If you’re thinking of upgrading your home’s security system, or adding one in the first place, you may be wondering how much value it could actually bring to your home.
It goes without saying that new homeowners, especially those with children, have safety as a high priority on their checklist. And with the rise of smart technology comes a new, tech-savvy generation of parents looking to buy homes with up-to-date security features.
If you’re looking to upgrade to better security technology, consider these tips in order to make the best possible investments.
Consider Installing Smart Home Technology
When it comes to modern home security, automation is everything. We’ve all had that “did I leave the stove on?” or “did I lock the back door?” moment. Whether you’re naturally forgetful or in a hurry, everyone can benefit from an automatic lock system.
There are tons of smartphone technology systems that allow you to control pretty much anything from a remote location. Companies like Vivint, ADT, and SimpliSafe offer smart home security systems that allow you to activate the alarm, lock doors, turn off appliances, and even control your home’s temperature from your phone while you’re not even there. Some apps, like Lockitron, will even unlock your front door automatically as you approach it, using the phone’s Bluetooth.
While these examples are generally pricier than your average alarm system, it’s important to remember that rising homeowners are used to smart technology being incorporated into their everyday lives, and therefore much more likely to invest in a home with smart technology. Younger homeowners and parents are also more likely to have more advanced technology inside their home, increasing the desirability of the home as a potential break-in target, and ultimately making an advanced security system more desirable.
Tip: if you’re in the process of selling your home and have smart technology installed, make sure the potential buyers actually try it out for themselves; the hands-on experience will show them how easy it is to use.
There Are Other Ways To Upgrade The Security Of Your Home
While smart technology is definitely a desirable security feature, there are other, more cost-effective ways to update your home’s security. Security cameras go a long way in attracting potential buyers. Installing cameras at entry points will not only make the homeowner feel safe, but it will also deter potential burglars from breaking in out of fear of being caught.
Consider installing motion sensor lights near the entry points of your home; you won’t waste electricity by keeping outdoor lights on all night to deter intruders, and you’ll know when someone is approaching your home when the light goes on. Similarly, you can install window sensors that alert you when the window has been opened a certain amount.
There Are Even Simpler Ways To Update Your Home’s Security
There are several inexpensive protective measures you can take to upgrade the security and value of your home that are entirely worth the investment. Make sure all doors to the house have deadbolts. Install window shades so that intruders can’t see into the home. Make sure the locks on the windows work and can secure easily. Update wooden doors to steel doors. These measures may seem small and unimportant, but not having these simple features up to date will be noticeable and make your home less attractive to buyers.
Think Beyond Security
While security is extremely important, don’t forget about other threats to the home that can be thwarted using technology. Make sure there is a fire alarm in every room, and make sure there is one carbon monoxide detector per floor. If you live in a region that is prone to natural disasters like hurricanes or tornadoes, make sure you have sufficient, weather resistant doors and windows.
Bottom line: having updated security systems, especially those that utilize smart technology, will likely increase the value of your home. Not only could it increase the monetary value, but updated security will bring a peace of mind to potential homeowners that will ultimately make your home more desirable.
So while it may be an investment, it will upgrade the value of your home and ultimately end up protecting you while you live there, so it’s definitely worth considering.
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The Reserve Bank’s monetary policy committee (MPC) could remain in limbo for the rest of the year and keep interest rates unchanged.
The committee, which will have two more meetings this year, will have to weigh a volatile exchange rate and a slight rebound in the economy against looser global monetary policy — a combination which could see them play it safe.
The MPC cut interest rates by 25 basis points (bps) last month, effectively reversing a controversial interest-rate hike in November 2018. The Bank cited lower growth and lower inflation expectations for the cut. While some analysts called for a 50 bps cut at the time, the MPC said it did not consider it.
Now, analysts are speculating that the Bank won’t make another move this year.
The forward rate agreement market, which had priced in a rate cut for September, has reassessed the path of interest rates as less dovish and is now pricing in no material chance of a rate cut until January 2020 — with only about a 40% chance of a 25bps cut then.
The major central banks have adopted easier monetary policy stances, with the US Fed cutting its federal funds rate by 25bps in July. In sharp contrast, the rand has weakened significantly. The rand has breached R15/$ reaching its worst level in 11 months. The currency’s one-week implied volatility is the highest among major currencies at 16.72% on Friday, its highest volatility since March, according to Bloomberg.
