A Sample Property Development Business Plan Template
By: Author Tony Martins Ajaero
Categories Business Plans
When you talk about property development business, loads of entrepreneurs will back off because they know that it is a business that involves huge startup capital. Beyond every reasonable doubt, one of the most profitable, creative and interesting aspects of the real estate industry in south africa is property development.
As a matter of fact, developers are major players when it comes to determining the prices of properties. Although this type of business venture can be risky, but in other to make it big in the industry as a property developer, you just have to take calculated risks.
Some factors that are major concerns in the property development business are cost increase as a result of inflation, currency devaluation and economic challenges. Unforeseen delays on the part of government agencies, litigation and also delays from contractors can lead to substantial cost increase especially if the project is heavily dependent on bank loans.
If perhaps during this period there is a change in the supply and demand dynamics of the property sector, the project can be affected negatively. Below is a sample property development company business plan template that will help you successfully write yours with little or no stress.
How to Write a Property Development Business Plan for South Africa
1. industry overview.
Property development industry is a many-sided business that covers all activities ranging from acquiring raw land to selling or renting or leasing of fully finished and furnished properties. Developers are responsible for turning ideas into real properties; i.e. they acquire land, they finance real estate deals, they engage in building projects and they sell, rent, lease and manage properties on behalf of their clients.
In 2016, the investment volume in South Africa’s real estate saw a 55.2 percent increase, in spite of economic challenges, weak currency and political uncertainty. The South African listed property industry has risen nearly 9 percent in the first nine months of the year, about double in equities achieved which was 4.82 percent. At 7%, South Africa’s real estate market continues to demonstrate maturity and ongoing resilience.
The South African property sector is valued at R5.8 trillion, according to the latest Property Sector Charter Council’s (PSCC) report. New research shows 75 percent of global real estate investment takes place in highly transparent markets with South Africa ranking 25th out of 109 markets.
Property Divisions in the Pretoria region enjoyed a 49 percent increase in turnover and a 42 percent increase in unit sales. Foreign buyers only make up around 5 percent of new homeowners in South Africa.
Just like all other investment vehicles, there are potential down sides that you need to look out for as a property developer. One of the major risks in property development is a sudden down turn in the economy. Property development could take a period of two to three years from conception to completion depending on the size of the project and the cash flow.
As a matter of fact, some projects can even take much longer than that. Because of the time involved in developing properties from start to finish, loads of unanticipated things could crop up.
The property development cum real estate industry is highly regulated in South Africa and anyone who aspires to start a property development company must apply and obtain a license before they can legally operate in the industry.
Lastly, as a property developer, it is very important to be creative, to be able to use your ideas to meet the rapidly changing needs of the society when it comes to properties.
2. Executive Summary
Lucas Polokwane® Property Development Company is a South African based property development company. Our head office will be located in a centrally located office facility in the heart of Cape Town – Western Cape Province. We chose Western Cape because reports show that the Western Cape will continue to outperform all other areas of the country, remaining the top performing major metro housing market in SA. House price inflation in the region has risen by over 10.35 percent, with no indication of it slowing down.
Although our Head Office will be located in Cape Town, but we will open our branch offices in major cities in South Africa within our first five years of operation. Lucas Polokwane® Property Development Company will engage in property development projects for a wide range of clients. We will work towards becoming one of the largest property development companies in South Africa.
We are quite aware that property development requires huge a capital base, which is why we have perfect plans for steady flow of cash from private investors who are interested in working with us. We can confidently say that we have a robust financial standing and we are ready to take on any opportunity that comes our way in the real estate industry.
As part of our plans to make our customers our number one priority and to become one of the leading property development companies in South Africa, we have perfected plans to adopt international best practices. Lucas Polokwane® Property Development Company has perfected plans that will help us to become a specialist in turning slums into beautiful cities and turning dilapidated buildings into master pieces, and that hopefully will be our brand and signature.
Lucas Polokwane® Property Development Company will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Lucas Polokwane® Property Development Company is owned by Lucas Polokwane and his immediate family members. Lucas Polokwane has a Degree in Building Engineering from the University of Cape Town and he has successfully acquired over a decade of experience prior to starting his own company.
Other investors with the same investment ideology whose names cannot be mentioned here for obvious reasons are going to be part of the business especially as it relates to pooling cash together for property acquisition, renovation and beautification.
3. Our Products and Services
Lucas Polokwane® Property Development Company is going to offer varieties of services within the scope of the property development industry in South Africa. Our intention of starting our property development company is to favorably compete with leading players in the real estate industry both in Western Cape and in the whole of South Africa.
