Looking for your dream house? Is it a fantasy or a nightmare? Oh no, I said the ‘n’ word. Does it happen? Hansel and Gretel come to mind. They were wandering through the forest and unexpectedly discovered this house that was made out of candy all over. Hansel, who thoroughly appreciated the roof, tore down a big bit of it, while Gretel pushed out a whole round window-pane, and sat down the better to enjoy it. We know in the story that the friendly lady turned out to be a witch and in the end we might feel like when the witch told the children: "I've got them now; they shan't escape me!"
Looking for you dream house is something we all want. We remember a time when we were content, happy, fulfilled and cozy in our homes but due to our circumstances that has changed- we feel empty inside, a longing. What does it take to recoup that image, the house vs. a home?
Our concepts of a dream home all differ. Some want the quiet countryside home, some love the buzz of the big concrete jungle and some of us just live where we are currently because that was the quickest way to move our stuff due to the fact that all the houses we went to see just didn’t cut it but we had to be out at the end of the month. So what are our options? We might be stuck with that house that we bought with such fervor at the start but we’ve become used to it and boy, oh boy did you see my friend’s house where we had that party this weekend? Wow!!! ‘Did you see her kitchen?’, is what the ladies may say or the guys would comment on the braai and how it is perfectly positioned with the bar and pool. Not to speak of the taps; the double shower with TWO shower heads and man that bath that reminisced our youth when the bath used to be our very own deep sea diving tank.
My wife and I had a ‘seeking my dream home’ experience not so long ago. We thought about our life in Knysna and how can we match that kind of living here in Stellenbosch. I think the things that appealed to us at the time was that the house should have at least 3 bedrooms with a double garage and a view. What are the criteria we should look at when making that important choice? Luckily we had 3 months to go and do house hunting and we found a great house with a walk in closet, nice braai area with a view and matching lounge and kitchen and some thought has gone into designing the workflow of the house. I think compared to the other places it was the best possible choice we could make. But yes the double shower head, the curtain wall window and the pantry could have made such a big difference, not to mention the ergonomics of the layout. In retrospect over the years I have learned what I really appreciate about a great home not just a house. On average they say that all people live 7 years in their house and then they move. Now if adventure is your thing and “a change is as good as a holiday” it is good, but financially we don’t always understand the impact on our budget long term as well as the mere fact that your money needs to work for you and not the other way around.
Let’s take my parents house as an example, me being a person who did well at math’s and just had to become a quantity surveyor after school. I never knew what a quantity surveyor was until somebody said to me they are brick counters and then the ‘aha’ light bulb went on. My father bought his house in 1970 for R 13 000. He would have paid say at least 5 % commission which would amount to R 650 at the time and believe me R 650 was a lot at that time. I think my dad got paid R 130 per month as a chemical engineer working for Yskor. It seems ridiculous nowadays: R 650? Ok lets say the average house appreciated by 10,75 % / year, then by year 7 our house would be sold for plus minus R 39,713.07 and the commission would be R6,921. The commission in year 14 = R24,122, year 21 = R84,074 and year 35 = R293,031. If you add these amounts together you come to R410,783, but then we haven’t added the magic words, “the time value of money”. Now there is a very high tech word the financial industry use which is the “discount value”. All that it means is that you take money that you would have earned in the future and you bring it back to the current day to see what it is really worth. Now if we apply that principle to our R410,783 it comes to R12,233. You would think that what is R12,233 rand in today’s money, but that is not the case. It is R12,233 rand worth 35 years ago. So the money in real terms in today’s value is R 5,514,843.72. Wow!!! Now, I can relate with that sum of money. So to make a long story short if you find your dream home and you stay in it for the rest of your life you would have saved yourself R5,5 million rand.
There is also the other side of the coin. If I invested that money that I spend at 12% which is a usual trust fund forecast I would have R 798,933 in the end. If at 20 % which some will say is an average stock market return you’ll get R 2,649,103 or at 40% if you really know what you are doing that amount will soar to an incredible R 777,533,126. Makes you think hey?
So coming back to Hansel and Gretel there might just be some icing on this cake. Now that is some food for thought.
As published in Eikestad Nuus, Stellenbosch
Francois
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ctccza@yahoo.com