The recent student protests have focussed South Africa’s attention on the cost of tertiary education. Not only that, but people have also been forced to look at the impact that cost can have on the financial future of the students themselves, as well as their parents and others who pitch in to help them pay for their education or pay back their student loans.
“We obviously want the students of today to become the homebuyers of tomorrow,” says Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator. The truth is that in SA, as in many other countries, many graduates are facing years of debt repayment before they can even consider buying a home. This is acknowledged as one of the main reasons that the average age of first-time homebuyers all over the world has risen from the mid-20s a decade ago, to the mid-30s now.”
The ripple effect
“Indeed, a very large percentage of young adults are now not even renting accommodation after graduating but continuing to live with their parents or other family while they tackle their student debt”, explains Rademeyer. “This is not only reducing the demand for new apartments and starter-homes, but it’s also limiting the ability of their parents to give effect to their own plans for retirement, which once again has a negative effect on the residential property market.”
Current estimates from the Department of Higher Education, he says, are that student debt to the universities is at least R5bn. “On top of that, there must be millions of Rands more owed to the banks in the form of student loans, so this is not a small problem. It needs to be addressed soon if we want the next generation to be able to become homeowners, to start new businesses and to better the lives of their families.
Addressing the issue of student debt
Educating people is a good place to start. “One way to address the issue, we believe, would be by ensuring that students and their parents are better informed about the implications of borrowing money to finance their studies, about the commitments they are making to repay those loans, and about any alternative study options that are open to them”, says Rademeyer. He feels that it is not likely that a totally free tertiary education will be introduced in the near future, and that since so many South Africans are firmly committed to the idea that education is the best investment they can make in their future, or that of their children, student loans are probably going to remain a huge part of SA’s financial landscape.
Being fully prepared to take on a student loan
“Traditionally, our banks and other lenders have looked pretty favourably on student loan applications, and the availability of such loans has proved invaluable to parents, students and the economy as a whole. It is vital though that the borrowers fully understand the need to service these loans correctly and on time, and to assess whether they can realistically afford the repayments, or expect to afford them once they graduate”, states Rademeyer. “If they cannot, they may have to consider other ways of obtaining more qualifications, such as working and studying part-time or online, or perhaps initially taking only specific short-courses to enhance their employment potential, rather than a full-time degree over three or four years.”
Whilst this may seem like a long way around to a better career, it really may actually be preferable. “Leaving university with huge debt or a bad credit record can undoubtedly hurt your prospects for years to come”, says Rademeyer. “At the same time, you could also be inflicting similar long-term financial damage on your parents or other family members who were only trying to help you.”
Student debt can greatly impact your financial future so it’s important to consider all the variables before choosing to take on a student loan.
Some people are too shy to go to a commercial gym and some just don’t have the time to go during normal gym hours. Yet others just prefer to have their equipment to themselves, but whatever the reason, home gyms are becoming an increasingly sought-after feature among homebuyers. With some forward planning, it’s relatively easy for homeowners to convert an unused spare bedroom or garage into a great workout space.
What you need for a home gym
Here’s a list of things you’ll need to make the perfect home workout space:
- Good ventilation, which might mean installing a powerful overhead fan or adding an extra window
- Smooth, cool floors that can take lots of wear and tear, so you might have to take out a carpet and lay tiles perhaps, or put rubber matting in over a concrete floor
- Enough electrical outlets if you want to run power equipment such as a treadmill, bike or orbital trainer
- Soundproofing if you like to exercise to loud music
- A large mirror on one wall to enable you to observe form and technique and so reduce the chances of injury from certain types of exercise.
However, the experts say, if your home does not already have a gym, it’s best not to spend a lot of money on making these changes or buying expensive exercise equipment until you’re sure you will make frequent use of it. The treadmill that has become a clothes-horse is a cliché for good reason.
So set aside the space you would like to convert and start small with some simple items such as a yoga mat, a basic set of dumbbells or kettlebells, and a stability ball for resistance training. If you want to get your heart-rate up, try skipping, a basic stepper, or a cardio dance “class” on your laptop.
If after a few months of consistent training you find that you still want a “big ticket” item like a stationary bike, start by looking in the classifieds (the best time is about two months after Christmas).
Bring in the professionals
At that stage, it will probably also be worth starting to upgrade your spare space and turning it into a slick home gym that will add value to your property, something particularly useful for if and when you decide to sell one day. But as with any DIY, unfamiliarity with the tools and process can be dangerous. If you live in an upstairs apartment, for example, you need to make sure that the floor of your gym space will support the weight of any heavy equipment you plan to install.
