Hey millennials, listen up!

If you’re in two minds about buying property, consider this.

12 September 2019 | Economics

About 30 years ago, purchasing property was a no-brainer. However, millennials have been taught to question everything, including whether real estate is the best investment to make.
According to REMAX’s Adrian Goslett, while certain things change over time, others remain the same – the investment value of property being one of these constants.
“For those who are able to afford it, purchasing property will never be a financially irresponsible thing to do. I would caution millennials not to abandon the idea of owning property before they have thoroughly investigated its long-term benefits,” he says.
To put some of their concerns of property ownership to rest, Goslett answers some of the most commonly asked questions posed by millennial buyers:
1)Isn’t it better to rent?
“To answer this, millennial buyers need to factor in annual rent escalations and calculate whether they will be able to continue to afford the property over time. They also need to consider that rent, like interest paid on a home loan, is purely an expense. If you took a home loan of N$1.6 million and pay around N$15 000 per month at a blended interest rate of 10%, you will have paid roughly N$1 420 000 in interest at the end of ten years. By comparison, if you rented a property worth N$1.6 million for N$8 000 per month, applying 9% annual escalation in rent, you will have paid roughly N$1 460 000 in rent by the end of ten years. Not only are you spending more on rent than you would have been spending on interest on a home loan, you also have nothing to show for that money. Moreover, in ten years’ time, your N$8 000 rental will now cost you N$17 000 per month, which is N$2,000 less than the instalment if you were paying off a home loan.”

2)How do I afford it?
Goslett says the cost to enter the real estate market does make owning their own home difficult for younger buyers. “However, with enough financial discipline and planning, younger buyers will be able to afford the cost of entry. I would recommend that first-time buyers speak to a financial advisor to work out an investment strategy that will help them afford to purchase property in the mid- to long-term.”
3)Will I still be able to travel?
There are several options, such as short-term letting and Airbnb available to homeowners who are out of the country for extended periods of time, Goslett says. He suggests that homeowners can make use of a reliable property manager to collect payments and be available to address any maintenance issues a temporary tenant might come across while the homeowner is out of the country. “In terms of being protected against damages, certain homeowner’s insurance policies may provide cover if you rent out your home occasionally, while others will require you to take out a separate landlord’s insurance policy.
“While purchasing your first home does come with its own challenges, the long-term benefits more than make up for it. If you have any questions or concerns regarding homeownership, speak to a real estate advisor to help you understand the pros and cons of purchasing property,” Goslett concludes.

Similar News


Home budgeting lessons from lockdown

1 week ago - 22 July 2020 | Economics

If lockdown has taught us anything, it is the importance of sticking to a budget and having emergency savings available should the unforeseen happen.This can...

How agent fees can lead to a bigger profit

3 weeks ago - 08 July 2020 | Economics

The impact of Covid has been felt across all sectors of the economy, resulting in high levels of unemployment and reduced household income levels.Selling a...

Budget and more in the spotlight

1 month - 18 June 2020 | Economics

Finance minister Iipumbu Shiimi said that he is content with the response he has seen from all Namibians from both the private and public sector...

Rental market rebounds after two years

2 months ago - 18 May 2020 | Economics

The FNB Rental Index for the first quarter of 2020 shows that overall residential rent prices rebounded from a two-year negative growth territory.However, FNB Market...

Pay less for motor insurance

3 months ago - 17 April 2020 | Economics

In response to the Covid-19 pandemic, Hollard Namibia announced a 20% premium reduction to all motor policyholders for the month of May 2020.“This aims to...

Repo rate lowest yet

3 months ago - 16 April 2020 | Economics

The Monetary Policy Committee (MPC) of the Bank of Namibia (BoN) announced a reduction of the repo rate by 100 basis points to 4.25% in...

Another N$5 million for pandemic

3 months ago - 14 April 2020 | Economics

The Capricorn Group announced a N$5 million contribution to the nationwide efforts to help address some of the challenges posed by the Covid-19 pandemic.Specific areas...

Suspending income tax not an option – Shidhudhu

3 months ago - 14 April 2020 | Economics

Suspending income tax to ease the burden of Covid-19 is not an option at this stage, says ministry of finance spokesperson, Tonateni Shidhudhu.His statement comes...

RFLAUN pension payouts to continue

4 months ago - 27 March 2020 | Economics

The Retirement Fund for Local Authorities and Utility Services in Namibia (RFLAUN) has implemented operational measures to promote business continuity during the Khomas and Erongo...

‘Retain employees’ - Shinguadja

4 months ago - 26 March 2020 | Economics

The executive director in the ministry of labour, industrial relations and employment creation, Bro-Mathew Shinguadja, called on employers not to retrench, force employees to resign...

Latest News

Rent prices stagger

2 days ago - 31 July 2020 | Infrastructure

The spike in the number of new Covid-19 cases in the last three months, signals that the worst economic effects of the pandemic are yet...

Chill with Windhoek Express

3 days ago - 30 July 2020 | Art and Entertainment

Currently running• The group exhibition While In Quarantine can be viewed at the gallery of the Namibian Arts Association until 30 July. Opening times Opening...

Here’s how your agent earns...

3 days ago - 30 July 2020 | Business

On average, for every hour that a real estate agent spends with the homeowner of the property they are selling, they will spend around nine...

Thousands of IDs ready for...

3 days ago - 30 July 2020 | Government

The ministry of home affairs is appealing to the public to collect their national documents from the ministry’s offices countrywide.According to executive director Etienne Maritz,...

Textiles for fire victims

3 days ago - 30 July 2020 | Social Issues

Hospitality Textile Supplies recently donated 23 boxes of goods valued at almost N$58 000 towards fundraising efforts for victims of the Twaloloka fire on Sunday....

KASU kicks off this weekend

3 days ago - 30 July 2020 | Sports

The first rounds of the eighth edition of the annual Katutura Sports Union's (KASU) Winter Cup kick place at the Sam Nujoma and Khomasdal stadiums...

Running for Twaloloka – virtually

3 days ago - 30 July 2020 | Sports

The proceeds of Bank Windhoek’s Virtual Relay are destined to assist residents of Walvis Bay's Twaloloka informal settlement who experienced a devastating fire earlier this...

Money talk at Vintage

3 days ago - 30 July 2020 | Business

Windhoek • [email protected] If you don;t have anything planned for tonight and you could do with some tips and tricks on moneymatters during these trying times,...

NESA debuts Brand new eFootball...

4 days ago - 29 July 2020 | Sports

The Namibian Electronic Sports Association (NESA) is geared for the National eFootball PES 2020 and Tekken 7 tournament to start, with the first qualifier scheduled...

Load More