Lessons learnt from being a first time home buyer.

Lessons learnt from being a first time home buyer.

What you should know before buying a home.


Most people dream of owning a home as an investment to earn a regular rental income. What most people don’t know is how to go about the process of purchasing the house. I got the opportunity to purchase my first house and I realized I knew very little about the process and what to consider. These are some of the lessons I learnt from my experience and I hope it will give you insights and make the process less of a hustle knowing what to expect as you plan to purchase the property.

  1. Property
  2. Location

The location of the property is key.

  • What is the proximity to social amenities? e.g. schools, church, shopping centre etc..
  • How is the security of the area? Are there streetlights?
  • What is the distance to your place of work or business?
  • How is the traffic?

These factors affect your daily routine and the time taken to different destinations. The longer the distance, the more time taken to travel. The more the traffic, the earlier you have to start your journey. If the area is insecure, this will influence how late you can reach or leave the house.

  •  Details of the Property

Some of the considerations when deciding the type of the property to buy are:

  • If it’s an apartment, which floor is the house on? Are there stairs or a lift?
  •  Number of bedrooms
  • How spacious are the rooms?
  • Access to lighting,
  • Is there sufficient parking space?
  • Is it a gated community or a standalone house?
  • Is the property in an area prone to flooding?
  • How is the water supply and sewerage system?
  • How is the electric system of the house?
  • How is the quality of the materials used in construction?

If you are planning to let out the property, tenants look out for factors that affect their comfort. This being a house they are renting and not owning, they have other options of houses if they don’t like yours and hence your property has to meet most if not all of their needs and requirements.

  • Return On Investment

Calculate expenses and profits beforehand. If you are repaying a loan or mortgage,

  • Is the income from the house or the opportunity cost if you are living in the home more than the expenses of repaying the mortgage or loan? If the expenses are higher, you can opt for a cheaper mortgage or loan facility or alternatively, if the house is appreciating at a high rate, you can opt to sell it after a few years at a profit.
  • Is there service charge payable to a property management company? This is for services such as garbage collection, cleaning services e.t.c.
  • Valuation of the property. At what rate is the value of the house appreciating or depreciating? This can be determined by getting a valuer to do a valuation of the property. The value varies with factors such as how fast the area is developing, upcoming infrastructure projects among others.
  • Market demand

If you are planning on renting out the house, what’s the market demand? How is the population of the area and the availability of houses in the area and the prices they are being rented out for?

  • Budget for 25% more than the value you are buying the house

A lot of additional expenses are involved when purchasing a property such as stamp duty, legal fees, land rent and rates, valuation costs, mortgage processing fees, insurance fees, cost of incorporation of the management company, electricity meter connection costs, water meter connection costs, advance service charge which ranges from 3 – 12 months among others that are often overlooked. Sometimes the property might not have all the fixtures & fittings or you may want to customize them to your liking or the tenant’s liking hence incurring an additional expense.

  • Do your research

Work with a professional to conduct a title search to find out the legal owner of the property, whether the land is on restricted area such as riparian land or on a road reserve or if the title has been charged (attached to another loan), if it has a caveat (a court injunction from dealing with the property) or if there are any outstanding land rates to it. Conduct a valuation to find out the value of the property. Research on the legitimacy of the property seller and which other projects they have done.

  • Off-plan or completed house

Is the property already built or is a proposed development? If you are planning to take a mortgage, some financiers only finance up to a certain percentage if the development is off-plan. Also, do your research to confirm the legitimacy and the completion period of the project as some projects stall along the way due to various reasons. Confirm if there are any legal implications to the constructing company if the project is not completed as per the agreed duration. You do not want to pay for a house and it takes 10 years to complete or worse stalls along the way.

  • Mortgage financing

If you are getting a security – backed mortgage, the financier will have to do a valuation of the security and search at the ministry of lands offices to validate the property ownership. This process may also take a bit of time as it varies with the county where the property being used as security is located. You may also have to take an insurance plan on the mortgage and security.

  • Liquidity

If you wish to sell the property quickly how fast will you be able to get a buyer? This is also influenced by external factors such as inflation, state of the economy, house pricing index e.t.c

  • Transfer of ownership

What documentations will be transferred to your ownership upon purchase and how long it will take to transfer the documents to your name.

Ruth Mbugua is a Marketing and Communications professional at ABC Bank.

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