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Networks and Net-Worth…

By Karen Nyenga – CEO of Fine & Country: Sometimes these inspirational quotes are thrown about in daily conversation and up until such a day that they ring true to you, it can just seem like fluff in a puff piece to keep you smiling and on cloud nine – but only for a while, when or as the sun still shines. However, for those who move with purpose and structure, these inspirations become daily affirmations, which when tracked mentally and enacted to a “T” begin to yield goal-oriented manifestations in real life.

If you have been following our series, you will be well aware that our newlyweds have been married now for a while. They have one child and are doing so well in their careers and businesses respectively. These two are seriously the cookie-cutter, picture-perfect couple that many envy from a distance, many love to hate, but can’t find a genuine reason not to want to emulate their continued streak on the up and up.

So as you can imagine, ever since these two got married, bought a house together, settled very well in their neighborhood, a  lot of their peers were inspired by their being so well put together and seamless slide from strength to strength as a couple. For those who knew them in college, they remember the dormitory stories of one day when I make it big I shall be, I shall do and I shall have, to when these two were dating and making those “We” kind of plans. Now they are married their plans have become reality, especially in the realty game.  They have many a dinner party at their home, they entertain so effortlessly and when they make a decision on investments it seems that their individual strengths combined make this couple indomitable .

So what has this to do with networks and net-worth? In every group there are others who by seeing or hearing, are inspired to do better and then sometimes if not most, the others who remain  are unfortunately destined to be the follower who just say congratulations and continue to wish for a break that never seems to come – not that they are doing much to help it along either.

So this is the network – our  couple and our couple’s friends have become “couple goals” for many who follow their lives on these social media platforms, as well as on publications noting their professional accolades. They seem to have inadvertently created a secret society of sorts where real wealth seems to be attracted to them and wants to multiply around them – no juju involved…

They invest in shares, they invest in bonds, they invest in other industries and also they have started collectively to invest in real estate. See the thing about coming together as a group to invest in certain spheres is that the risk is reduced, this is not only speaking about the financial risk, but also the intellectual risk. Someone in a group usually knows more by virtue of experience, exposure or interest, than others and the task to inform, educate, encourage and convince others on such investment decisions is theirs.

Our couple who started off in the real estate game a bit earlier than their peers went through the arduous task of house hunting and going through the acquisition process, so this is something they didn’t really have to twist the arms of their friends to jump on the bandwagon for. Not only do most of their friends now own a property of their own or at least well on their way to owning, they now each have an appetite to invest more in the real estate sector. They have now looked at investing in apartments to turn into the current real estate phenomenon of Air B n B.

Air B n B or Buy to Let

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Because they have done a bit of research, they have found that there are two ways to use the short stay rentals model to make money, on a high return short term basis (rent other peoples premises, furnish and lease out)  and a more long term buy to let asset based model where one acquires the units and lease out the return profits are slightly delayed as the capital outlay of acquisition has to be recouped for the real profits to be experienced.

Property Flipping

A way of encountering a profit margin by purchasing run down properties, renovating them, staging them for presentation for sale to the market and releasing at a profit.

Land Developing & Banking

Acquiring land to service and create a new community for the eventual sale of individual smaller stands to obtain a profit is land development. A more tactical and highly speculative investment is that of acquiring “cheaper”  land in an area which still hasn’t had much activity happening, but seems to be in the cusp of development interest due to population expansion or business activity in the area, and then disposing when the area is viewed as more valuable, is what we term as land banking, it is a long term plan, not for those who are looking at quick returns.

Cluster Development

We see a sprouting of increased density formations in both high and low density suburbs, with these  new structures being constructed on our once single family owned properties of one acre sizes and above. The latest move is to subdivide these large tracts – a plan which if compliant to council regulations is encouraged as a way to deal with a whole host of urban planning matters. This is a costly mode and requires meticulous planning on design, finances and a host of associated services and requirements.

There are endless ways that people can invest in real estate and with these few examples it is easy to see that if your network is not actively working to secure financial stability currently and in the future, they are definitely affecting your net-worth.

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