INTRODUCTION 

Over the years, the issue of access to the commercial property financing domain has been viewed as secluded by most potential investors and other stakeholders and even worse for the township inhabitants in South Africa. In addition, interested parties or stakeholders opted for less demanding business venture alternatives such as investing in stocks and shares through third parties. E.g Companies who specialize in commercial property. This was mainly due to their lack of expertise thereof and the inaccessibility of Financing. According to Investec, “the informal/township economy makes up an estimated 17% of the country’s overall employment” and therefore the focus on the incline of an opportunity to expand and develop the township economy by various means, including the implementation of accessible financing for commercial property in the township.

WHAT IS COMMERCIAL PROPERTY FINANCING?

According to Fundingguru “A commercial property is defined as one from which you make a profit, either from capital gains or rental. This covers everything from buying or renting out a garage, purchasing a shopping mall or hotel.”

Currently, mortgage brokers like Umastandi has made it convenient for target township areas by providing finance and training to develop existing township property. According to TUHF, “This finance is designed to regularise title if required, use peoples’ property equity to gear a rental enterprise and to ensure that construction is properly designed and constructed with all the necessary planning permissions in place.”

If you’ve ever found yourself with a financial interest in commercial real estate, particularly within the informal economy or as inhabitants thereof with questionable means of access to funding, the country’s market trend is currently in favour of such an investment opportunity. With the real estate always on an incline and property always appreciated, it’s clear to map out that inhabitants everywhere are always looking for a roof over their heads. The harsh economy makes renting and owning property more difficult for the 

country and especially the middle class. Whereas we’ve seen many people opting to relocate to the townships and rather commute daily to their work environments. With this being said, a lot of individuals still want their independence and a convenient livelihood amongst themselves whereby they’d opt for accommodation outside their homes hence forming the basis of renting. The sustainable building of a relationship between the lessor and the lessee achieves a strong economic freedom in the townships. Overtime families and homeowners in the township settlements have managed to provide for their loved ones by letting out rooms and it has forever been a dream for many to achieve the same, however start up capital for building rooms was an issue. Those with financial literacy eventually opted for buying property shares as it was much easier and convenient compared to seeking funding. But with buy to let options implemented by commercial property financing companies like Umastandi for homeowners with title deeds, there’s a green light for such potential investors.  The market is open to the above-mentioned groups and funding is now available and accessible to kick-start a new formal, fruitful and sustainable venture in real estate, however applications are obviously assessed on their own merits and the property yield is also binding on certain and or specified terms.

CONCLUSION

South Africa’s townships are home to many entrepreneurs and are constantly developing, giving birth to a new order which contributes largely to the country’s economy. The markets and commercial banks in the 21st Century are still not inclusive in terms of financing for commercial loans to individuals and investors in such demarcated areas due to the risks involved in the acquisitions and procedures thereof regardless of the rapid growth and the contribution they constitute in the economy. However the near future is promising as financing has now more than ever become accessible to the inhabitants and homeowners in townships, furthermore training and skills are also being offered for this particular field and a chance to become homeowners is vested in the expansion and development of the township economy and can financially liberate the inhabitants of the township streets.