Owning property is a great way to invest your money as it ensures that you, and the generations to come after you, have a place to call home.
Living in Cyril Ramaphosa’s economy has made it difficult to purchase things that were once quite manageable. I have been renting on-and-off since my varsity days and have been renting full-time since December 2018. What I can tell you without a shadow of a doubt is that I find renting quite a waste of money. Although I want to purchase property, I fear that I might not qualify for a bond at the bank because I work on a contract-basis.
My mother told me about an arrangement called rent-to-buy. With this arrangement, I enter into an agreement with the property owner that I have intentions of buying the house, so my rent money operates in the same fashion as monthly bond payments. How this agreement operates depends on with whom you enter it.
If you are seeking to solicit this agreement via a rental agency, you would need to approach the bank so that it can give you a deposit loan as surety to the property owner that you will not abandon the agreement along the way. The banks call this ‘working on future income’. However, for one to qualify for this, you would to own at least two properties before the banks consider your application.
However, should you enter into this deal directly with the property owner, you would need to visit a notary, who would draw up a binding contract of agreement between yourself, the potential buyer, and the property owner. This agreement ensures that you can own the property which you’re renting, after having paid off the stipulated amount. What I like about this agreement is that issues like maintenance of the property remain the landlord’s, until the house is transferred to your name. This way, you enjoy the benefits of being a home owner without the expenses.