Similarly, if you are planning any changes or additions to the electrical system such as adding more lights or plug sockets, you really must get the work done by a qualified electrician who can then also update your electrical safety certificate. And finally, if you need to access some of the equity in your home to make some structural changes, you should consult with a reputable mortgage originator like BetterLife Home Loans about extending your home loan.
Please note: If you are at all uncomfortable or inexperienced working on DIY projects (especially projects involving dangerous tools or tasks), please reconsider doing the job yourself. It is very possible on any DIY to damage your property, create a hazardous condition, or harm yourself or others.
Don’t you wish you had the power to “do something” whenever you see a homeless child, or an abused animal, or a park full of rubbish, or even when someone close to you is in need?
Well, now you do, thanks to the BetterLike Initiative recently launched by BetterLife Home Loans.
“People tend to think that they can’t really accomplish much as an individual,” says Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s largest mortgage originator, “but with this initiative we aim to show just how much they can achieve if they are willing to share their dreams for change with others.”
“What we are doing, firstly, is providing the platform for them to do that via our entry website www.betterlike.co.za, where they can describe a project or an idea that they believe would make a big difference to an individual or the cause or charity organisation they support.”
This might be the establishment of a new food garden to feed and employ hungry people, he says, or a fund-raiser for a wild animal shelter. “You might have a dream to support an old age home, or give young people back their smiles. Or perhaps you would like to be an eco-warrior cleaning up the environment, or head up a team taking solar power solutions to a rural area.
“Whatever it is, we want you to tell us about it. Then every two months, we will choose three of these ‘dreams for change’ to go forward to the second stage of the competition and be posted on our Facebook page, where the finalists will need to inspire their families, friends, colleagues and the public to support their ideas and give them Likes. So, be sure to like our Facebook page to follow the action.
“The person who gets the most Likes will then get financial support up to R100 000 to bring their dream to life and implement the project that they have described – while we bring the camera crew to capture the whole thing on video.”
In short, Rademeyer says, the BetterLike campaign aims to encourage and empower those inspirational people who are always looking for ways to make life better for others.
When considering millennial buyers, agents most often think about the difficulty such buyers may have in qualifying for a home loan due to student loan debt or the lack of a deposit. However, another thing they need to bear in mind is that many young adults simply don’t know where to start when it comes to buying a home, and may just need a straight-talking “coach” to get them on their way up the property ladder.
Millennials (aged 15 to 30) obviously spend a lot of time online and with so much real estate information available online today, it’s easy to become overwhelmed and give up on the whole process.
Agents who want to secure their future “pipeline” of buyers really need to get to grips with this and provide some simple guidelines that will turn them into trusted advisers. In this way, they improve their chances of becoming the people who first-time buyers will most likely turn to when they decide to stop renting and become home-owners.
To start with, here are three basic concepts agents need to build into their communications with millennials:
If you think you can afford a home, get pre-approved for a home loan
Potential buyers need to assess their own financial ability, and a good way to do that is to seek pre-approval from a reputable mortgage originator like BetterLife Home Loans.
The purpose of this process is to determine how much they are actually eligible to borrow, and ultimately, how much they can comfortably afford to spend (including their deposit). This is not only a time-saver for both buyers and estate agents, but also gives buyers an advantage in a competitive market because it lets sellers know that they are serious purchasers with every likelihood of being able to get a home loan.
There are big benefits in paying a deposit
It is of course possible to obtain a loan for 100% of the purchase price, but first-time buyers need to understand that it is really worth saving up a substantial deposit before they commit to a purchase.
The more money they have to invest in their own homes, the faster the loan application process will go and the more likely they are to obtain a preferential interest rate that will mean lower monthly bond repayments. Also, the bigger their initial equity, the greater the likelihood that they will be able to pay off their loan earlier, which will mean even more savings.
Before you go househunting, think about your lifestyle
Millennials generally have a very different lifestyle to that of their parents, and the chances are that they will need homes that are very different to those they grew up in.
The most important thing is to think about where they and their families spend the most time – such as work, school, shops and the gym – and concentrate their attention on areas where they can live as close as possible to all these and avoid long commutes. After that, they should think carefully about what type of home they would prefer – an apartment, a townhouse or a stand-alone house with a garden – and how much space they need. The more specific they can be, the more likely agents are to be able to match them to their perfect property.
As an agent, understanding the different kinds of clientèle you deal with on a daily basis is key to making successful sales and positioning yourself as someone buyers will consider reliable, knowledgeable and helpful.