Wealth Migrate

Blog

Real Estate’s Gutenberg Moment has arrived

“German blacksmith, goldsmith, printer, and publisher who introduced printing to Europe. His introduction of mechanical movable type printing to Europe started the Printing Revolution and is widely regarded as the most important invention of the second millennium, the seminal event which ushered in the modern period of human history. [1] It played a key role in the development of the Renaissance, Reformation, the Age of Enlightenment, and the scientific revolution and laid the material basis for the modern knowledge-based economy and the spread of learning to the masses. [2] “

Some would question whether real estate requires a Gutenberg moment. Statistics prove the necessity resoundingly, since only 13% of the world’s population has access to owning real estate and share in all the benefits property ownership delivers. The low real estate ownership percentage is not surprising, even in the democratic, information- and technology-based environment we find ourselves in these days. Access to real estate still requires large sums of money as well as expertise and access to financing. To top it all, there are still many countries globally, where direct property ownership accompanied by the receipt of title deeds, are not a reality and citizens can only lease land from the state or are given rights to live on land by a tribal leader or chief. Buying property remains a complex process. It involves several steps and specialized knowledge such as given by lawyers in order to ensure the correct and legal transfer of the property. The legal and financial interests of the both the buyer and seller need to be protected.

What was so significant about 10 June 2016? Until this day only accredited, meaning high net worth investors, could participate in commercial real estate opportunities. They needed to invest amounts of $100 000 and more. On 10 June 2016, it was the first day ever, that non accredited investors were able to invest in commercial real estate investment, starting at levels of $10 000. Investors from all over the world could, for the first time partake, in a commercial real estate investment in a first world country. Very soon investment levels will be down to $100. Investors investing $100 will get the same yields and benefits, as the property experts and millionaires, they are co-investing with. A case study can better explain the true benefits to the average real estate investor. See the case study below.

Take the case of a 29-year-old engineer, ready to make his first real estate investment. He is permanently employed and has savings in order to get started:

THE TRADITIONAL WAY:

Approach a local real estate broker in order to view listings and see what is available and affordable.

Buy an online course from a guru, either by recommendation from family, friends or research on the internet.

Attend seminars on investing in real estate in your area.

View many, many prospective properties enlisting the services of several real estate brokers.

Cross check all information from the local real estate broker, who rarely is an authority on investment property and is largely driven by earning commission.

Select a property.

Put in an offer and apply for a mortgage.

If all goes well, take transfer of the property and assume all the risk.

Pay commissions.

Start the process of selecting a suitable tenant.

Make a thorough study of rental legislation and the consumer protection act.

Entrust your investment to a managing agent or embark on the management process yourself.

Deal with rental and maintenance issues, mortgage repayments, costs of levies.

Deal with inefficient city council employees with regards to utilities and rates and taxes accounts.

Experience how little protection landlords have in South Africa and the co