How to Start a Successful Property Stokvel

If you live in South Africa, then you’re no stranger to stokvels.

They have been around for many years. However, the concept of property stokvels- also known as investment clubs- is fairly new. Property stokvels help people to invest in real estate in South Africa with little risk and money involved.

In today’s blog post, I’ll be sharing my top tips on how to start a successful property stokvel:

What is a stokvel?

Have you heard of a stokvel, but don’t know exactly how they work? It’s quite simple.

A stokvel is an investment club comprised of several members who all contribute a small amount monthly. At certain intervals, each member will receive a lump sum payment, which they pay back in time with their monthly contributions.

Stokvels have been a prominent part of black South African cultures for many years. They were traditionally used to help members buy groceries and pay off debts.

While stokvels have continued to grow in popularity, they are now oftentimes used for investments.

How to start a successful property stokvel

There are so many articles out there that can teach you how to start a stokvel. However, none actually tell you how to start a successful property stokvel.

Anyone can create a stokvel, but if you don’t know what you’re doing, you will only waste your time and money. Here are a few tips to creating a lucrative property stokvel:

Pick the right members

When you’re a stokvel member, you rely on other members to fulfill their duties in the same way that other members rely on you. If stokvel members aren’t serious, dedicated and committed, the entire stokvel can fail.

When starting a stokvel, it’s important that you only ask people that you trust.

Ensure you have the correct structure

I have worked with several stokvels that, despite existing for several years, have never been approved for a bond. Why?

The leading cause is because they have the wrong structure. South African banks can be sticklers when it comes to approving stokvels for bonds. Everything has to be by the book.