Rent, extend repayments, but don't sell Gerhard Kotzé

Many homeowners are under tremendous financial pressure to sell currently but the advice from the experts is to hold on to your existing property or at the very least stay in the property market.

Gerhard Kotzé, CEO of the ERA South Africa property group, says this may not be easy, what with the multiple whammies that have impacted on household expenses, but that it would be an enormous mistake to sell under pressure and take a bath financially.

“History tells us that property always bounces back. The danger is that if you sell now you may not be able to get back into property when the market improves and prices begin to rise.”

He says the “survival kit” for homeowners who find themselves in difficulty should address both property issues directly as well as household expense issues.

“For example a sensible trend we’ve picked up, is that of homeowners renting out their large properties and moving into smaller rental homes to cut their living expenses.

“Other options are to extend your bond repayment period or arrange to pay only the interest portion of your bond. Generally banks are surprisingly open to such arrangements, but it is vital not to miss any bond repayments to avoid undermining your credit rating.

“Moreover, you must avoid adding to your debt, especially if you opt to consolidate your debts into your home loan account in order to benefit from the lower rate of interest.”

Other suggestions from Kotzé include keeping a tight lid on your spending, selling off a second or third vehicle, trading down to a smaller car, shopping in bulk, working from home one or two days a week to cut transport costs and joining a lift club.

 

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