Read this before installing a hot tub in your lounge
Category Newsletter: Lead Article
Mistakes are funny things. In fact, mistakes often make for funny stories years down the line. And while popular wisdom will have us believe that we can learn from all our mistakes, it's not always great to have to learn from property mistakes because it's simply too costly.
"It's one thing to paint the exterior of your property in the Pantone Color of the Year but quite something else to install a hot tub in the middle of the living room on a whim. The point is that some property 'mistakes' cost you more in the long run than others," Steven van Rooyen, Principal at Leapfrog Milnerton, shares.
He adds that over the years he has noticed a trend around the property decisions people most acutely regret (it's not the hot tub!) and that they can be condensed to four main points.
In the spirit of learning from others' mistakes, Van Rooyen shares four property mistakes to avoid, or rectify right away.
Mistake 1: Never increasing your bond repayments
Paying as little as R500 a month extra into your bond can make a noteworthy difference to your finances in the long run by shortening the bond period.
"Another good approach is to commit to increasing your monthly repayments whenever your income increases and/or whenever you are paid commission, a bonus or similar to put a percentage of that money towards your bond," Van Rooyen advises.
A bond is a great savings vehicle and it pays to view it as such. The Additional Payment calculator available on BetterBond's website is a useful tool for checking how much interest can be saved by making additional payments, either once-off or on a recurring basis.
Mistake 2: Not prioritising regular maintenance
The short of it is don't wait until something breaks before you take care of it. Whether a small roof leak, a crack in the wall or a missing hinge on a kitchen cupboard, deal with maintenance issues as and when they occur, rather than allowing it to pile up.
"It's far easier - and cheaper - to deal with things as they crop up than to wait until it turns into a scenario where the whole ceiling has to be replaced," Van Rooyen says.
Home maintenance is not unlike servicing your car. It's something that has to be done at regular intervals and is ultimately about ensuring the longevity of the vehicle and the safety of its occupants. Same with property - it's nice to occupy a well-maintained property. And well-maintained properties tend to enjoy a higher value in the market.
Mistake 3: Renovating too soon
Even if you know exactly how you want to renovate a property, consider spending at least some time in it before you bash down that first wall.
It's not always possible but it you can live in the property for at least three months to see how you move in the space, where the best light is, which rooms are suited for which purposes, and the like, before you undertake renovations that cost an arm and a leg and that might not be 100% what you want.
Mistake 4: Overcapitalising
Property professionals are often asked by clients at what point an addition or renovation to a property crosses the overcapitalisation line.
"There's no one-size-fits-all answer but it depends on your long-term goal with the property. If you're looking to put the property on the market in the next three to five years then spending 25% of the value of the place on a kitchen renovation could qualify as overcapitalising. But if you're committed to the property as the home where you will raise your family and grow old then spending that amount of the kitchen is more about your own comfort and preferences, and thus 'worth it'," Van Rooyen explains.
A good rule of thumb is to look at the features and average cost of similar properties in the area. Similarly, a trusted property advisor can assist with an informed opinion about additions that add value that will reflect in the selling price.
Author: Leapfrog Property Group
