Advice from the property owners

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Advice from the property owners

Postby kareem » Wed Aug 26, 2020 11:32 am

Hey guys im looking to purchase my first property and need some advice. Been in the Sig for too long now and got to a point where the house is really too small for us plus the 1 kid starting grade 1 next year.

Right now the Mrs and I are stuck between buying in Portlands and living a very comfortable life vs buying outside of Mplain for the sake of the kids and being close to town for work. We were initially looking in the market for something between R1000000 - R1.400000 but know that we will not be able to live a carefree, blaasing money go on holiday whenever we want type of lifestyle.

So this morning I was sitting outside smoking and staring into the sky when I thought what if I were to purchase said Portlands house at 10 years and sell after 5 before my eldest goes to hs. This way I'd be halfway with payments after 5 years, and I could sell and square up the bank then use the rest as a deposit for a house in Athlone.

I did some calculations based on a fix interest rate of 10% (Also please tell me if this rate would be impossible as I don't know how this works. I just heard based on credit score but I dont know with fixed rates).

Buying a house in Portlands for 20 Years 10%
Purchase Price: R800000
Years to Repay: 20
Interest: 10%
Monthly repayments: R7720
Amount Payable: R1852842
Total paid back in 10 years R926400

20 Years Athlone
Purchase Price: R1375000
Years to Repay: 20
Interest:10
Monthly repayments: R13269
Amount Payable: R3184571
Payment in 10 years R1592280 (This wont matter as I would plan to live there for longer)

Purchasing a house in Portlands for 10 Years
Purchase Price: 800000
Years to Repay: 10
Interest: 10
Monthly repayments: R10572
Amount Payable: R1268647
Total Paid 5 Years R634320

Looking at the 10 year figure I could slowly renovate then sell after 5 years, square up the bank and have an amount to use as a deposit for the next house.

Please correct me in my thinking if I am wrong with anything here as I want to learn as much as possible from you folk. I bought a car 3 years ago and regretted how I did it within months, so I don't want really want to make stupid mistakes when committing to something so big.
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Re: Advice from the property owners

Postby Tazzo » Thu Aug 27, 2020 10:20 am

you are on par with your thinking, however a house in 5yrs Athlone area won't cost R1375000.00 price might double.
so you'll end paying equivalent bond of M/plain after you pay diff into new house after 5yrs if you understand.
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Re: Advice from the property owners

Postby kareem » Fri Aug 28, 2020 8:59 am

Okay thanks bro makes alota sense yeah.
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Re: Advice from the property owners

Postby Reborn » Fri Aug 28, 2020 11:43 am

Go for the house in athlone the first time because the installment like you said will be R13296

To be able to pay of the house in mp in 5 years will cost basically R17k for 5 years and the value on the athlone property might have gone up as well so might not score, it might equil out to the same estimations or senario in 5 years time

If you can pay afford to pay 17k mp then you might as well pay the 13k in athlone at sit with access money of almost 4k and you fixed the price of the house in 2020 instead of getting the same house 2025 at in increased amount which might still cost 13k with the money you made on the mp house.
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Re: Advice from the property owners

Postby Reborn » Fri Aug 28, 2020 11:47 am

Same principle will still apply if you kept with the 10 year installment
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Re: Advice from the property owners

Postby FABULOUS » Sat Aug 29, 2020 1:58 pm

What Reborn mentioned is correct yes.

Good that you calculated on 10% interest rate as people will make the mistake that interest rates are low now but forgetting that this is quite not the norm and it will inflate when things get closer to normal economy wise.

Fixed interest rates are only guaranteed for 5 years at a time and the bank would inflate the interest rate when granting this. ( this does have a positive and negative effect) like now those with fixed rates do not enjoy the amazing low rates at the moment.

When you interested, get in contact with ooba home loans. No charge to client for services.
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Re: Advice from the property owners

Postby kareem » Mon Aug 31, 2020 7:05 pm

Thanks for the feedback guys I really appreciate it.

I went on standard banks website last week tuesday and saw they had a pre approval section which I filled out. I thought nothing would come of it as I never had to submit any docs, but then clearscore sent an email saying someone checked my details which im guessing is them.(still waiting on feedback)

I viewed my first house on Sunday which was a jas feeling no lies. Its a good fixa upper and compared to alot of other houses I feel this one ticked more boxes. Before the viewing I drove there 3 seperate occasions at different times to see how the vibe was and it was much better than most sections of Portlands where you see hoards of people standing and walking around. All the houses in the close seemed pretty "done up" so they must all be a working bunch. Another plus is that Its on the corner of a cul de sac so theres a big parking space opposite the house for family functions or typical khajats. Also hosts a flat which needs some love and can be turned into a nice workshop.

Now after the viewing I asked if anyone matched the full price given and estate guy says he cant say. I asked if he can give the highest bid and he said he cant say that too. He just told me to put in an offer and he will send everything to the owners for them to choose who they want to sell to.

I thought the buyer wants the highest price so shouldnt it be the job of the agent to inform us if someone put in a higher bid?

https://www.property24.com/for-sale/por ... /109035269

Anyways that's the property.
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Re: Advice from the property owners

Postby Reborn » Tue Sep 01, 2020 7:41 am

First also calculate how much you would spend to fix it up to what your wife would like it to be (happy wife happy life)
The money you might have to spend could have gone to a house in athlone, that's if you changed your mind to stay in athlone for 20years
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Re: Advice from the property owners

Postby 20V_LOVER » Tue Sep 01, 2020 8:13 am

Personally

I would only purchase a house in a new area if i was panning to sell.The return of your investment is greater in a shorter period of time. Obviously this also depends where you buy.

Every area has a cap amount and then the value will slowly increase over time unless something radically change in the area. I would rather purchase the house in athlone if it's closer to schools and work.

Saving on travelling time so you happier when you arrive at work saving on petrol just 2 of the benefits.

Investing in a house you have to be sure that you will see return on investment. Try and see what the other houses in the area was selling for 5 years ago and what they are selling for now. The agent trying to sell the property can supply this to you.

There is a few other things to check out for . Goodluck though i was looking for a place for almost 1 and a half years till i found my current one. Just don't settle rem you will be spending most of your time at that house.
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Re: Advice from the property owners

Postby psykes » Mon Sep 07, 2020 7:00 pm

kareem wrote:Okay thanks bro makes alota sense yeah.

Did you give change yet
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Re: Advice from the property owners

Postby mugenracer3 » Fri Sep 18, 2020 5:11 pm

Just some advise.

When calculating capital contributions, you won't owe 50% on your capital at 50% time. Usually at 14years you at 50%.


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Re: Advice from the property owners

Postby RATTIX » Mon Sep 21, 2020 2:08 pm

psykes wrote:
kareem wrote:Okay thanks bro makes alota sense yeah.

Did you give change yet


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