Johannesburg, 23 September 2021 – There is a new investment scheme rolling across the South African property market and brings with it a whole host of opportunities for honest investors and potential homeowners, as well as unscrupulous scam artists. As with any investment, it calls for a thorough investigation before capital layout. This scheme is colloquially known as the “Property Stokvel”; it is very similar to the traditional stokvel we know so well, which involves a sum of money contributed by different people and invested into one account.

With the traditional stokvel, each person in the group will get a turn to receive a standardized payout dependent on the collective amount. These stokvels are easy to understand; user-friendly and are primarily based on a system of trust and familiarity. Unlike traditional stokvels, property stokvels are started by a founder who then invites members of the public to join. These members start contributing and pay administration costs through joining fees. This money is used to purchase properties collective for the group. 

With rising costs of purchasing a property, participation in a property stokvel promises to reduce the barriers of entry by assisting buyers in saving and purchasing a property. “The idea is that property stokvels will make property ownership more accessible by allowing people to pool money and invest in property which they would not normally be able to afford on their own,” explains Rademeyer, “in theory, the more members a stokvel has, the more available money there is to invest. 

This sounds great, but if you’re looking to invest in a property stokvel, you must make sure that everything is above board. In Property Stokvels that are working well, the returns for investors are incalculable. Usually, these schemes set out to achieve one of two goals: To purchase and rent out property where all members share in the monthly incomeTo purchase a home for every stokvel member based on the order in which they joined 

“One of the concerns around property stokvels is that the founder usually administers the stokvel at their sole discretion with carte blanche to run and manage the scheme as they want,” adds Rademeyer, to ensure transparency, members must be given clear direction on what recourse they have if they’re dissatisfied with the administration of the scheme. They also need to know exactly how the ownership of the purchased property will work, whose names will appear on the title deed and how the decisions are made when it comes to allocating property. 

“There are also tax implications where multiple transfers of property are involved, so it is imperative that these are unpacked in the constitution of a property stokvel, and that members understand what could happen to them if the tax laws are breached,” says Rademeyer. “

Members need to consider the legal ramifications where stokvels, no matter what they invest in, are not juristic entities. They cannot acquire or purchase anything, they are not companies with shareholders, trusts with beneficiaries, or partnerships, therefore the constitution of the property stokvel needs to clearly set out its legal duties, as well as those of the founder and the members. 

“On the plus side, a property stokvel that works well translates into cash purchases for properties and no waiting for banks to approve bonds, the money is right there waiting for transfer, and the power of ownership is transferred to the members,” says Rademeyer In the end, it doesn’t matter if a property stokvel is run by your best friend or a stranger – In order to benefit, due diligence is a must, whenever it comes to your money.

If you’re invited to join a property stokvel, Rademeyer recommends doing the following, long before you make any financial commitments:

• Ensure it has a clear and robust constitution.
• Know the leadership and membership structure.
• Ensure you know everything about where your money will be invested, and how it will be used. 

According to Rademeyer, traditional stokvels are a much better way to save money for those looking to enter the property market. However, as with any financial investment, care must still be taken, especially as there has been rise in the number of scams involving stokvels. 

“Property stokvels that come with the promise of wealth creation can be very appealing. But you need to be careful when joining a stokvel that claims to be investing in property,” concludes Rademeyer adding that potential investors should be absolutely clear on what they are investing in and that the returns are what was promised to them.  

MultiNET’s new approach to sharing wealth means home loan consultants could earn R20 million on average more than their counterparts in the market. Over the years, those companies that have played a disruptive role in their respective market spaces have been the ones to catapult us forward. Apple and the smartphone, Nikon and the world’s first digital camera, even a certain insurance company and its telephonic underwriting process, are just three examples of how industries have evolved.

And the home loans industry is no different, as MultiNET, SA’s only independent home loan origination company, is disrupting its industry by giving their consultants the opportunity to earn 293% more than the current market norms. This equates to an average earnings of R58 000 more per month, and over a 30-year career of a home loans consultant, would be worth over R20 million.

“The idea comes from looking at the same industry we service, real estate,” explains MultiNET CEO Shaun Rademeyer, “We realised that in the real estate industry, the agent is the key to success, and earnings moved over the years from 50% of the commission to upwards of 90%. “We have looked to evolving the origination industry to make use of the same key element, the consultant; the person doing the loan application.

This person is normally well experienced in the financing of home loans with several years of detailed knowledge and expertise ̶ many actually come from a banking background where they helped build the mortgage industry as we see it today.” These experts are mostly found through referrals, either by estate agent or via friends and family ̶ they are normally the go-to-person when customers ask, “What is the best way to get a home loan?”

However, this same person who is so integral to the success of the business is also settling for the smallest slice of the pie. “We have asked why, and the answers that come back are brand loyalty, a guarantee of a salary even though most are commission-only earners or the culture the company creates. However, in the end these talented individuals are small businesses in their own right that should start looking after their own interest and the interest of their families vs the financial gains of a few within the business.”

In 2018, MultiNET decided to change the lay of the land for the consultant and launched a unique offering to the home loans market that is built off the company value of sharing the wealth with the individuals who are its backbone.

“At MultiNET, we keep the cost of running the company low whilst still providing systems, support and building a brand to support the home loans consultants and aggregation businesses,” explains Rademeyer, “The efficiencies within our organisation have provided us with the ability to match the real estate industry strategy and disrupt the market the same way as high commission split brands like Property.CoZa, Keller Williams and Re/Max did for the property industry.”

Alister Smit, a consultant who recently joined MultiNET, says when he first heard about the offer he was extremely sceptical. However, after joining the group he realised that for years he was working towards making other people wealthy, much to his detriment, and taking away personal time and resources for the future.

“The world is getting smaller, and more and more people are looking for personalised service, the type of service that comes from employees who are invested in the companies they work for. We believe that our consultants and business partners are the backbone of our industry, able to give that personalised service, and their reward is the earning opportunity we provide,” says Rademeyer.

“And this is just the start; we are committed to finding new solutions within our industry for all stakeholders, supporting the development of previously disadvantaged segments in the market and spreading the financial benefit with the broader players in the industry.” About MultiNet MultiNET is the only independent bond origination company in South Africa.

They are committed to evolving the origination industry through cutting-edge innovation in systems, processes and the development of people, specifically supporting the development of previously disadvantaged segments in the market. For more information, please visit multinet.co.za