When it comes to owning a home, it’s not just about making monthly bond repayments, says Adrian Goslett, CEO of Remax, who points out that home maintenance is an intricate part of home ownership.
“There are several benefits to owning a property such as the potential of having an asset that increases in value over the long term.
However, with the advantages comes the responsibility of maintaining the property to ensure that it reaches its full investment potential,” says Goslett.
“Affording a property is not just about being able to meet the bond requirements, but also about being able to set aside some money for when the unexpected happens.”
According to Goslett, while most major issues or damages caused by fire, flooding and natural disasters should be covered by home insurance, the general up keep and maintenance of the property is not.
“Insurances policies do vary from company to company, however while most will repair a roof if it has been damaged from a fire or other disaster, they won’t cover it if it is just old and in need of repair – this will be for the home owner’s account.
A new roof can cost a lot of money and could be a huge financial burden if the home owner has not set aside money in some kind of a contingency fund,” says Goslett.
He notes that as a home owner, it is essential to have an emergency fund to avoid incurring additional debt to pay for home maintenance and unforeseen repairs.
“If possible home owners should aim to save at least 1% of the value of the home to cover the maintenance costs for a year.
So on a home valued at around R1 million, this would translate to a minimum savings of approximately R10 000 per year to cover maintenance costs and any repairs needed.
If the money is not used during the year, it should be kept and added to the next year’s savings to ensure that the home owner is covered in the event of a major expense,” advises Goslett.