Buy – Don’t Rent

I’ve thought long and hard about whether I should publish this piece or not. It will probably not be popular.

The common opinion is that rents are too high, increase every year, and are becoming unaffordable for the vast majority of Namibians. All of which is true.

But I owe it to my mother to share with you what I learned from her. I learned how property works, and why you should try to focus on buying a property rather than renting.

Walk around a suburb in Windhoek. Kleine Kuppe, Olympia or Pioniers Park. Would it surprise you to know that most people in those big luxurious houses are paying approximately N$2 500 a month to live there, while you are paying N$8 000 or more just to rent your small flat?

How is that possible?

It is because they bought their homes. They paid their mortgage every month and, after 20 years, it was theirs, fully paid for, and all they pay now are monthly rates and taxes.

PERSONAL STORIES

My mother’s story is that, with my father, they wanted to buy their first home, but my grandmother was dead against it. “You are getting into big debt and you don’t know what you are doing,” she said.

But my mother DID know what she was doing. She ignored my grandmother, and bought a home.

After 20 years it was fully paid off. She lived there for 40 more years. At age 90, she used the money from selling that property to move into her retirement cottage.

But here’s another story. I have a friend who started renting in 1970.

This year, after 55 years of renting, and now aged 75, she has realised she can’t rent forever, and has finally bought her first home.

Had she bought in 1970, she would now own TWO fully paid-up houses.

Renting means you are essentially paying your landlord’s mortgage.

Renting means an increase in rent, every single year – for the rest of your life.

Renting means you will never own anything, and will always be a slave to your ‘lord’. Renting means leaving nothing to your children.

HOW CAN YOU BUY?

So how can you buy, when you can hardly afford to rent? The key is realising you won’t be able, at first, to buy the best house in the best area.

You may have to buy a two-bed flat in Goreangab (N$490 000 – N$5 000 a month) or Rocky Crest (N$700 000 – N$7 200 a month) or a two-bedroom house in Osona (N$554 000 – N$5 700 a month). 

Maybe it’s not ideal, but at least you have started your climb on the property ladder.

Your property should increase in value over time and, after 20 years, once it’s paid for, you can sell it, and will have a strong deposit to put towards your ‘dream home’. 

Unlike rent, which will rise every year until you die, mortgage payments should stay pretty much the same during those 20 years.

In fact, since December last year, if you were paying a mortgage, your monthly payment went DOWN twice!

Buying means changing your mindset from “I can never afford to buy”, to “how can I buy a property?”

It also means thinking like a banker. Would YOU be someone you would lend millions of dollars to?

It means thinking out of the box. Are you single, with a single salary? Maybe then it means getting married, and doubling that salary.

Maybe you need to find a property with an attached flat that can generate extra income.

Maybe it means opening a small account at the furniture store that you pay off consistently to improve your credit record.

The banks will consider all these factors when looking at your mortgage application.

WEALTHWISE

Yes, it’s not easy. Yes, you won’t be able to buy your dream house immediately. Yes, owning a property comes with extra expenses such as rates and maintenance.

But you will be on the property ladder. You will eventually own your property and, just like those who live in wealthy suburbs, one day you too will pay the equivalent of just N$2 500 a month.

If you are now 30 it means that by age 50 you will have no more mortgage payments for the rest of your life.

The title deed of the property will be yours. You will owe nobody nothing. 

And you will leave a magnificent legacy.

You will own a tremendous asset which you can then leave to your family, and that will put them in a strong position for their future. You have created generational wealth.

– Robin Tyson is a communications consultant, and property owner based at Swakopmund.

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