I closed off my presentation to the Maharishi Institute final year BBA students with my usual concluding remarks “ the quality  of the decisions you are going to make as you get into the world of work is going to determine the quality of life you are going to enjoy… Decide Well”. This was in 2014 and Sihle Sentiwe was one of the students in the audience

To buy a car first or to buy a home first?
In 2015, he was hired by a pharmaceutical company that I used to do money management workshops for and so the money management skills were reinforced. Months down the line he phoned me to say he is really tempted to buy a car because everyone was driving a car and he felt like a loser. I simply told him that if he thought owning his own property before buying a car made him a loser then I agreed with him.

A few months later, Sihle phones me again. This time, he was brimming with pride as he told me that he had just bought his first property. This was a small 2-bed house, close to his place of work so he could walk to work. I was really happy for him, and I knew how much courage it took him to walk to work while everyone was driving. He put a tenant in the 2nd bedroom and used the money to build his mother a house in the Eastern Cape. I could not believe it when he showed me the pictures. He is one of 9 children and the first graduate in his family so he has a lot of responsibilities. He also built backrooms at the back of his Midrand house and everything was going well for him financially. He still didn’t buy a car because of all the responsibilities. He was also planning to get married and his future father in-law insisted that he buys a piece of land in East London, near the airport, so he used all his extra money to buy the land

He resigned from his job and told me afterwards. I was upset with him but then again he is young and is bound to make mistakes along the way – who doesn’t?. I told him that he must not go around expecting anyone to cheer him, he must learn to be his own cheerleader if he is going to make it in this life. He struggled for a few months as he could not get another job and the rental income from the back rooms kept him going. After months of struggling, he managed to get another job but then the company could not keep him as Covid-19 hit and the company was not making much money. His tenants were also struggling to pay rent as they lost their jobs too.

In the end, he decided to sell his house and went back to East London. He made a profit of R160 000 from the sale of his house. He used this money to build these rental apartments in East London. He has built 3 of them and is already earning monthly rent and is busy building the 4th apartment.

Sihle’s rental apartments that he is busy building in East London, 3 of them already have tenants

There are many young people who bought cars before they bought property and some of them lost their jobs and lost their cars too. Many have moved back home with their parents, they have no car, no job, they have no money and most are blacklisted
 
If you want to know why I am excited about home ownership and you want to understand more about managing your home loan to your advantage, join us at the Webinar on the 6th of November
Some of the Topics

  1. Is this the best time to buy a home?
  2. STEPS to follow when buying a home
  3. Building or repairing your credit score
  4. How much will the bank lend me?
  5. What you should know about pre-qualifications
  6. When is it too late to buy a home?
  7. How do I prepare myself for buying a home?
  8. Can you buy a home when you are blacklisted?
  9. Should I buy a home first or a car first?

Cost of buying a home

  1. Do I qualify for FLISP? This is the Government subsidy for the first time home owner
  2. What are the legal costs of buying a home?
  3. Does everyone have to pay Estate Duty?
  4. What other one-off costs should I be aware of when I buy a home?
  5. What are the monthly on-going costs of owning a home?
  6. How much will the monthly home loan repayments be?
  7. What interest rate will the bank give me? Why it is important to get the minimum interest rate possible

More topics to be mentioned with the next newsletter