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  • Mandate: 33740
  • Added: 29 Nov 2019
  • AFS
  • 117

Residential portfolio with a very good rental income

Mpumalanga, Highveld
Mandate 33740
Added 29 Nov 2019
R 70,000,000* ZAR
Stock: R 0
Assets: R 76,200,000
R 394,940 ZAR
Arie Roos
Aldes Longtom

Expertly build houses in various complexes This offers a good investment opportunity with a steady income The properties are well located and currently have a very hi occupancy rate

Residential portfolio with a very good rental income
R 70,000,000* ZAR
Stock: R0
Assets: R76,200,000
R 394,940 ZAR

Expertly build houses in various complexes This offers a good investment opportunity with a steady income The properties are well located and currently have a very hi occupancy rate

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How long has the business been established?
As a professional builder , the Seller build and developed the complexes himself over the past 18 years

How long has the owner had the business?
18 Years

Fully describe this property and its income earning activities.
83 well houses located in neat complexes that are that is registered in 3 different legal entities The buildings are of hi quality with low maintenance and longevity in mind The Seller's property office that is responsible for all management aspects . Responsibilities include : Advertising and marketing / rental contracts / accounting / utility readings and billing / legal issues / inspections / maintenance .

What is the approximate age of the buildings?
Between 10 and 17 Years

What is the zoning of the property and what can be developed thereon?
All developments are zoned , developed , build and managed according to regulations There are no opportunity for further development

Are there building plans available?
Yes ,the building plans will be available in detail during the due diligence process

What is the erf size and the size of the buildings?
There are various complexes and houses

Is a property valuation available?
The property is selling below the value of the Municipality and the developer himself

How does the business operate on a daily basis?
The Seller has a property rental office that manage his greater property portfolio as well as this complexes This office is managing contracts , marketing , inquiries and maintenance

How are the clients attracted to the business?
The houses are advertised on social media , electronic advertising , printed adds and via word of mouth

What are the seasonal trends?
Occupation is constant with a few variations over year-end season

Is the property being let by a letting agency?
The property is fully managed by the Seller's own office

Is a copy of all the lease agreements on the property available?
There are no bonds on the property A very comprehensive lease agreement is in place with all tenants

Are there up-to-date Management Accounts available?
The Seller is keeping very accurate management account statements

What percentage of the business is cash/credit?
The Seller has a very good payment rate on this properties

How could the profitability of the business be improved?
The Seller had a 0% escalation on the rent for a long period Only recently the rent increased with 7% His is property is known for his reasonable rates - that can be increased in the future

Is Seller finance available and for what amount?

What is the monthly rates and taxes payable to local authority?
Readings are taken by Management office and payment is done to the local authorities for actual use of utilities Details are available during the due diligence process

What rental deposit has been secured from the tenants?
All rental deposits are on file

What are the main assets of the business?
Well maintained middle class residential free standing houses ( 83 ) - generally in various complexes The complexes are well located and expertly build to high standards because the owner never intend selling these houses originally The value of all paved areas / perimeter walls are not included is any calculations

What is their overall condition?
The property is very neat and well maintained

How have they been valued ?
The seller , being an active developer with years of experience is confident to say that his own valuations on all properties are relevant and close to accurate He is also constantly in contact with other property developers / Town counsels / estate agents / rental agents and Bankers in the area The seller is willing to explain and collaborate the state of the property market in this area with a Buyer and also details regarding the values

Which assets are on lease/HP and with whom?
There are no bonds registered unto the properties

Are they presently insured?
The properties are ensured by the Seller

Good quality properties with a very high occupancy rate Effective management office with direct marketing without any commission , full administration and in-house maintenance teams Loyal tenants

Poor service delivery by municipalities

Increased income when rental rates are adjusted upwards to match the current market rates There will be very limited transfer costs involved during the sale of shares in the 2CCs Huge saving !

Current uncertainties experienced everywhere is SA

What is the reason for the sale?
The seller's personal health condition is the sole reason for the sale The fact that there are virtually no outstanding liabilities on this portfolio - together with the fact that it will be a sale of shares - ensures an easy transaction

Why is this a good business?
This is a well build housing portfolio - build for an investment not speculation The occupancy rate is above 90% and the good standing payment rate is at 90% The properties is well located and well maintained

Why is this property a good investment?
*The assets presents real solid value *No transfer fees and duties payable with the sale of shares in the CCs * Monthly income of about R 510 000

What is the asking price?
R 70 Million @ 0% VAT rate as a going concern

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Aldes Longtom

2 members
14 active mandates
31 Fourie Street

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