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TO BUY OR TO RENT,
THAT IS THE QUESTION
Most financial advisors are agreed that
it is wise to get into the property market
as soon as possible in order to start paying
off your own bond rather than pay rent and
pay off someone else's bond.
However the property boom in South Africa
over the last few years, which has pushed
house prices sky high, has made buying a
home increasingly difficult for many
first-time buyers. Angelo Haggiyannes,
director of Auto & General Insurance, says
that while it has always been relatively
common for couples to pool their income and
buy a property together, now friends are
doing the same in order to be able to enter
the property market.
He says, "First time buyers must be aware
that buying a home has many hidden costs,
insurance being one of them, along with
legal fees, registration costs and even
moving costs. The owner of a bonded house is
legally obliged to get House owners'
Comprehensive Insurance, which covers the
property as security for the home loan in
the event of fire, flood or any other
disaster that damages the structure and
fixtures. In addition, whether you are
buying or renting your home, household
contents insurance is a must today. The risk
of burglaries remains high and many
uninsured victims of theft find themselves
in real financial trouble and unable to get
back on their feet after losing their
household possessions."
However, if you can easily afford your
bond repayments and if you manage to pay off
your bond quickly, your investment will
become a true investment - hopefully paying
great dividends. For one thing, owning a
home, with no monthly bond repayments to
cough up for, is the ideal situation for
anyone.
The "To Rent" camp believes that renting
can provide you with a more cost-effective
option, particularly if you are young and
need flexibility to travel or move around.
Furthermore, buying in the area of your
choice may be prohibitively expensive, so
renting provides you with the option of
living in your ideal choice of
neighbourhood, until you can afford to buy
in the area or one similar. Says Haggiyannes,
"According to an article published on
property24.com by Neville Schaefer, CEO of
national property manager, Trafalgar, the
rental market is continuing to develop
worldwide. This provides tenants with
greater variety of choice and increasingly
competitive rentals."
Haggiyannes concludes, "Ultimately, the
decision to buy or rent is an extremely
personal one, and one of the most important
financial decisions you can make. Whichever
option you decide upon, it is essential to
make sure that you know, upfront, what the
hidden costs are, what the benefits will be
and what could possibly go wrong. If you
ensure that you do your homework properly,
your decision should be financially sound
and ideally suited to both your pocket and
your lifestyle."
Established in 1985, Auto & General
Insurance is a leading provider of
short-term insurance solutions, with a core
focus on innovative administrative
efficiency and a service-orientated
approach. For more information on Auto &
General, or to read the full Bill of Rights,
please visit www.autogen.co.za.
DISTRIBUTED ON BEHALF OF AUTO & GENERAL
INSURANCE COMPANY LIMITED BY CHILLIBUSH
PUBLIC RELATIONS. FOR FURTHER INFORMATION
PLEASE CONTACT: Azelle Evans at ChilliBush
on (011) 646 7152 or e-mail azelle@chillibush.co.za
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