As an asset, home ownership helps build wealth and financial security while also offering lifestyle benefits; but in a tough economic climate, homeowners are in search of ways to maximise the value of their homes, and generate the best returns.
According to Dominque dHotman, Head of ooba Solar, the easy answer here might be solar power.
“South African homeowners who are on the fence about whether or not to invest in solar power should keep in mind that demand for solar power continues to grow. Everyone is after energy independence and ways to reduce their household’s energy bill in the long run,” explains dHotman, Head of ooba Solar – a new offering that helps South Africans achieve energy independence through independent advice, solar financing and installations.
“Ultimately, solar solutions can increase the value of your home, and your equity.”
Elaborating on how solar power can be used to drive up your sales price and ultimately equity, dHotman says that prospective homebuyers’ search criteria have changed over the years. “In addition to the likes of security and modern features, solar power is in hot demand, and research is starting to show that homebuyers are willing to pay more for homes equipped with solar power systems, comprising panels, an inverter and batteries”.
What is equity?
Simply put, equity is the difference between what your property is worth and what you still owe on it. “As you pay off your bond or home loan, your equity grows,” adds dHotman.
“Making improvements to your property that increase its value, such as installing solar power, is an effective way to increase equity in your home quickly.”
How much value can solar add to your home?
Noting that homebuyers are prioritising back-up power solutions – and in particular, solar power – dHotman says: “Depending on the existing value of your property, Solar could increase the value of a property by up to 8%,” notes dHotman[Dd1] [MOU2] .
In addition to bolstering the value of your home, estate agents are reporting that solar power helps sell your home faster – and at a higher price. In fact, international reports suggest that homes with solar power can sell up to 20% faster. Locally. dHotman points to the results of a Pam Golding Properties Survey, which found that 68.8% of buyers will pay a premium for a home with ‘green features’, such as solar power. “Buyers will favour a property that’s already fitted with a solar power system as they don’t have to deal with the admin and the installation costs, which can total anywhere between R60,000 and R400,000 depending on one’s requirements,” says dHotman.
“The good news is that there are numerous financing options now available, making it easier for homeowners to make the move. In addition, homeowners receive a 25% tax rebate, up to R15,000 on the purchase and installation of solar panels”.
Your solar installation financing options
Beyond purchasing solar systems there are various financing options available to help reduce the barriers to entry:
· Financing through your home loan provider: Major banks now offer solar power financing solutions, linked to your home loan. “Each bank has set its own requirements regarding solar quotes, loan limits and accessibility of funds, so it’s important that you work with a supplier who can provide independent advice and help you really compare. You also need to weigh up the pros and cons of paying off a solar system over 20 years,” adds dHotman. ooba Solar, with a wide network of leading solar suppliers and a long-standing relationship with South Africa’s biggest financial institutions, offers customers a range of financing options. “With our expertise and knowledge of the different offerings from the banks, we’re in a good position to help customers understand their financing and lending options.”
· Rent-to-own: Solar financing or solar rental companies offer monthly payment plans (including system maintenance and upgrades), at the end of which, ownership of the solar installation may transfer to the user. “For homeowners who don’t have the funds necessary to purchase and install a system outright, this is an affordable alternative,” comments dHotman.
How to build equity in your home
· Prioritise a deposit: Your deposit not only signals that you are a serious buyer but it also reduces the total owing on your bond or home loan and, in turn, the interest on your repayments. “Your monthly repayments will secure you greater equity, faster,” says dHotman.
· Install solar power and be sure to maintain them: This boosts your property’s value and makes your home more desirable to buyers. “It’s imperative that you select high-quality equipment, and work with carefully vetted installers.”
· Home maintenance is key: Properties that are maintained and modernised, in line with current market trends, will achieve a higher property value. “Aside from solar power solutions, homebuyers are also prioritising items such as boreholes and JoJo tanks, as well as good security systems,” adds dHotman.
“An investment in solar power not only increases your equity and the value of your asset; it also an environmentally-friendly investment, that offers immediate lifestyle returns,” concludes dHotman.
