One woman makes R75,000 per month by renting out back rooms in Soweto – but was rejected for a R1.5 million bank loan

He is not wrong in saying that banks struggle to accommodate the informal business sector, but I think this is a poor example to use.

When it comes to property, zoning laws, town planning regulations and approved building plans matter. You cannot simply build multiple rooms, rent them out and expect a bank to finance the property based purely on the rental income it generates.

Without the necessary approvals and compliance, the bank faces significant risks, particularly when it comes to the property's value and its suitability as security for the loan.

There is certainly a need for banks to better understand and support the informal economy, but we also need to distinguish between a profitable business and a property that provides acceptable security for a mortgage bond.
 
Alcock explained that Nthabiseng decided to test the bank out and applied for a R1.3 million vehicle loan to purchase a Mercedes-Benz.

This was approved within 20 minutes by the same bank that was unwilling to extend R1.5 million to fund her business venture.

Alcock pointed to this as an example of banks being willing to finance depreciating vehicles, rather than extend credit to build businesses.
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😂 ... first thing GG...go and look up what part "collateral" and "risk" play in any loan decision.
 
I've read 2 of GG Alkock's books and run a small side hustle business that takes me into the informal sector often - he is not wrong about the potential.
But, IMHO, he has poor understanding of the "responsibility" (for want of a better term) of banks when it comes to managing the money of their clients and adherence with SARB/FSCA legislation
 
Since my reality shifted I am living in a granny flat in a backyard in a residential area.

I only have to look after myself now so 2 rooms and a lounge are perfectly fine for my needs (bedroom, study, lounge).
Anyway, the person that owns this property bought it with the intention of building lots of little rental units as per above, I was not aware of that when I moved in. I will stay till that happens then I will move on, It is not my field of expertise but I have been wondering to myself how turning a traditional family home in a residential area into a boarding house will affect the area, property value etc.

One thing the new owner did not count on is that the main sewage line for the street is buried in the back of her property and if for any reason the municipality need to work on it whatever she builds in the garden or over the sewage line will need to be moved or destroyed.

Even if that were not the case, the water, power, sewage and parking are all designed for a nuclear family, not for 10 to 20 rental units.

What saddens me is the plan to replace all the lawn with brick because less maintenance.

I will be long gone by the time construction starts because I do not need to live in a construction zone or whatever you call a property filled with multiple single room structures.

The above article is an interesting read because the owner of this property has done the same with several properties in Soshanguve
 
The Harappans of the Indus Valley "invented" town planning 2,000 years before The Baby Jeezuzz arrived, and it has been a part of civilized living ever since for a reason.
Other than our government's total mismanaged and neglect of infrastructure, everyone being able to build whatever the fsk they want wherever the fsk the want is probably one of the biggest factors contributing to lack/failure of basic services.
You cannot build 30 units on a residential property planned for one family (even an extended one) and expect the water, sewage, refuse and electricity infrastructure to survive .

Areas where this kind of uncontrolled building are allowed look like schidt-holes for a reason
 
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