How does a 27-year-old afford a house? By working extremely hard, saving smartly and pooling finances.
International Emmy-nominated actress Thuso Mbedu and her sister recently became first-time homeowners. The sisters were close growing up, so the decision to purchase a home together was an easy one. Now in the process of paying off their bond, they're also planning on making some renovations to help cater for their needs and improve the value of their property.
Here, Mbedu along with Capitec talk about how young people can afford property and the renovations that add extra value to a home.
What's your advice on partnering with family to purchase a home?
TM: My sister and I have always known that we will get a home together, we just did not know when that would happen. She is my only family and getting a home for us was always on the agenda. I got to a place where I wanted to stop paying rent, it didn't make sense to keep paying someone else's bond for them. We discussed it and took the leap of faith.
It is a great feeling to finally have a place to call home. I would advise that if you are going to do anything that involves finances with family, you need to have a good relationship. You must discuss your financial goals, what you can handle and cannot handle. Transparency is vital.
What advice do you have for others looking to become home-owners?
TM: My journey to home ownership begun with taking control of my finances - I had to learn the difference between needs and wants, the importance of spending within my means, saving and how to build a credit record.
My advice is to really work on putting as much money away as you can from your first paying job. Save what you can and then save more than that. You have to develop good financial behavior as this will work in your favour when applying for credit to use as a down payment on a property or as a home loan.
Good financial behavior means a good credit score, so ensure you pay your accounts and other debts timeously, don't let debit orders bounce. All of these things will count against you when applying for credit.
Also, choose your credit products wisely by comparing offers before taking out credit. This will make managing your finances easier, helping you to build a good credit record. For instance, with the Capitec credit card you can benefit from a low interest rate from 10%, based upon your credit score. I also earn from 4.85% interest per year on a positive balance. The interest I earn could be used to help pay for my monthly admin fee.
And finally do your research, make a decision. There are a lot of "unplanned" costs that pop up in the beginning like attorney fees, so be prepared. Also, do not go for the first property that you see. Look around and make sure that what you settle on is what you love.
Any renovations in the works?
TM: I want to refurbish the kitchen and bathrooms, as they are slightly dated. This will not only make the house feel more like a home, but I plan on doing it in a way that adds value to the property. I have some money saved up and will use credit to fund part of the renovations too. You see I've made sure to not use credit for unnecessary things like heels, weaves or funding a flashy lifestyle. I now have that available credit to fund assets that are going to help me live better, like these home renovations.
I'm looking forward to creating a haven, where after a long day on set, I can come back put up my feet and relax.
Here are Capitec's tips to home renovation to make sure you add the most value to your property:
Prioritise the kitchen and bathrooms
The kitchen and bathrooms are undoubtedly the most regularly used spaces in most households. This makes them most prone to wear and tear, so it's important to keep these areas in good condition. You can add value by changing simple things, there's no need to redesign everything. In the kitchen, focus on aesthetics such as the cupboards. If the existing cupboards are still in good condition, consider changing only the cupboard doors or perhaps going for more modern door handles.
In the bathrooms, it's quick and easy to replace small fittings and accessories like towel rails and paper holders.
You'll be surprised by the impact these small changes will make. The kitchen and bathrooms could be a deal-breaker when selling your house, so be sure to budget a bit more when renovating these spaces.
Think about adding another room
The addition of one more room can make a huge difference. Going from a 2-bedroom house to a 3-bedroom house, or from a single, to a double garage and can mean a considerable spike in property value. It's also the ideal solution if you lack space or have a growing family. And an extra garage doesn't only mean more storage space, but also more security for your car, which may reduce your car insurance premium - a strong selling point to most buyers.
A little paint can make a difference
Old, cracked paint or discoloured walls don't only look bad, they also bring the value of your house down. A buyer will have to take repainting into consideration and may deduct this cost from their offer. So if you want a quick sale, steer clear from bright, contrasting colours and stick to neutral shades. What may suit your furniture and layout, may not work for a potential buyer, so it's safer to choose one colour throughout the interior of the house. This will also ensure that the house is move-in ready.
Security is an important factor to take into consideration when buying property. Basic security features, like an alarm system linked to an armed response company, have become standard in most South African homes.
Building a boundary wall or installing safety gates and burglar bars are simple ways to increase security. You can take it a step further by installing basic security cameras in and around your house to add even more value to your property.
Financing your improvements
Some of these improvements can be expensive, but this is where credit can help. Because home renovations contribute to your ultimate return on investment, getting credit would be for the right reasons. Capitec offers personalised credit of up to R250 000 with competitive interest rates from only 12.9% per year. Get a credit estimate on Capitec's website or simply use the Capitec banking app.
Buying a home and not sure how a home loan works? Find out how with Capitec Bank and SA Home Loans.
* This article was published in partnership with Capitec.