Latest news with #oobaHomeLoans
The Citizen
23-05-2025
- Business
- The Citizen
Rentvesting: The property trend you need to know about
Rentvesting: The property trend you need to know about The concept is simple: Live where you love, invest where you can afford. Makes sense, right? That's the crux of rentvesting – buying investment properties in affordable areas while renting homes in suburbs where you want to live. South Africa's buy-to-let market has continued its upward trajectory since its resurgence in 2022. ooba Home Loans reported that 32% of all buy-to-let applications in Q1 '25 derived from the country's most expensive province, the Western Cape. This strategy, adopted by Gen Zs and early millennials, is particularly effective as renting remains cheaper than buying – especially when factoring in the costs of levies and municipal fees. Take a look: An average one-bedroom property on Cape Town's sought-after Atlantic Seaboard would cost a homeowner upwards of R2 million, which comes to R20,644 per month (over 20 years, no deposit at 11%). The average rental for a one-bedroom property starts from R12,000. That's a no-brainer, right? If you're looking at adopting a rentvesting strategy, start with these four practical tips from Only Realty Group: Do the math: Make sure that the property you are purchasing makes financial sense to rent out, and vice versa. Do not overinvest in a rental: While it makes sense to invest money (within reason) into upgrading a property you own, money spent on a rental is essentially a gift to your landlord. Understand the full implications of homeownership: Have a little savings account in case you go without a tenant for a couple of months so that you can cover the monthly costs, such as levies, municipal fees and bond repayments, in times of emergency. Remain objective: Do your homework before you buy that investment property and make sure to opt for an area that is in high demand and offers good returns. Do some research on what properties are selling for in various areas and what they are rented out for. For more on lifestyle, visit Get It Magazine.
The Citizen
21-04-2025
- Business
- The Citizen
Practical financial tips to fast-track the journey to homeownership
The recent Budget Speech underscored the ongoing challenges facing the country, many of which will impact consumers. However, Gavin Lomberg, CEO of ooba Home Loans, emphasises that a favourable interest rate environment helps ease financial pressure, making homeownership more accessible for aspiring buyers. Adding to this, Lomberg notes that while saving for a deposit is always the obvious answer, there are various other avenues that homebuyers can leverage to generate further savings in the long-term. 'If planned carefully and correctly, the journey to homeownership can be a rewarding one,' he says. 'By taking calculated steps under the guidance of trusted professionals, would-be homeowners can save tens of thousands on their home loan, making homeownership an affordable and attainable goal.' Pointing to the prevailing trend of building generational wealth, Lomberg adds, 'Homeownership goes beyond simply owning 'four walls' and a place to live. Today, aspiring homebuyers are leveraging property ownership as a wealth creation strategy for their families and future generations.' Five Extra Ways to Save Purchase properties under the new transfer duty limit Effective 1 April 2025, and subject to approval by Parliament of SA's 2025 Budget, the threshold for exemption from paying transfer duty has been raised by 10% from R1.1m to R1.21m, with all subsequent tiers raised by 10%. 'This adjustment is particularly beneficial for first-time homebuyers where the average purchase price currently sits at just slightly over the R1.21m mark,' says Lomberg, adding that it reduces the upfront costs associated with buying a home and will enable more South Africans to realise their dream of homeownership. Transfer duties are taxes paid to SARS, starting at 3% of the purchase price, depending on the price bracket. However, Lomberg emphasises that buyers are still responsible for conveyancing fees, bond registration fees and Deeds Office fees. Use a home loan comparison service to secure a better interest rate 'Rather than simply approaching your bank for a home loan, it's strongly advised to shop around for comparative quotes,' says Lomberg. 'A home loan comparison service like ooba Home Loans will negotiate with multiple banks on your behalf, ensuring that they compete for your business. In a competitive lending environment, this can translate into significant monthly savings.' As an example, Lomberg notes that ooba Home Loans' average interest rate for customers is currently prime minus 0.55%. 'If you were to accept a home loan of R 1m at the current prime lending rate of 11%, you would pay R10,332 per month, versus R9,950 with an interest rate of prime minus 0.55%. Additionally, homebuyers can choose to pay the higher amount each month to pay off their home loan sooner.' Access the First Home Finance government grant The First Home Finance grant is a subsidy for first-time homebuyers earning between R3,500 and R22,000 per month. 'This government subsidy can either be paid towards a home loan or can be allocated towards a deposit,' explains Lomberg. To qualify, applicants must be: South African citizens living in South Africa. Not have received this housing subsidy before. Be married, cohabiting, or single with financial dependents. Be over the age of 18. Not have previously owned a residential property. The subsidy amount ranges between R30,001 and R130,505, depending on income and affordability. Take advantage of attractive bank discounts and incentives In a competitive lending environment, South Africa's major banks continue to attract buyers with special offers, competitive interest rates and other discounts. 'Each bank's offering differs, but homebuyers can benefit from incentives such as discounts on bond registration costs and an additional discount in their home loan interest rate when moving their primary banking account to the approving bank,' says Lomberg. Buy-to-let as a path to property investment For those looking to enter the property market, a buy-to-let strategy can be an effective way to start building generational wealth. 'Rather than living in their newly purchased home, the homebuyer rents it out while continuing to rent elsewhere or live with family or friends.' Known as 'rentvesting', this strategy allows buyers to generate rental income to help cover their home loan and related costs. 'Over time, homeowners may choose to expand their property portfolio or move into the home once they have greater financial flexibility.' By leveraging these financial strategies, whether through lower interest rates, government subsidies or strategic investment choices, homebuyers can make the path to homeownership more affordable and achievable. 'With careful planning and the right financial tools, securing a home in 2025 may well be more attainable than you first thought.' Issued by: Kristly Bartlett
