Guiding consumers since 2009

Property Stokvel - the key to owning a house

By Athenkosi Sawutana

In an era where access to housing is limited to a privileged few, a property Stokvel may be the access card that the previously disadvantaged need, says Nicolas Manyike, founder of the newly formed Property Stokvel Investment Club.

Nicolas says that property is important in the economic emancipation of black people.

“There’s no freedom without financial freedom, ownership of land and properties. The majority of black communities are still suffering the effects of apartheid,” says Nicolas.

He says his own experience gave birth to the idea of a property Stokvel.

“When we relocated to the city of gold, we battled to find a place to stay,” he says.

“My business partner and I had to make use of the Ekhaya shelter for the homeless in Johannesburg,” he recalls.

How does the Stokvel work?

According to Nicolas, the club has two phases.

Phase 1:

  • Members contribute R2100 monthly. 
  • R100 is deducted from the monthly contribution for administration and legal fees.
  • The target for phase 1 is 100 members.
  • As soon as phase 1 members reach the targeted amount, a property/franchise will be brought to generate a stable source of income for all members.
  • The profit that will be generated from those assets will equally be shared amongst the members. They will receive the profit amount annually for a lifetime.

Phase 2:

  • Members will be grouped into 30 members per group, where each member will monthly   contribute R15 000 which will make a monthly total of R450 000.00
  • That amount will be used to buy or build a house for a member each month which will be bought or registered under the Stokvel as security for other members.

In case of job loss, Nicolas says the club will give the affected member a chance to recover or refund them if the need arises.

 “We will give a member a grieving period of three months to sort out their finances, then come and pay back all the missed months,” says Nicolas.

“If a member fails to do so for more than 3 months, he will be refunded 30% of his initial contribution and 70% will stay in the Stokvel,” he adds.

Nicholas says it will take a minimum of three to five years for all members to receive their houses.

According to John Manyike, head of financial education at Old Mutual, a property Stokvel is a good wealth creation vehicle.

“Property Stokvels represent an excellent opportunity to revolutionise Stokvels savings from short-term savings vehicles to more long-term investments,” says John.

He says members need to understand and agree with the founding principles, potential risks and constitution of the Stokvel.

"As with all Stokvel, the purpose, potential risks, membership and constitution of the Stokvel need to be clearly laid out from the very beginning to avoid ambiguity, misuse of funds and undue risk,” he adds.

Recent Articles

Featured New homeowner? Be aware of these extra expenses

You’ve overcome all the hurdles of buying a home. You’ve managed to pay your deposit and your closing payments, and now you’re a proud title deed holder. However, there are other expenses waiting around the corner. Are you prepared?

Your biggest credit conundrums – answered

Understanding your credit health is one of the most important factors in managing your finances. This is because it gives you insight into your debt, your borrowing ability, and your financial history. While many understand this, there are still many questions on how to do just that.

Avoid debt collectors, choose debt counselling

There are two things you can do when you are struggling to pay your debt. You can either let your creditors hand your debt over to debt collectors – or you can let debt counsellors help you deal with your debt.

Retail notes: easy investment option for new investors

Being a newbie in the world of investing can be challenging because you don’t know where and how to invest. With so many investment options, you could easily be befuddled. Justmoney looks at how retail notes can help you cut your teeth in the world of investing.   

Deals

Translux Student Discount

Price: Depends on destination
When: Daily
Where: Nationwide

Zimbali Senior Citizens Discount

Price: From R1342.00
When: Until 14 December 2019
Where: KwaZulu Natal

Free meal for kids at Mozambik Restaurant

Price: Free
When: Until 15 November 2019
Where: Johannesburg, Durban, Pretoria