Advice on buying a development property

tsume

tsume

The Pervy Sage
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So this is my first venture in to buying property and I'm really scared of the unknown.
at the beginning of the year I thought of starting to prepare to buy a place but time has not been in my favor. The other day I came across a nice property development and I want in. So here I am, wanting property but haven't started any of the pre-requisites in my personal being to line everything up.

Things I've heard I must do is get pre-approval, make sure I understand the rate levies & taxes, make sure my life insurance covers the bond. What other things would I need to when looking at buying the development property?
 
Is this to live in yourself, or to rent out?

Life insurance doesn't always need to cover the bond, depends on what the banks wants from you. My most recent home loan did not require it.

Oh, if possible check other houses the developer has made. Ones that are 5-10 years old should give a good indication of the quality you can expect.
 
As Archer mentioned, look at other properties the developer has built.

No such thing as pre-approval. Find a place you like, ask for OTP. Give to bank. Get approved and wait 3-4 months.

Mind me asking where this is? Renico development?
 
Pho3nix said:
As Archer mentioned, look at other properties the developer has built.
Click to expand...

Do as much research as you can on previous builds. The following issues are on complexes built near me and are clearly visible from the street.
- Damp
- Inadequate stormwater drainage in the complex.
- Large cracks in plastered walls - could be an indicator of poor foundations.
- Bad geyser installations (the complex down the road from me has external roof mounted geysers which have warped out of shape - not sure how they passed SABS)
- Warped roof trusses. Again not sure how these pass SABS standards
- Building with inferior/cheaper quality bricks on non-supporting walls.

That's just the stuff you can see from the street and if you see this or anything else that concerns you - walk away. It will end up costing you a lot of money to fix in the future.
 
Pho3nix said:
As Archer mentioned, look at other properties the developer has built.

No such thing as pre-approval. Find a place you like, ask for OTP. Give to bank. Get approved and wait 3-4 months.

Mind me asking where this is? Renico development?
Click to expand...

Reeflords, Royal Reef

http://www.reeflords.co.za/royal-reef/

I'm not really sure about Reeflords previous developments.
 
Napalm2880 said:
Do as much research as you can on previous builds. The following issues are on complexes built near me and are clearly visible from the street.
- Damp
- Inadequate stormwater drainage in the complex.
- Large cracks in plastered walls - could be an indicator of poor foundations.
- Bad geyser installations (the complex down the road from me has external roof mounted geysers which have warped out of shape - not sure how they passed SABS)
- Warped roof trusses. Again not sure how these pass SABS standards
- Building with inferior/cheaper quality bricks on non-supporting walls.

That's just the stuff you can see from the street and if you see this or anything else that concerns you - walk away. It will end up costing you a lot of money to fix in the future.
Click to expand...

Question on this. Is this not stuff Estate insurance would sort out? When I was looking, that's what I was told...
 
The rule from from FNB, if your bond is less than R1000 000 you need life insurance. If it is more than that, you dont.

Its quite scary to buy in a new estate like this being developed. You dont know who the managing agent will be (meaning, in time, will there be special levies).

Things to take into account, rates and taxes, levies, your bond (what if the interest rate goes up by 4%, will you still be able to repay the bond ? (that is a very bad scenario, but it could happen).

Because of the events in SA last week ... a resession is strongly our way, and a downgrade also on the cards now

I might sound negative, but do your homework. A pre-approved bond is the first step (look what you can qualify for)
 
tsume said:
mmmm....
Click to expand...

And STAY CLEAR FROM Chinese developments. A few estates was made in Midrand (the owners is losing money badly).

If something breaks, you must import it via the developer (From toilets to front doors)
 
^^ Once found a replacement front door at a china mall/centre for about 2k. Developer quoted 13k for it.
 
Also, with the current financial sitution of the economy when is it best to actually buy a place? I've heard that it will be more difficult to get a bond now.
 
tsume said:
Also, with the current financial sitution of the economy when is it best to actually buy a place? I've heard that it will be more difficult to get a bond now.
Click to expand...

Honestly, if you have the cash plus some wiggle room if the interest rate goes up 1-2% then you are ok.

Getting more debt will never come at the right time. Been delaying buying for so long and prices have just kept going up while I dilly-dally.

As for the bond.. where did you hear that?
 
You can buy my place in Honeydew if you want in October.
2 bed 2 bath, open plan living and dining, ground floor patio with garden and built in braai. 2 car ports.
R800k. Tenant I have currently pays R7000 a month excl elec.
 
Pho3nix said:
Honestly, if you have the cash plus some wiggle room if the interest rate goes up 1-2% then you are ok.

Getting more debt will never come at the right time. Been delaying buying for so long and prices have just kept going up while I dilly-dally.

As for the bond.. where did you hear that?
Click to expand...

Meant to say with the interest increase it will be difficult for people to afford a bond
 
80 sqm for a 3 bed 2 bath is a matchbox. At R18k/sqm with such low finishes is pretty expensive
 
With the year coming to an end, I thought about revisiting this thread. The year has gone by, and I haven't bought a property. Seems this is much more difficult adventure then it appears to be when I see people make the move. The area I want to stay in versus the type of place (not too luxurious, but also not a dump) versus what I can afford are in different worlds. I somehow focused some attention on Greenstone & Eastleigh, given their access to the highway. Greenstone has gone way out of my budget, while Eastleigh is in budget but some of the places are very old style. Looked at the new development in Mooderfontein, and although its awesome...it's way too pricey.

So I'm left to think, will I somehow find a property to buy next year or by this time still be left searching again.
 
tsume said:
With the year coming to an end, I thought about revisiting this thread. The year has gone by, and I haven't bought a property. Seems this is much more difficult adventure then it appears to be when I see people make the move. The area I want to stay in versus the type of place (not too luxurious, but also not a dump) versus what I can afford are in different worlds. I somehow focused some attention on Greenstone & Eastleigh, given their access to the highway. Greenstone has gone way out of my budget, while Eastleigh is in budget but some of the places are very old style. Looked at the new development in Mooderfontein, and although its awesome...it's way too pricey.

So I'm left to think, will I somehow find a property to buy next year or by this time still be left searching again.
Click to expand...
Why development property? Trying to save on the transfer fees?
 
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