Is a property valuation available?
The municipal value of the property is R1,770,000. The property with extentions is listed in the February 2016 balance sheet at R2,771,427. This property consists of 10 double rooms, all en- suite, a conference room, a kitchen, dining room area for 22 guests, a reception area, a lounge, store room, 2 offices, an entertainment area with braai facilities overlooking the pool and garden and ample parking facilities.
What Advertising/Marketing is carried out?
The business has a web site and long standing commercial clients who make use of the facilities.The business has conference facilities which caters for 22 delegates. The business charge companies R320 per person per day per person which includes a luncheon and beverages. Furthermore they have 10 double rooms where they charge a basic rate of R765 per person, excluding VAT, which includes a continental breakfast. The business also offers lunch and dinner on request. 2 Drivers with 2 vehicles are available at extra cost to collect guests from the airport and to offer transport facilities.
Is the property being let by a letting agency?
The property is part of four guest houses, all in the same area in close proximity, which makes the managing more easy. The operating company oversee the bookings, payments and finances of the business. The one owners house is use has an office and also have 4 double rooms available when the four guest houses are full.
Is a copy of all the lease agreements on the property available?
There is a bond of +/- R1.3m outstanding on this property. A buyer may negotiate to take it over, if full purchase price is achieved then the seller will settle the bond.
Is the business VAT Registered?
The business is VAT registered.
What VAT documentation is on file?
VAT documentation will be made available during due diligence.
Are there up-to-date Management Accounts available?
The sellers provide monthly occupancy figures. We also have the monthly extra income figures which includes income for conference facilities, extra income on lunches and dinners and transport income.
What Balance Sheet and Income Statements are available?
Financial statements, prepared by the auditor for the period ending February 2016 are on file.
What is the age analysis of the debtors book?
90% of the bookings are with commercial clients and long standing companies only about 10% is leisure.
How could the income of the property be increased?
Owner operator could save on the manager salaries. This guest house pays R10,000 towards the in house management and a share of 25% towards the 2 drivers, office manager, office administration and gardener, shared by the four guest houses in the group (R7,800 per month), as included in the expenses.
What is the monthly rates and taxes payable to local authority?
Monthly rate and taxes are R790-67. Average water bill is R2,922, average electricity is R6,838 and Pikitup is at R269 per month. All these expenses are included in the monthly expenses under municipality charges.
What rental deposit has been secured from the tenants?
The bookings are paid by EFT or credit card machine. Only about 10% of the guest pay in cash (notes).
How involved is the Owner in running the business?
The owners are 100% involved in the running of this group of companies.
Do you require a licence?
Zoning and consent letters for the guest house and property are on file.
What are the main assets of the business?
The property and guest house with all furniture and fittings. A full asset list will be provided for a serious buyer and to form part of the sale agreement and due diligence.
Are any items not included in the sale?
All assets as per the asset list will be included in the sale.
What is their overall condition?
The assets are in good working condition and the finishes throughout is of a high standard.
How have they been valued ?
Municipal value of R1,770,000 which excludes the furniture and fittings of the 10 double rooms. The business broker will provide a qualified buyer with the comprehensive valuations.
Which assets are on lease/HP and with whom?
There is a bond of R1,300,000 on the property.
What are their settlement amounts?
Settlement letters and settlement will be negotiated with serious buyers and before a sales agreement is signed.
Will Seller settle or Buyer to take over?
To be negotiated with a sale.
Are they presently insured?
The business and its assets are comprehensively insured.
Well known and well run guest house with excellent occupancy which is an average of 70%. This guest house is situated in between UJ and Wits Universities, next to SABC, Media 24, two private hospitals, Nedcare Rehabilitation Centre, where family members seek accommodation and transport. 70% of the current bookings are from Braamfontein, where they book conference facilities and accommodation.
No real weaknesses are noted, other than service delivery on load shedding from Eskom.
Marketing of commercial companies will ensure increase in bookings.
No real threats are noted.
What is the reason for the sale?
The owners would like to retire
Why is this property a good investment?
Well established guest house with high occupancy rate. Average net profit of R139,390 and ROI of 20%. A buyer can expect to recover his investment within 61 months.
What is the asking price?
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