“The wealthy don't invest in property because they are rich, they are rich because they have invested in property,” says Van Staden.
This is according to Gert van Staden, CEO of the P3 Investment Group, who says it is a fallacy perpetuated, perhaps, by the fact that property is the preferred asset class of the world's wealthiest, and the reality is that property investors are generally wealthy.
“The wealthy don't invest in property because they are rich, they are rich because they have invested in property,” he says.
“The truth is that you don't need to be rich, or even educated or experienced, to invest in property successfully.”
There are two reasons for this, says Van Staden. Firstly, property investors do not need a lump sum investment, or even large monthly investments to acquire an income-producing property asset.
For example, an investor does not need to have R500 000 in cash to acquire a R500 000 buy-to-let property. This is because an investor can get a mortgage bond, allowing him or her to buy a property with money borrowed from the bank.
“In investment circles, this is called leveraging or gearing, terms that most people assume are only for highly-educated investment specialists,” he says.
“But buy-to-let property investment allows ordinary South Africans earning ordinary salaries to also implement the highly effective practice of gearing, which the world's wealthiest have used for decades to create wealth without using their own money and to significantly increase their return on investment.”
Of course, Van Staden says the bond has to be repaid every month, but the property generates an immediate and ongoing passive monthly income: the monthly rental. The rental keeps pace with inflation as the rental increases year after year, which allows the investor to use the tenant's rental to repay the bond.
It is entirely possible, if the right property in the right area is selected, to obtain a 100% mortgage loan to acquire an income-producing property and earn a monthly rental from this property that will not only cover the bond repayments, but the other monthly property expenses too, he says.
“So, you don't have to be rich to invest in property - you can acquire an income-generating property asset without spending your own money.”
Secondly, Van Staden says buy-to-let property investment is based on a proven step-by-step system that delivers virtually guaranteed success. This allows ordinary South Africans earning ordinary salaries to become successful property investors with no qualifications or experience, and very little time, training or effort.
Because it is based on a tried-and-tested system, with built-in risk management and contingency measures, he says a successful buy-to-let property investment does not depend on the skills or qualifications of any person.
It can be compared to owning a franchise: you don't need qualifications or experience to run a franchise successfully, you simply have to implement a proven system.
So, in reality, Van Staden says a successful property investment requires little more than learning how the simple, streamlined property investment system works and implementing this system following step-by-step guidelines.
"Don’t let the fallacy that 'property investment is only for the rich, educated or experienced' prevent you from building real wealth this year,” says Van Staden.
"All that is really required to build wealth through buy-to-let property investment is the willingness to learn how to implement a simple, tried-and-tested system that allows you to acquire and pay off income-generating properties spending little or nothing of your own money, time or effort."