Down­size with­out tears

George Herald - Private Property - - Property News -

With their chil­dren grown and leav­ing for univer­sity, jobs abroad or homes of their own, an in­creas­ing num­ber of peo­ple in their 50s and 60s are down­siz­ing from big fam­ily homes to smaller, lower main­te­nance prop­er­ties in se­cu­rity com­plexes - and if this is on the cards for you this year, you may be dread­ing the thought.

"Even own­ers who have been plan­ning their move for years can find it ex­tremely dif­fi­cult to start pack­ing when the time fi­nally ar­rives to do so, and usu­ally that's not be­cause they are scared of get­ting older, but be­cause fam­ily homes are as­so­ci­ated with so many mem­o­ries and emo­tions," says Rudi Botha, CEO of Bet­ter­bond.

"In ad­di­tion, even when emp­tynesters can see the fi­nan­cial ad­van­tages of down­siz­ing, they often worry that it will also en­tail a dras­tic change in life­style. And then, of course, there is the hard work of the move it­self, es­pe­cially when it means hav­ing to sort through 20 or 30 years' worth of pos­ses­sions to de­cide what to pack and take and what to sell, give away or dis­card. How­ever, we daily meet clients who are do­ing this, and have learned that there are quite a num­ber of pos­i­tive as­pects to fo­cus on that can make the change much eas­ier and the move some­thing to ac­tu­ally look for­ward to."

Main­te­nance

The first of these, he says, is the re­lief from the high costs of main­tain­ing a large prop­erty and keep­ing it in good con­di­tion. There is also less risk of hav­ing to re­place or re­pair ex­pen­sive com­po­nents such as the roof, wiring or plumb­ing. "It's im­por­tant to re­mem­ber that your home isn't get­ting any younger ei­ther, and that a prop­erty that gets run down be­cause you no longer have the en­ergy, agility or in­cli­na­tion to keep up main­te­nance will be harder to sell if you de­lay your move."

Even when empty-nesters can see the fi­nan­cial ad­van­tages of down­siz­ing, they often worry that it will also en­tail a dras­tic change in life­style.

Life­style

Sec­ondly, a smaller, more mod­ern home can ac­tu­ally mean a bet­ter life­style, be­cause it frees up time as well as money for other en­deav­ours, such as hob­bies, travel and study or for some of those lux­ury fea­tures you've been promis­ing your­self for years. You'll also have the op­por­tu­nity to choose a home with greater se­cu­rity if you wish, or maybe one that doesn't have stairs and will be eas­ier to get around as you get older.

Ease of tran­si­tion

Botha also notes that the younger you are when you make the move, the eas­ier the tran­si­tion is likely to be. "There is much less chance that you will have to make a forced sale due to changed cir­cum­stances such as ill health, and a much greater chance that you will make new friends and de­velop new in­ter­ests in your new lo­ca­tion. In ad­di­tion, if you plan ahead and con­trol the tim­ing of the sale, you should be able, with the help of a knowl­edge­able lo­cal es­tate agent, to make your move when the mar­ket is in your favour.

“This may mean you pay more for your new home than you would in a softer mar­ket, but if you're sell­ing a more ex­pen­sive prop­erty in the same mar­ket, you should come out well ahead fi­nan­cially.”

In­ter­est rates

"And then of course if you ap­ply for your new home loan through Bet­ter­bond, we will en­sure that you get the very best in­ter­est rate avail­able, which will make your move even more fi­nan­cially ad­van­ta­geous. At the mo­ment, we are find­ing that the av­er­age vari­a­tion be­tween the best and worst rate of­fered on an ap­pli­ca­tion is 0,5%, which could trans­late into very sig­nif­i­cant sav­ings for the bor­rower, at no cost for our ser­vice. On a loan of R1,5-mil­lion, for ex­am­ple, the po­ten­tial sav­ings amount to more than R120 000 worth of in­ter­est over the 20-year life­time of the loan, plus some R6 000 a year off the home loan in­stal­ments."

Bet­ter­bond cur­rently ac­counts for more than 25% of all new mort­gage bonds reg­is­tered in the Deeds Of­fice an­nu­ally and its statis­tics are a re­li­able in­di­ca­tor of the state of South Africa's res­i­den­tial prop­erty mar­ket.

Is­sued by Bet­ter­bond

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