How big should your property be?

"Unless they focus on what they need rather than on what they might want, homebuyers are quite likely to end up with too much house."

So says Harcourts Africa CEO Richard Gray, who notes: "In many countries, there has already been a significant move away from suburban 'palaces' to more compact homes that are more affordable, use less energy and are easier to maintain.

"And now we are beginning to see that trend gain momentum in SA, thanks largely to the strict application of the National Credit Act and the limits placed on initial affordability by the lenders' almost universal insistence that homebuyers put down hefty deposits."

"But there are several more good reasons for prospective buyers to be very practical when choosing a new home."

The three main things to think about, he says, are the size of the stand, the size of the home itself and the need, if any for "extras" such as a pool, a second garage or even a garden shed.

"If you want to move from a flat or a townhouse to a place with a garden, for example, you may well be attracted to houses on very big stands. But apart from having a higher cost of acquisition that will boost your bond repayments, a large stand will also mean higher upkeep and security costs and higher municipal rate payments for as long as you own the property.

"So unless you are actually going to use the land for a home-based business or have a plan to subdivide and develop it fairly soon, a smaller stand is generally a better bet."

When it comes to the home itself, says Gray, buyers often don't stop to think of their actual space needs, and what unused rooms could cost them in the long run. "But it is not rocket science to work out that it is going to be cheaper to clean, maintain and care for a 200sqm home than a 400sqm home. Your water and lights bills will also be smaller, and those savings will come on top of a smaller bond repayment every month."

And finally, he says, it is also important to consider what real use you will get out of those "nice to have" extras and whether it is worth paying for them. "For example, a swimming pool near your entertainment area may look good, but if you are not actually going to use it regularly, it would be a waste to pay a higher house purchase price just to have it, and an ongoing waste to pay for the chemicals and equipment required to keep it clean.

Harcourts Press Release

Posted at 12:58PM Nov 01, 2010 by Editor in Residential  |  Comments[5]