Property Investment a Wealth Creation Instrument for the youth? It is easier to scale up your property investment with the support of your stokvel. “If you want to go quickly, go alone. If you want to go far, go together’”.. African Proverb
The following quote affirms my view about property investment;
While it has its risks, like any other strategy, purchasing property to rent out is a sound investment choice whose benefits far outweigh its shortcomings.”’ One person who believes in this strategy is Jason Lee, the best-selling author of Making Money Out of Property in South Africa. Join me as I share my property investment journey over 30 years, through the different stokvels that I belong to.
What do Stokvels have to do with Youth Property Investment?
A typical image of today’s stokvel member is some Mama/Gogo/Baba/Uncle. But the irony is that these stokvel Oldies, have been members of stokvels for about 10 to 30 years. These are the Oldies as far back as 1938 have been saving their meagre wages to improve their lives through stokvels. Some of the graduates today, were funded by stokvel savings. Many homes have been upgraded using stokvel savings. My point is that, today’s youth can still take over the baton from the Oldies and operate much more progressive stokvels such as property investment stokvels. The unemployed youth should look into alternative ways of generating income, such as starting small businesses. I have been in business from 1987, I was 30 years old. My first business was a Fish and Chips shop in Soweto.
Disclaimer: I am not a financial advisor or property investment expert. But one thing I know for sure is that Property investment, can create wealth for anyone.if it is done properly, following all the critical steps, as outlined in Jason Lee’s book, Making Money Out Property in South Africa,
Case Study: In 1980, I was only 23 years old. I had just got married, and like a typical township young couple, our first home was a rented backroom in Dube (Soweto). Please note, we stayed in a rented backyard room. This means that already our landlord was getting passive income from us. I think we were paying about R150.00 per month. Today, the same size backyard room in a township can be rented at between R1000 and R2000.00 depending on the area.
Simple calculations: I know for a fact my Landlord’s backyard room is still there. Of course, the old folks have since passed away, but their grandchildren are now Landlords and they will eternally benefit from that backroom that was built by their grandparents for probably a nominal cost of about R2000.00. This is not an exaggeration. In 1981 when we moved out of that backyard room, we built a 135 square meter house in Soweto. We took a 20 years bond of R20 000.00. Fast forward to 2020, that house market value as per Joburg City Municipality Valuation is R900 000.00. By the way I still own that house, and of course I am now a landlord and generating quite handsome rent from it.
Stokvel savings discipline enabled me to travel the following property investment journey.
Moral of the story is: I joined my first stokvel in 1981, I was 24. I bought a house at age 24. The house was not funded by the stokvel but, I was inspired to take a bond, by other stokvel Mama’s who had beautiful houses. I joined my second stokvel in 1992, I was 35. We have a nice investment nest egg through Mazi Capital. I joined my third property investment stokvel in 1998, I was 41. We bought a holiday home for rental in Hayzeview, Kruger Park Lodge. We took a bond of about R600.000. Today that holiday home is worth about R2.5 million. In 2012 I joined my fourth stokvel with two friends. We bought a townhouse R196 000. Which we are renting out. We receive some nice dividends at the end of each year. Through three decades of being a stokvel member, now at the age of 63 years, I can proudly say I have a small comfortable portfolio of properties, which form part of my estate. Believe you me, as an individual, without an inspiration from my fellow stokvel members I would not have developed this passion for property investment.
-BUSI SKENJANA-
In our next edition we will continue with investment opportunities focusing
on Franchise Opportunities! Well-known brand, Cash Converters will explain
why investing in their franchise is a viable option for you or your
Stokvel. For more information, click here:
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