It’s that time of year when, whether you love it or hate it, conversation around the braai invariably turns to resolutions and what yours are for the next year.
Losing weight and going on more adventures is your prerogative, but, according to Leapfrog, they have some suggestions for property resolutions that are definitely worth making, and are fairly easy to stick to. What’s more, they’re the kind of things that your future (financially independent) self will certainly high-five you for.
Here are Leapfrog’s top five property resolutions for 2019:
1. Pay more than the minimum into your bond
Strictly speaking, a property only really becomes an asset when it is paid off. Just because the bank has given you a 20-year bond, or even over 25 years, doesn’t mean you should take 20 years to pay off your property.
“The faster you pay off your bond, the sooner you own that asset, and that will enable you to leverage your income to diversify your property portfolio by acquiring more, or to build up an emergency fund in your bond account,” recommends Elmarie Bester, principal at Leapfrog Faerie Glen.
Bester says it is a good idea to get into the habit of making additional payments whenever you can. “As little as R500 a month extra could shorten your home loan period by a couple of years.”
If you need motivation for making extra payments into your bond, consider the following comparative table:
| The required payment | If you add R500 | |
| Monthly repayment | R10 000 | R10 500 |
| Total loan amount | R2 159 055 | R1 996 794 |
| Total loan term | 17.99 years | 15.85 years |
| Total interest | R1 159 055 | R996 794 |
In this example, by paying R500 extra a month, you will save R162 262 on interest.
2. Negotiate a better interest rate on your bond
One of the fundamental factors determining the favourability of a home loan is the interest rate that it is tied to. But the good news is that the interest rate needn’t be fixed for the full loan period.
“The goal is always to get the lowest interest rate possible, and often the best way to do this is to shop around. If you already have a bond there is no rule that prohibits you from moving that bond to an institution that can offer you a better interest rate. But you may incur costs for cancelling your existing bond, so be sure to take that into consideration as a possible expense,” Bester advises.
Cutting down on interest is how you save the most money over time. “Even a 1% difference in the interest rate can save you thousands over the long term,” she adds.
There is some paperwork involved in moving your bond (subject to approval) to an institution that can offer you a better interest rate, but it may be worth the effort when you consider the savings.
3. Prioritise property maintenance
Property maintenance has a direct impact on property value and growth. “A well-maintained property always fetches a higher price in the market because of its appealing presence,” Bester says.
Maintenance doesn’t necessarily mean reconstruction or engineering, but is rather about keeping your hand on the little things - fixing things when they break, replacing fittings that are old or outdated, painting the interior and exterior every couple of years, looking after the garden and making sure the plumbing and electrics are in safe working order.
“Property maintenance becomes easier, and more ‘natural’, when you adopt a ‘house-proud’ mindset. Tell yourself that the little things become the deciding factors on value later on,” Bester suggests.
Doing some improvements regularly, and not allowing a small niggle to become a maintenance nightmare, is possibly the smartest, most cost-effective way to go about it.
4. Ask a trusted property advisor for an evaluation
Make a point of getting your property evaluated regularly. “Property evaluations will be done free of charge by a trusted property advisor in your area and it takes no more than an hour of your time,” Bester explains.
The evaluation will give you a market-related value for your property, comparable to other properties in the area. It also gives the property owner a useful indication of what can be improved to increase the value.
“Moreover, a property evaluation is an interesting way to see how your investment has performed,” says Bester.
5. Say hello to your neighbours
Everybody wants to live in a friendly neighbourhood, and friendliness starts by being friendly. If you don’t know your immediate neighbours, make it your mission to go around and introduce yourself. And stop for a chat when you see them outside.
“Properties in neighbourhoods where the people are friendly and care for each other are very desirable. Good neighbours make strong communities, and communities help make us resilient and feel part of something bigger than ourselves,” says Bester.
Start by waving and chatting, but there’s no reason to not take it further and organise a street braai.
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