Buying property at a discount with an entry point of just R1. Seriously.
Rupert Finnemore, head of Easy Properties and a 20-year veteran in the sector, offers a counter to Magnus Heystek's warning to stay away from real estate. He explains that the sizable discounts Easy can negotiate through its crowd-funded chequebook and a low price entry point (investing from R1) provides unique advantages. Its highly niched focus, he adds, makes this a very appealing prospect for all investors. Rupert spoke to Alec Hogg of BizNews.
Rupert Finnemore on Magnus Heystek's article
I read that article with interest and have been in the property industry for about 20 years. Whenever I see a Magnus Heystek article, I wince a bit because I don't think there's any bigger property bear around. But it was really interesting. To see that now the listed property space is down by 50% in South Africa and up by 60% offshore. It's difficult to argue with numbers like that.
On what EasyProperties does
You know, it's an interesting one. They always see so many friction points when it comes to investing in, well, traditional investing in property. Now I'm not talking about the kind of funds Magnus was talking about, but just investing in traditional real estate. One of the founding tenets of Easy Properties was to reduce all of those friction points to solve them. And so we've been able to invite people, it's often the word that gets thrown around in the Easy environment, but democratise that access to property investing through solving those things, so you mentioned EasyEquities has reached over a million, but it's closer to 2 million now. And in terms of registrations, it is 1.7 million, and Easy Properties is about 300,000 of those clients. We've got over 90,000 separate individuals who are investing in property itself. And through this fractionalisation, we've removed many barriers to entry. So for us, there's no minimum. So people can invest with as little as one rand in residential property. And then there's a long political, social, and psychological attachment to property in this country. And people want to own and invest in property. And although the market has gone through quite a turmoil, different pockets are doing particularly well along the Atlantic seaboard in Cape Town, Stellenbosch.
On what kind of returns they've been enjoying over the past two years
It varies from area to area. So we've tried to look at some high-yielding properties with potentially slightly less capital growth in some of the areas in and around the airports and potentially some of those Atlantic seaboard properties in Cape Town. And then we've also looked at a good mix. And so, generally, we are about to launch some really good student accommodation. We've got two current ones currently offering some 7% net yield, but we've bought those at a 10% discount. There is a particular anchor on those north of nine to 10 to 12%. Still, it's one of the instances that each of these property collections we have as its kind of investment criteria in returns, which also depends on the investors' appetite. Yeah. What risk profile do they have, and what are they interested in investing in?
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