in your price-range and that you have a pre-approved bond, with all credit checks done, waiting for you.

You also need to consider that there are upfront costs of transfer and registration fees, which usually have to be paid outside of the bond.   Monthly repayment affordability is commonly calculated at around 30% of your gross income, but there are further factors that are considered that will determine the size of the bond that will be granted.

Buying to rent – what’s the best category?

TPN is a registered credit bureau that conducts ongoing research into consumer patterns and behaviours regarding debt repayment.  Rivigan Property Group works closely with this information in order to give the best advice to their clients and stay in touch with market trends.  

When considering the purchase of a property as a residential rental investment, the following information is extremely useful:

• The rental bracket of R3000 – R7000/m holds the best performance for rental payment with 84% of tenants in good standing
• The next rental bracket is R7000 – R12000/m with a performance of 82%
• Rentals for under R3000 and over R12000/m have the lowest performance at around 74.5% - almost 10% lower!

(figures at June 2011)

You need to plan and research your options in order to make the best property investment, so evaluate the long-term return of a property in a strong-performing market bracket.  The current trends in rent payment (as shown above) are a valuable guide to making this decision and will help you make a wise choice in property, as well as in your managing agent.

When dealing with a reputable and trusted agency, you are on the right track to sustaining a viable and profitable investment in your property.  If you want to buy a property to rent, let our agents know so that we can advise you accordingly.  Make the smart choice, choose Rivigan Property Group.