Our business offerings are listed below;
- Residential additions, alterations and renovations
- Construction management for residential remodeling
- Fire and flood restoration
- Home improvement
- Porch construction
- Sunroom additions
- Kitchen and bathroom upgrades
- Disaster repairs
- Manage Properties and Facility for Clients
- Property Makeover Services
- Real estate consultancy and advisory services
4. Our Mission and Vision Statement
- Our vision is to become one of the top 10 property development companies in South Africa within the first 10 years of starting Lucas Polokwane® Property Development Company.
- Our mission is to help people, businesses, property owners and clients in Cape Town – Western Cape and throughout South Africa develop and remodel their homes, offices and properties to fit into the ideal mental picture they have.
Our Business Structure
Our company’s structure is not entirely different from what is obtainable in the real estate industry. As a matter of fact, we have created a structure that will allow for easy growth for all our employees and also, we have created platforms that will enable us attract some of the best hands in the industry.
We are quite aware that the success of any business lies in the foundation on which the business is built on, this is why we have decided to build our property development company on the right business foundation. We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all our stakeholders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target.
Lucas Polokwane® Property Development Company is fully aware of the modus operandi in the property development line of business, hence adequate provision and competitive packages have been prepared for independent sales agents. Our marketing department will be responsible for managing this aspect of our business structure.
Below is the business structure we will build Lucas Polokwane® Property Development Company on;
- Chief Executive Officer
- Company’s Lawyer/Secretary
Admin and HR Manager
- Head of Construction and Renovation
- Business Developer/Sales and Marketing
- Customer Service Executive/Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Officer – CEO (President):
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions.
- Creates, communicates and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Responsible for planning, management and coordinating all projects on behalf of the company
- Supervises renovation projects
- Ensures compliance during project execution
- Provides advice on the management of projects
- Responsible for carrying out risk assessment
- Uses IT systems and software to keep track of people and progress of ongoing projects
- Ensures that project desired result is achieved, the most efficient resources are utilized and different interests involved are satisfied.
- Responsible for drawing up contracts and other legal documents for the company
- Consults and handles all corporate legal processes
- Develops company policy and position on legal issues
- Researches, anticipates and guards company against legal risks
- Represents company in legal proceedings (administrative boards, court trials et al)
- Plays a part in business deals negotiation and take minutes of meetings
- Responsible for analyzing legal documents on behalf of the company
- Prepares annual report for the company
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Designs job descriptions with KPI to drive performance management for clients
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Defines job positions for recruitment and managing interviewing process
- Carries out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities
- Responsible for handling property development services
- Establishes and enforces company’s engineering and construction standards
- Ensures that renovation / construction work meets or exceeds standards within a designated geographic area.
- Provides overall direction on assigned construction projects; reviews and makes recommendations on planning and design of projects; negotiates contracts or participates in contract negotiations; monitors day‐to‐day progress and activities on project construction sites.
Marketing and Sales Executive/Business Developer
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Responsible for supervising implementation, advocate for the customer’s need s, and communicate with clients
- Finds and qualifies land for development based on company’s land requirements; maintains a land search database; initiates discussions with property owners about the possible sale of property
- Develops, executes and evaluates new plans for expanding sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managers with financial analyses, accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Front Desk/Customer’s Service Officer
- Receives visitors/clients on behalf of the organization
- Receives parcels/documents for the company
- Handles enquiries via e-mail and phone calls for the organization
- Distributes mails in the organization
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the line manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s properties that are put up for sale, promotional campaigns etc. to ensure accurate information is supplied to clients when they make enquiries
6. SWOT Analysis
The fact that property development is a very rewarding business in South Africa does not mean that there are no challenges in the industry. Starting a property development business in South Africa comes with its own fair share of challenges as you would have to abide by the law and also compete with entrepreneurs in the real estate business value chain.
In order to compete favorably in the property development industry, we have been able to hire the services of HR consultants to help us conduct critical SWOT analysis for us. Here is a summary of the result of the SWOT analysis that was conducted on behalf of Lucas Polokwane® Property Development Company.
Some of the strengths that we will be bringing to the table in the industry is our robust relations with property owners and properties investment moguls in the whole of South Africa; our access to funding and our team of experts who have cut their teeth in the property development line of business; our commission structure and relationship with freelance real estate agents in Cape Town – Western Cape and other province in South Africa will also count towards our advantage.
As a newbie in the property development line of business, we may have challenges competing with big time property developers in South Africa; that perhaps is part of our weakness.
The opportunities in the property development industry especially in Cape Town – Western Cape is massive considering the fact that reports show that the Western Cape will continue to outperform all other areas of the country, remaining the top performing major metro housing market in S.A. We are ready to take advantage of any opportunity that comes our way.