While this is partially due to SA’s wide current account deficit, which leaves the country vulnerable to external shocks such as escalating global trade tensions that cause investors to pull back from riskier assets, the rand has also been hit by growing concerns about Eskom’s severe financial woes and the implication of this for government’s already onerous debt burden.
“Given these counterbalancing forces, we believe the MPC will err on the side of caution, leaving interest rates unchanged for an extended period,” Nedbank economist Johannes Khosa said.
Problems at Eskom are expected to continue while divisions within the ruling party will prevent President Cyril Ramaphosa from pushing through the reforms that saw the rand strengthen when he was first appointed, Capital Economics economist John Ashbourne said.
Tensions between the US and China are also unlikely to ease anytime soon while slower global growth could see the price of SA’s key commodity exports trend down, he said. “The pressure on the rand probably won’t let up anytime soon,” Ashbourne said.
Currency weakness is likely to add to potential inflationary pressures, which will contain the amount of easing that the Bank can “reasonably” deliver, said head of emerging markets strategy at TD Securities Cristian Maggio.
“Given the current circumstances, a forecast for at most one cut this year is still somewhat reasonable, though risks are leaning more towards the November than September meeting,” he said.
Added to this uncertainty is an expected ratings announcement from Moody’s Investors Service in November. Moody’s, the last credit rating agency that has SA above investment grade, has already taken a grim view on the bailout to Eskom. On Thursday, the ratings agency said government had little room for additional support to Eskom which would result in a larger fiscal deficit and higher debt burden.
The rand’s recent underperformance indicates that the market is already pricing in a downgrade by Moody’s to at least a negative outlook, Standard Bank currency trader Warrick Butler said.
“The timing of the [next MPC] decision is too close to the Moody’s decision date. The MPC may want to wait for that outcome before deciding on the path to take. There’s no point cutting rates if we are downgraded because the bond and FX will need help,” Butler said.
While growth prospects for the year still remain dim, a recovery in the economy will give the MPC room to leave rates unchanged. After a steep contraction in the first quarter of the year, the economy is expected to rebound in the second quarter – helping SA avert its second recession in two years. Barring the agricultural and construction sectors, the rest of the economy is expected to have recovered. The GDP figures for the second quarter will be released on September 3, two weeks before the MPC is set to meet again.
“Signs of a recovery in the second quarter have increased the risk that policymakers will leave their key rate on hold at 6.50% in September, rather than cutting as currently expected,” Ashbourne said.
FNB’s quarterly property survey has confirmed that Cape Town’s luxury house market is on the skids.
“The upmarket areas continue to take a hit,” FNB analyst Siphamandla Mkhwanazi said on Thursday in a report analysing the Cape Town property market’s performance in the second quarter of the year.
House prices in the city’s priciest suburbs on the Atlantic Seaboard fell 3.7% year on year, he said, and prices in the city bowl were down 5.7%.
Prices are growing more slowly than they have in a decade, foreigners are losing interest in Cape Town property and a surge in emigration is fuelling supply.
FNB’s survey confirmed data a week earlier which said sellers on the Atlantic Seaboard and in upper Constantia had cut asking prices by up to R10m in the past three months.
Mkhwanazi said the price pressure on affluent properties was becoming a common theme across the country but data from Cape Town showed the pressure was spilling over to middle-priced areas.
“By contrast, lower-priced areas remained resilient, and comfortably in the double-digit [price increase] territory,” he said.
FNB’s survey, using deeds-office data, showed that average house prices in Cape Town increased by just 0.5% in the past year.
However, said Mkhwanazi, “in real terms [ie considering the effect of inflation], average house prices have been declining for a year now. “Overall, this marks the slowest growth rate since the end of 2009 and comes as no surprise, given the generally weak economic fundamentals.”
In addition, house-price growth had outpaced income growth to such an extent that affordability had been eroded. “At the same time, foreign buyers continue playing a less prominent role in the domestic market, while emigration sales have intensified.”
Mkhwanazi said prices being achieved were also slumping, compared with asking prices. Sales in the second quarter were made at 12% below asking prices, on average, compared with 8.2% a year earlier and a national average of 9.9%.
“Importantly, the favourable pricing appears to have spiked demand from first-time buyers,” he said, with the number of property virgins tripling in the past two years.
“Buy-to-let activity also appears to be improving, estimated to have accounted for 10.6% of total volume.”
Prices in the southern suburbs of Cape Town contracted by 4.9% year on year in the second quarter, and eastern suburbs such as Pinelands and Woodstock experienced a 5.3% price fall.
