The COVID-19 pandemic has left many households questioning the future of their families, especially when it comes to living arrangements when one of the family’s sources of income have fallen away.
Single income homes are no longer in vogue as families struggle to keep up with the financial demands of modern living. Having one parent stay at home to raise a child or having a partner pursue a career in something that had previously only been a hobby, is something that rarely occurs today, mainly because the cost of living has increased significantly over the years. As such, supporting a household on a single income has become an increasingly difficult task.
It is ironic and unfortunate that 2020, a year in which every cent counted in so many households, also left so many struggling families navigating the year with a single income. Yet, single-income families (who do so by choice) do still exist. And in many ways, it is their homes that allow them to survive. When planning ahead for a single income, families are able to adjust their lifestyles and expenses around the change gradually. When the change is forced on them, as has been the case during the pandemic, the change is not gradual at all and does make the transition a rather bumpy ride.
The primary reason for an income being lost during the pandemic is undoubtedly the loss of employment due to retrenchments, but other reasons do exist. As the economy re-opened, and places of work called back their staff, many people who live with comorbidities simply could not risk going back to work in an environment that increased their risk of infection. Numerous households also had to consider whether they were comfortable sending their children back to school, where the risk of infection seems unavoidable. Many of these families opted to take the education of their children into their own hands and sacrifice the additional income.
But changes like these do not have to spell the end of your real estate dreams; they may just require you to reconsider how the dream will be realised.
Those who wanted to purchase their first home before the loss of an income may need to reassess the price-range of their purchase, but they do not need to give up on the idea of owning a property entirely. When families are still able to afford a real estate purchase, it may actually count in their favour in the long run, where the property can act as a long-term investment that will bring with a more reliable financial situation in years to come. An access bond account can also be utilised in cases of emergencies, where expenses simply cannot be taken out of the regular budget.
For current property owners, the first idea that may pop into their mind may be to sell and downscale, but that might not be the only option available to you. When selling a property, one has to take into account the additional costs that go with any sale, including bond cancellation fees, the costs of obtaining home inspection and compliance certifications, the payment of any municipal accounts, and finally the agent’s commission. These costs may add up to a substantial amount, making a sale far less profitable than you may have thought. So, before selling your house, it may be a good idea to consider making up a bit of the lost income through your property itself, if the property has the extra space to accommodate it.
Airbnb’s are not something new, and it offers homeowners a way to supplement affected incomes when there is a room or a part of the house that can be renovated into bed-and-breakfast accommodation. The key word here being “renovate”. This option may, however, require you to invest money to make money. Another option is to rent out a room in your house. This option will require you to go through thorough screening processes with possible tenants: not only to ascertain the safety of a possible tenant, but also to determine how well they will be able to fit in with the inner workings of your household.
If you’re not sure as to what to do next, the best advice is to get in touch with someone who can help you understand your situation and assist you in planning out your next steps.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)