Goooooooooooooooooooood Morning South Africa......
For those of you visitors who aren't native to South Africa, we used to have a TV show in the mornings (the apartheid days) where we all used to sit around the television and wait for the first morning show to start at 6:00 am (i think) called "Good morning South Africa", just thought I'd add my little "Gooooooooood morning Vietnam" twist to it...!
Before I carry on with my "5 safest buys in a economy that's taking a beating" post, I just wanted to say that I'm tired of people feeling sorry for themselves. I'm tired of people being unhappy in these gloomy times and I think it's time that people realised that even if it's a GLOBAL meltdown of world economies that we might be experiencing, there's always light at the end of the tunnel, and I think it's times like these that we all need to stick to friends and families and see the positive side to life! MONEY is not EVERYTHING!
So, smile, be merry & we're going to try and help you do that by giving you 5 tips for buying properties in a tough economy. Remember, when economies are down, people need money, this means bargaining skills and patience are the keys to scoring that ultimate real estate investment.
We have one advantage to our interest rates being so high. Those people that bought houses that they couldn't actually afford, are the people that are going to have to downscale (no offense to anyone but it's the truth). It means they're going to have to sell, or their properties are going to be repossessed. However, with times like these the banks aren't granting home loans. This is resulting in a massive influx of houses going on auction.
TIP 1: Keep your eye our for auctions, BIG BIG BARGAINS.
Think about your property before you buy it, think about the location. Everyone needs schooling. So why not buy around close to a school or educational facility like a varsity or college? It means you can save money by allowing your kid to walk to school. It's also a very safe buy because generally, prices of house around schools don't decline. I bet a piece of real estate next to Harvard or Cambridge is worth a fortune :)
TIP 2: Buy close to a school or educational facility.
Deposit, Deposit, Deposit... Make sure, that you have enough money to pay a 10% deposit PLUS cover the registration and transfer costs on a property. With banks being as tight as a ducks backside at the moment, it's imperative that you put down a 10% deposit. In fact, most banks are probably going to end up offering 90% loans by the end of the year.
TIP 3: Put down 10% deposit and cover bond + registration costs
World Cup 2010, tourism boom!!! Where are the stadiums? Where are the tourist hangouts and places to be for travel industries throughout South Africa. Do I need to say more on this topic? Let me give you a hint, Cape Town - Seapoint & Greenpoint seaside apartments. You will not get a better return on rental investments anywhere in the world. Greenpoint stadium is right up the road, Waterfront is right down the road, and it's central and on the seafront. I'm buying!!!
TIP 4: World Cup 2010 rental market
Use a bond originator to get your home loan. The silliest and most simple mistake you can make when applying for a home loan is to not use a bond originator. The service is free, the admin is ZERO and they'll apply to all the banks on your behalf at NO COST. It's really a no brainer. They know the tricks of the trade and WILL fight for your loan as it's their living!
TIP 5: Use a bond originator when buying property
Hope this helps.
WizardMan Out!
15 comments:
goood afternoon every onei like ur site and it is owner for me that iam b here
Thank you. I'm glad you like it. We love seeing readers on the site and the more input we can get from everyone the better we can make this website.
Great tips.
Nice to see other people being positive about the property market. Now is the time to buy and hold.
Great Blog.
Thank you guys for the great comments. People always seem to ge themselves down when the economies are down, but it's the time to pick yourself up...
Keep reading.
Thank you for the informative article.
Great tips you got here especially no. 2
Good positive blog. You are referring a lot to the deposit issue. Do you have any loopholes around it? Like if I buy a house 10% below market value. Will the bank use that instead of cash? So I buy a property for R450000.00 and bank values the property for R500000.00. So do I need a deposit? Or will the bank only value the house at R450 000.00, the purchase price? Property are going for less than 70% of market value in some areas these days.
Thanks for the comment.
Unfortunately the banks valuate the property at purchase price. If you get a bargain, well good for you :) but the banks won't increase the value.
What's going to happen is hat agents are going to inflate their property prices so that the clients can apply for higher bonds but obviously striking deals with agents and sellers (not legal though ). This is going to force property prices to stay the same even though they should actually drop.
I complete agree about the importance of locations the good choice is the location, the location,the location
Very informative post,and well-written too. It's so easy to read.
Hi
YOur bolg is very nice. I have really learnt a lot from this blog thanks
Once again a great post. There is still positivity out there which is fantastic.
colin, purchase price is market value mate, get used to it. agents "striking deals" will not keep prices higher especially as the buyers realise that the market has fallen.
times have changed, and more is in store... realism is not pessimism
Great tips! thanks for the information.
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