I recently drove past a big “APARTMENTS FOR SALE” sign at a newly developed housing area. Being in my thirties, buying my first home was already in my thought process, and so was wondering what the secret was.
Trying to figure it out all on my own was proving to be a Debbie Downer. So I reached out to friends who are already homeowners for advice.
Here’s the wisdom I gleaned from them that’s too good not to share with you. So that when the opportunity arises to buy your first home in Botswana, it finds you ready.
(Thank you Seeff Botswana, for supporting us in sharing Botswana’s home stories.)
How Old Were You When You Bought Your First House?
I was 24. This was six years ago.
At the time, I didn’t have any plans to buy a house. I was looking for a place to rent which was really frustrating. Trying to find a place to accommodate my two brothers and me.
Within Gaborone, the places were either too small or very expensive. Other places that were available weren’t in safe neighbourhoods. Forcing me to look outside of Gaborone for places within my budget.
This was also a challenge because the cheaper the accommodation was, the further away out of town it was. I didn’t have a car at the time so the commute was going to be expensive.
What Made You Switch From Looking From A Place To Rent, To A Place To Buy?
Out of frustration, I asked one of my clients who worked at a housing company to help me look for a cheap place to rent. He asked why at my young age I wanted to accumulate debt, by paying rent. His suggestion was that I invest in a home rather than pay rent. He then got me in touch with a sales agent who told me about houses that were on sale in Phakalane.
At 24 I didn’t think I could afford a home in Phakalane. The salesperson informed me that the area had issues with water supply. So houses were priced lower than their market value. We followed up the conversation with a meeting to view the vacant homes.
The prices varied according to the design and plot size. There was a house that my heart was set on. But an offer had already been made. The agent advised me to either wait out the sales period or keep looking at more houses. As it would turn out, two months later the sales agent called me after the person had dropped their offer. The house I had fallen in love with was now available.
Could You Afford To Buy A Home At The Time?
Well, I didn’t think so. The agent said something to me that changed my perspective of why buy a home instead of renting.
At the time, my rent was P2 500 and the mortgage would cost me P3 800. He explained to me that in retrospect the P1 300 differential was what I would be paying toward investing in my own home.
I didn’t immediately jump on the offer. His advice was to make an offer on the house and take time to think about it. When the offer was almost due to expire he contacted me, curious about why I hadn’t made the purchase.
I let him know that I didn’t think I could afford the mortgage. His response was to remind me that rent’s always going to look better since it’s more affordable. But the logic is to treat the differential as an investment. I’m so glad I listened because a house that I bought for P800 000 is now worth P1.3 million. Even though I struggled in 2014 and was barely surviving in 2015, I have no regrets.
What Were Your Biggest Challenges After Buying The House?
I had miscalculated the cost of the mortgage. I thought the only cost was the mortgage premium. Little did I know I would have to account for valuation fees, legal fees and bond registration. Luckily enough I didn’t pay for transfer duty. I then had to take a personal loan to pay for all the extra fees. Because I was a bank employee, I got a special rate on the mortgage as an employment benefit. But benefits are taxed, so my payment on tax increased. Decreasing my disposable income.
This taught me that buying a home isn’t something you do overnight. During the 8 months where I was searching for a house and making a decision, what I should’ve done was start to save up. So that when I did get the house the adjustment wouldn’t have had such a big impact on my life. And I wouldn’t have had to apply for a personal loan to afford the extra fees.
My advice is to start preparing to buy a house now. Even if you’re planning on buying a house a year or so from now. Let’ say you’re planning on buying a house that’s worth 1 million, approach the banks now for calculations. What you can do is place a stop order on your account. To mentally prepare yourself for the initial debit and adjust your lifestyle to paying off a mortgage.
The stop order will also be a pay-it-forward to cover your legal fees, bond registration, house valuation fee and other smaller costs that may arise. Especially if you’re buying a house that’s not newly built.
When I started working, I stayed at my family home for a while. I hadn’t thought to save up for furniture and stuff for the house. It’s a huge cost to start from scratch with no savings.
Have You Done Any Renovations Since Then? How Did You Afford It?
Yes. I now have a pool, an outdoor entertainment area, a garden, and I built a wall around the property which was once fenced. Increasing the house in value.
4 years after I bought the house I had a salary increment. The bank rate also dropped and the mortgage payment became more comfortable. I kept my monthly payments the same, to pay the mortgage off faster. I could then afford a loan to renovate the house.
I did an equity release on the house to cover my other debts, bought a car, and made a down payment on my second home. Remaining with only one debt which was the mortgage. By this time I’d learned so much from my first home that buying my second home, I had savings, a plan, and a tenant in one of the houses for extra income.
What Are Your Thoughts About Buying A “Dream” Home?
It depends on where you’re at financially. The home that I have now with the pool and the entertainment area, is the home I wanted and dreamed of, but couldn’t afford.
I bought the home I was ready to afford and worked on it until it was my dream home. We all have to start somewhere. My somewhere is not the same as your somewhere and that’s okay. Own a house that can grow into your standard. The most important thing is affordability.
How Old Were You When You Bought Your First House?
I was maybe 25 or 26. In the last 5 years, my husband and I have since outgrown our first house. And about to finish building our second home.
With our first house, we were dating. Our responsibilities, desires, and goals have since changed. We didn’t have a family in mind so the first house didn’t have much space for kids, to entertain friends, have pets or visitors staying over without feeling cramped.
What Should Someone Consider When Buying Their First Home?
When looking for a home look at your 5-year plan and goals. Ask yourself what you plan to do with the house in the next 5 years and build or purchase around that.
Do you plan on getting married? Having kids? Now having a toddler we know they’re very active and want to play outside. We’re planning to have another child and building our second home with that in mind. So ask yourself if the house big enough to cater to the needs of a growing family.
Or if you’re single and looking for a house, are you looking to entertain friends, do you have enough yard space? And is there enough room to host family and so on? Do you want to start a business from home and is there space for that? These are just some of the things to consider.
What Advice Would You Give For Anyone Looking To Buy A Home?
The price of a home largely depends on location and what value you would get from living in that area. For example, a prime location has easy access to shops, schools and so on. Plot size and house finishings also affect the selling/buying price. And if banks will consider this as a good investment.
The important thing is to grow your income and have a good record of your finances. If you have a side hustle, keep a record of those earnings as well as extra income.
Buying a home when you’re older does affect your mortgage rate as you will have less time to repay the bank. So they do consider age. The key is to contact your local banks. Find out what packages they offer, and which bank would be a good fit for your unique needs.
There you go. If you’re thinking about being a homeowner, I hope this inspires you to start making the right decisions, to help you achieve this life goal. For more information contact local banks to find out what packages they have available. Consider talking to a property agent to guide you along the process.
Thank you, Ladies, for this brilliant advice! A BIG thank you to Seeff Botswana for supporting us so that we can continue to share these inspiring local stories.
We would love to hear from you in the comments on what advice you have for first-time homeowners. Remember to share this with a friend.
** This article is proudly sponsored by Seeff Properties Botswana**
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