Buying a home means more than just paying the bond
Buying a property is exciting, but it comes with many hidden and essential costs, both upfront and ongoing, as well as some that may be unexpected. Planning properly will help you avoid nasty surprises.
Essential upfront costs
There are costs you will have when you buy and move in:
- Bond initiation fee: This fee is paid to your loan agency. You can include it in your bond, but it is preferable to pay it upfront.
- Municipal rates and taxes: You will not receive a bill immediately, but charges start or registration day. Therefore, set aside money each month to cover this large first bill.
- Water deposit: If you do not have prepaid water, expect to pay a R1 000 - R2 000 deposit to your municipality.
- Homeowner's cover (HOC) and life cover: This is required if you have a bond.
- Levies: When you live in a complex or estate, you must pay levies for security, upkeep, and services, plus a possible deposit. The first month's levy is usually due when your house registers.
- First prepaid utilities: Buy your first prepaid electricity and water units, if applicable.
- Moving costs: Budget for a moving truck or company. Remember that peak periods, like month-end, tend to be more costly.
- Internet: There are different contract options available. Ensure you allocate and adequate budget for a suitable contract.
- Bond cancellation fee: Applies if you need to cancel an existing bond.
- Miscellaneous: Small but essential items, like multi-plugs, extension cords, cleaning supplies and curtains. These accumulate quickly!
Optional expenses
These aren't strictly required, but they are smart to consider:
- Home contents insurance: a wise choice for added peace of mind, particularly to protect valuables and appliances damaged due to power surges.
- New furniture and appliances: Buying new items is exciting, but avoid overspending your budget right away.
- Curtains or blinds: Check the type of rails before moving in. Ensure you have the correct size and type.
- Satellite TV: To get DStv, you need to install a dish and register with a provider.
- Garden: Starting a garden can costm more than you think! Plan for it, favour local, drought-resistant plants, and source cuttings from friends if possible.
- Additions and alterations: The can include paving around your house to assist with water draingage.
Monthly essentials to include in your budget
These are ongoing costs you must plan for every month:
- Bond repayment: Your bond is your priority. Never miss a payment!
- Rates and taxes: Pay on time to avoid municipal penalties.
- Levies: Pay on time to maintain the quality and security of your complex/estate.
- Prepaid electricity and water: Keep topping up as needed.
- Internet and satellite TV (if applicable): Keeep your connection ongoing.
- Garden care: Budget for seasonal garden work and regular upkeep.
- Home maintenance: Things break! Plan for minor repairs and touch-ups.
- Fuel If you have moved further from work or school, adjust your transport costs.
- Annual increases: Remember annual municipal rate hikes (these are announced in early July each year).
Always save for surprises
Maintain an emergency fund for unexpected expenses. Minor issues arise when you move in, from fixing a leak to replacing a light fitting.
A well-managed budget results in fewer surprises and greater peace of mind. Buying a home is the first step. Managing it wisely keeps it your happy place.
