Property is one of the most significant investments you’ll ever make. Not only does it potentially provide you with a home, but it can offer you a source of rental income, or attract a profit if you decide to sell.
We consider whether prospective property buyers should always bear a potential sale in mind when making the decision to purchase, and if so, the factors they need to consider.
What’s the verdict?
According to Grahame Diedericks, manager principal in Midrand for Lew Geffen Sotheby’s International Realty, “Although purchasers may view the property as their home forever, they have to consider the fact that, in all likelihood, they will eventually sell.”
“Whether unforeseen circumstances prompt them to place the home back on the market sooner than anticipated, or they sell years down the line in order to upscale or downsize, it makes sense to try to realise the best return possible,” he says.
Factors to consider
It’s clearly prudent to think about the future when buying property. However, in order to ensure a profitable sale, there are specific aspects that you should consider.
Diedericks says, “When looking to purchase property, buyers should ideally take into account the key factors that will affect the resale value.” These are as follows:
- Area. The golden rule is to buy property in the best area you can afford, and preferably one that ticks boxes for a broad market. Remember, you are not only investing in an erf, but also in a neighbourhood.
- Proposed development surrounding the purchase. Although ongoing development is usually positive in terms of an area’s desirability, it’s always wise to check the nature of any developments that are planned. You probably won’t want a block of flats obscuring your view.
- Convenience. Generally speaking, buyers want properties that offer easy access to main thoroughfares and amenities. Homes near good schools, retail outlets, and other services like medical centres are always sought after.
- Complex/estate management. If you are buying in a secure estate or sectional title complex, you must ensure that it’s well-managed. Are the financials of the complex up to date, and have these financials been audited correctly? Is there a positive balance in the estate account to enable payment for any unforeseen problems in the complex?
- Security. Security is a priority for all buyers, in order to protect their own household, and to attract future purchasers. If you are buying a sectional title or estate property, bear in mind that the more secure it is in terms of monitoring and management, the better the reputation the complex will have and the more buyers it will attract.
Diedericks adds, “Of course, it’s also always prudent to check out the sale price trajectory and sale volumes for the last few years in the areas in which you are considering buying.”