5 Reasons to Own your Own Property

Are you an aspirant homeowner? Do you long for the security and stability of owning your own home? Do not let an overly-cautious approach keep you from your dream home; instead, follow in the footsteps of astute investors, who are investing with intention and benefiting from the current economic climate.

Owning your own home, particularly for the first time, is an incredible feeling – a mixture of excitement, accomplishment and pride. Unfortunately, economic instability has dampened consumer confidence – and because of this, fewer first time Buyers are experiencing the First-Home Feeling.

You may well be in the financial position to buy your own property, but the sustained turbulence in the economy, and by extension the property market, has possibly kept you renting as a precautionary method. John Loos, the Household and Property Sector Strategist at FNB, reported that the “younger, less financially strong households often stay put or postpone their entry into the homeowner market” for one or other reason – primarily poor consumer confidence. Although entirely understandable, this is as good a time as any to exercise less caution by taking advantage of the current market and overcautious approach of other aspirant homebuyers.

Here are 5 reasons why now is the perfect time to buy!

The Market currently favours Buyers:

The most important reason for Buying rather than Renting is that there has been a notable shift in the market in favour of Buyers. Undeniably, Financial Institutions have imposed stricter lending criteria due to rising financial constraints and debt, which essentially means that less people are qualifying for bonds – in fact, on average only 50% of bond applications are approved per month. The number of eligible Buyers in the market has decreased considerably, and those Buyers in the financial position to purchase property are now in a better position to negotiate the asking price with Sellers. Sellers who downscale due to financial pressure or for life-stage reasons, and who would like to sell in as short a space of time as possible, will likely adjust their selling price for a Buyer in financial good-standing.

Build your own Equity:

Despite the economic climate, owning a home is both an investment and a form of saving, in that over time you build up equity in a valuable asset. As the instalments are paid monthly, the loan amount reduces and the value of the asset appreciates. This makes more sense than renting from a landlord and essentially paying off their home loan and building their equity. In terms of establishing your financial future, buying property has long-term benefits in the growth of personal wealth and equity, thus providing a certain degree of security and protection in emergency situations.

In addition to this, disciplined repayment behaviour (with regards to home loan instalments) builds a positive credit record and increases financial stability - essential when applying for future credit.

Long-term Investment Possibilities:

The property market is a sound investment option which almost guarantees personal wealth growth - provided you have bought a property at a market-competitive price, in an established (or up-and-coming) area situated closed to major travel routes, popular facilities etc. The important thing is to allow the appropriate amount of time to pass before reselling, so that the value of the property has time to grow, and your initial loan amount time to decrease. Also, keeping up-to-date with maintenance and repairs, and making the necessary improvements will increase the value of your property in the long run, even though the initial cost may be high.

Customise your Property to suit your Lifestyle:

Your property is your prerogative! Should you wish to make any improvements, alterations or customisations to the property you will not first have to get permission from the property owner or landlord. It is easier to customise your home to suit any changes to your lifestyle or life stage (for example, the birth of a child). The interior and in most cases, the exterior too, are entirely your own and can be decorated and styled to your preference. What’s more, improvements (particularly to bathrooms, the kitchen, the garden and the security system) will likely increase the value of your home, which in turn increases the value of your personal wealth. External upgrades and restructuring may still be subject to Body Corporate or Council approval.

You are not Confined to a ‘Lease Period’:

Homeowners enjoy the peace of permanence and stability. You are not confined to the lease period specified in the lease agreement, and not subject to any unforeseen changes in the landlord’s personal circumstances (for example, he decides to sell before your lease period is up). The immense stress associated with having to find a new home when the lease period has come to an end if an extension is not granted, and the high costs of moving on an annual basis, are entirely null and void. 

Although there are significant moving costs associated with home-buying, they need not be repeated on a yearly basis. Long-term rentals are largely dependent on the relationship the tenant and landlord share, and the landlord's life circumstances. Should he choose to sell, rent the home to another tenant or increase the rent - the tenant has very little choice but to comply. Unpleasant landlords and soured landlord-tenant relationships can negatively affect the renting experience and living circumstances of the tenant. 

Additionally, there are no annual rental increases to budget for when you own your own property.

If you are in the financial position to buy property – in other words, you have built up financial reserves and are able to put down a sizable deposit (thus decreasing the loan-to-value ratio on the property) – then take the next step towards financial security and growth!

Buying property, especially as a first time Buyer, makes economical sense in a Buyer’s Market, and has long-term security, stability and financial growth benefits.