5 Ways to be a better property owner in 2023
Category Newsletter: Lead Article
In much the same way that we make resolutions about your health and wealth (Lose weight! Save money!), it pays to also commit to doing things that add to the long-term value of your property.
1. Over-service your bond
A bond is a serious long-term financial commitment, which means the sooner you pay it off the better for your financial wellbeing, thanks to interest you'll save. Paying more than the monthly minimum into your bond is doing your future finances a huge favour.
"Consumers are under huge financial pressure at the moment but remember that as little as R500 a month extra into your bond can reduce the overall repayment period by a couple of years," says Skoko Sebola, Principal at Leapfrog Midrand.
He explains that savvy property owners and investors view a bond as a savings vehicle, which it ultimately is, because anything extra you put into it saves you money over time.
An online tool like the Additional Payment calculator on bond originator BetterBond's website is useful for calculating the interest that can be saved by making additional payments.
What's more, the sooner you pay off your bond the sooner you're able to leverage that property and/or income to acquire more property to build or expand a portfolio.
2. Negotiate a better interest rate on your bond
One of the fundamental factors determining the favourability of a bond is the interest rate that it is tied to. But the good news is that that 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" Sebola 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," Sebola 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 definitely worth the effort when you consider the savings.
3. Ask for an evaluation
Contact a trusted property advisor for a professional evaluation of your property this year. Evaluations are typically done free of charge and will give the market-related value of your property, comparable to properties of a similar size and in a similar condition in the area.
"Our evaluations consider the size, condition and general market appeal of the property, as well as market trends more broadly. It's a great way to see how your property holds up against others in the market," Sebola shares.
Evaluations needn't take more than 30 minutes and is a handy tool for determining what could be improved to increase the value of the property. "Clients often simply find it interesting to see how the value of a property has grown over a given period. Knowing the value of your property can also aid you in your personal financial planning," Sebola says.
4. Maintenance matters
A well-maintained property is an important part of managing your property and protecting its future value.
"My own golden rule for property maintenance is simply to keep your hand on things. Fix things as they break, give the interior and exterior a fresh coat of paint every few years, keep the garden neat and tiny and make sure the electric and sanitary fittings are in working order," Sebola says.
Regular maintenance is the best way to avoid that dreaded situation where there is so much maintenance that it becomes prohibitively expensive to do any of it.
If you need additional motivation in this regard bear in mind that well-maintained properties more often than not command a higher price on the market, thanks to the better value perception it exudes.
5. Nice neighbours
A well-maintained property in a good neighbourhood is property market gold! This year, commit to making your neighbourhood nicer by being a good neighbour yourself.
Introduce yourself to your immediate neighbours and make a note of having a quick chat when you see them out.
"Good neighbours ultimately add to the appeal of a property because it makes the neighbourhood more desirable to buyers and investors," Sebola explains.
A friendly neighbourhood atmosphere is an important part of what makes an area a community and communities in turn allow people to feel safe and secure. It starts with a wave.
Author: Leapfrog Property Group