“Pressure appears to be spilling down the price ladder, and away from the mountain,” said Mkhwanazi.
“Sub-regions in the northern suburbs showed a sharp deceleration in house-price growth in recent quarters. For some time these regions were perceived as offering more affordable housing opportunities, as affordability deteriorated nearer the mountain.
“Ultimately, prices overshot and completely counteracted their initial attractiveness. Unsurprisingly, as demand slowed, price growth slowed.”
In the Elsies River/Blue Downs/Macassar areas, however, price growth jumped to 16.1% in the second quarter, and the Cape Flats achieved 11.1% growth.
Mkhwanazi said: “Housing market trends will remain heavily dependent on developments in the broader economy.”
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Buying and renovating a fixer-upper property - one that's a little dated or run-down - is a time-honoured tradition for bargain-hunting buyers looking to maximise their return on investment. Of course, finding the right property is integral to the success of this strategy - a poorly chosen project could easily cost far more to renovate than it could ever recoup in a sale.
Before purchasing a property, spend time looking at what is available in your desired area and study the market thoroughly. This will give you the confidence needed when it comes time to purchase. Always speak to reputable estate agents in your area and brief them on your requirements - they may just lead you to the perfect property.
So, how do you go about spotting a fixer-upper that’s worth the time and cash investment? These are the most important elements to look out for:
1. It’s in a great location
If there’s one thing you can’t change about a property, it’s location. If a house is in a bad neighbourhood, an inconvenient position, or too close to an undesirable structure like a cell phone tower or ugly apartment block, you can do the most spectacular renovation and still struggle to make a favourable sale.
Good locations to look out for are homes within popular school catchment areas, close to central business districts, or in trendy neighbourhoods with convenient access to freeways and other amenities. A north facing aspect, mature trees on the property and attractive views are an added bonus.
Remember, just because an area is popular or trendy doesn’t mean you won’t find fixer-uppers on the market. You often find elderly people moving out of up-and-coming suburbs who are selling homes that make perfect renovation projects.
2. It’s structurally sound
Having the ideal location doesn’t always make a property a good fixer-upper. A sound structure is essential in order to keep renovation costs down.
Homes with serious structural faults, like unstable foundations or weathered roof beams, for example, can take a huge amount of money and expertise to repair. This is seldom worthwhile for buyers hoping to resell for a profit in the short to medium term. If you’re not sure about the structural condition of a property, I’d highly recommend getting an expert inspection performed. This is not the kind of issue you want to discover halfway through a renovation!
3. It has good layout
A solid structure is certainly an important part, but layout also can’t be ignored.
It’s a mistake to assume you can solve every design flaw by knocking down a few walls and opening up the layout. If the kitchen or bathrooms are in a weird location, or the bedrooms are all in the coldest, darkest part of the home, it’s going to be difficult to solve that problem in a cost-effective manner.
Look for homes with convenient room “clusters” – a comfortable bedroom wing, a central kitchen, dining and living area, and logically placed entrances, garden access and bathrooms.
This enables you to remove a few, non-loadbearing walls to open things up if necessary, and you won’t end up with a family bathroom in the middle of your living space.
4. It has predictable renovation costs
Building work is notorious for being unpredictable, but it’s vital to at least understand the renovation cost ballpark you’re playing in before buying a fixer-upper.
Try and set budgets for individual items or sections of the home. For example, set a price per square metre for flooring and stick to it. It can be very easy to get emotionally caught up on a project and choose finishes with your heart and not your wallet.
To make a profit on a fixer-upper, the purchase price plus the total renovation cost needs to be low enough that you can recoup your investment – with a healthy profit – not too far down the line. If you don’t fully understand the renovation costs, it’s all too easy to end up with a money-drain rather than a money-spinner.
While experienced house-flippers may be able to estimate renovation costs on sight, newbies should always consult with a construction expert before making a purchase, if possible.
If you are planning on contracting all the building workout, make sure you have chosen a reliable contractor with great contactable references. Don't choose a builder based on the lowest "thumb suck" pricing - you will regret it in the long run.
Don't forget to assign a portion of your renovation costs to the garden or green areas. This is often overlooked and can be a deal breaker if the building is beautifully renovated and the garden and outside areas are left unattended.
It’s all about going in with your eyes wide open. Naïve optimism has no place in a fixer-upper project, but if you do your homework and make sure you know what you’re getting into, renovating run-down homes can be a rewarding and profitable strategy for property investment.
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