Cius
Honorary Master
Closed my bond last month. Nedbank sent a statement yesterday stating I still owe them monthly repayments. Say what now? Anyways, apparently it takes like 3 months for them to give me the title deed after everything else is confirmed closed off.
As to the math of rent vs buy I have no idea how rent will ever work out cheaper unless you have very unlucky expenses on the main property. When I moved into the house I bought in 2010 rent on an identical unit was about R5500. My bond repayment was roughly that (I had a deposit). Over the years the rent has risen to R10 000pm (roughly 7% per annum) on the same size unit and I am now paying nothing having paid up my bond through diligently overpaying when I was able. I plan to live in this place for another 30 years at least and in that entire time I will still be rent free, bond free, and the renters will be paying each month with that rate going up each year by inflation or something close to it. Granted I will have some expenses on the house in that time but the chances it will exceed the 100K per year I am saving already is next to nil.
The best part is I had a spreadsheet tracking my bond the whole time. In total I paid over R920K over the 9 years I owned the house. I just did some math on what I would have paid to rent the house and to rent it for the same period I would have paid R910K. Granted I was also then paying levy, property tax etc but even then, its fairly close. If I add in the 20% deposit I saved and the levy/tax I will make that back within 2 years of my savings and after that its all direct savings, and now I am in the position where I am saving a huge amount each month by not having that expense on my budget, and I will have that saving for the remainder of my life (hopefully 40+ years).
Like I said, the math is fairly strongly in favour of buying a property. The only time it makes sense not to buy is if you know you are moving soonish as the cost of selling is high.
As to the math of rent vs buy I have no idea how rent will ever work out cheaper unless you have very unlucky expenses on the main property. When I moved into the house I bought in 2010 rent on an identical unit was about R5500. My bond repayment was roughly that (I had a deposit). Over the years the rent has risen to R10 000pm (roughly 7% per annum) on the same size unit and I am now paying nothing having paid up my bond through diligently overpaying when I was able. I plan to live in this place for another 30 years at least and in that entire time I will still be rent free, bond free, and the renters will be paying each month with that rate going up each year by inflation or something close to it. Granted I will have some expenses on the house in that time but the chances it will exceed the 100K per year I am saving already is next to nil.
The best part is I had a spreadsheet tracking my bond the whole time. In total I paid over R920K over the 9 years I owned the house. I just did some math on what I would have paid to rent the house and to rent it for the same period I would have paid R910K. Granted I was also then paying levy, property tax etc but even then, its fairly close. If I add in the 20% deposit I saved and the levy/tax I will make that back within 2 years of my savings and after that its all direct savings, and now I am in the position where I am saving a huge amount each month by not having that expense on my budget, and I will have that saving for the remainder of my life (hopefully 40+ years).
Like I said, the math is fairly strongly in favour of buying a property. The only time it makes sense not to buy is if you know you are moving soonish as the cost of selling is high.