Some of the threats that we are likely going to face as a property development company operating in South Africa are unfavorable government policies , and global economic downturn; global economic downturn usually affects spending power and the real estate industry is known to encounter decline in sales and profits during this period. There is hardly anything we could do as regards these threats other than to be optimistic that things will continue to work for our good.
7. MARKET ANALYSIS
- Market Trends
A notable trend in the property development industry in South Africa shows that the biggest group of home buyers are millennials; in fact, buyers who are 36 years old and younger continue to purchase homes at a higher rate than other age groups.
The market trend in the property development sector is that there are no fixed profit projections when engaging in a property development deal.
The profit you stand to gain depends on loads of factors amongst which are your attention to details, ability to turn a slum into an edifice and knowing exactly when to seal a property development deal. If you are able to get all the above stated factors right as a property development company, your gains will always be far more than your loss.
Another obvious trend that is common with property development companies in South Africa is that there is also an increased demand for luxury cluster homes in areas like Hyde Park, Atholl, and Morningside. In Gauteng, luxury homes that move away from the noise and congestion of traffic have become popular. High-end buyers are also opting for homes that are still opulent, yet offer more security and convenience.
This explains some of their big sales including the sale of a R33 million French style house in Constantia Upper Cape Town, and a R35 million property in Zimbali.
One thing is certain for every property development company; if they are hardworking, creative and proactive, they will always generate enough income to meet all their overhead and operational cost, keep their business going without struggle and make reasonable profits from all business deals that they are involved in.
8. Our Target Market
As a property development company, our target market cuts across property owners of different class and people from all walks of life. We are coming into the property development industry with a business concept that will enable us work with people of different financial capabilities.
As a matter of fact, our target market is the whole of South Africa and we have put plans in place to recruit freelance agents to represent our business interest wherever they are located in South Africa. Below is a list of the people and organizations that we have specifically designed our services for;
- Families who are interested in acquiring a decent and well renovated home
- Corporate organizations who are interested in acquiring their own property
- Home owners who are interested in developing/remodeling and selling off their homes
- Properties owners who are interested in remodeling and selling off their properties
- Foreign investors who are interested in owning properties in South Africa and remodeling the property
- The government of South Africa (Government contracts)
- Managers of public facilities who would want to engage property development companies to help them develop/remodel properties under their care
Our competitive advantage
The property development industry is a highly competitive industry. Clients will only hire your services if they know that you can help them remodel their homes to fit into the picture of the ideal home they have in mind.
We are quite aware that to be highly competitive in the property development industry means that you should be able to deliver consistent quality property development jobs and you should be able to meet the expectations of your clients at all times.
Lucas Polokwane® Property Development Company might be a new property development company, but the owner of the business is a guru in the industry and has what it takes to grow a business from scratch to become a top brand within the shortest time possible.
Aside from our robust experience and expertise of our team, we have a very strong online presence that will enable us attract clients from all across South Africa.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business objectives. We will also engage freelance marketing agents on a commission level to help us market our services.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Lucas Polokwane® Property Development Company is established with the aim of maximizing profits in the property development industry. Although we are a property development company, but part of our work force are also licensed real estate agents hence we intend generating additional income from diverse means in the real estate agency.
We have successfully built a vibrant real estate network that covers the whole of South Africa so as to help us build a profitable business. Below are the sources we intend exploring to generate income for Lucas Polokwane® Property Development Company;
10. Sales Forecast
It is a known fact that as long as there are property owners in South Africa, there will always be need to for them to remodel their properties from time to time to conform with the trends in the neighborhood or city.
We are well positioned to take on the challenges that are synonymous to property development businesses in South Africa, and we are quite optimistic that we will meet out set target of generating enough profits from the first months of operation and grow the business beyond Cape Town to other Provinces in South Africa within record time.
We have been able to critically examine the property development line of business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions peculiar to similar startups in South Africa.
- First Fiscal Year: R500,000
- Second Fiscal Year: R1.2 million
- Third Fiscal Year: R1.7 million
N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and any major competitor offering the same services we do within the locations where we have a strong business presence. Please note that the above projection might be lower and at the same time it might be higher since some factors are beyond our control.
- Marketing Strategy and Sales Strategy
We are mindful of the fact that there are competitions in the property development market in South Africa, hence we have been able to hire some of the best business developers to handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis so as to be equipped to meet their targets and the overall goal of the organization. The training is not restricted to only our full – time employees but would also extend to our freelance brokers.
Our goal is to become one of the leading property development companies in South Africa which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force in the industry.
Lucas Polokwane® Property Development Company is set to make use of the following marketing and sales strategies;
- Introduce our business by sending introductory letters alongside our brochure to stake holders in the real estate industry
- Promptness in bidding for properties that are put up for remodeling and development
- Advertise our business in real estate/properties magazines and websites
- List our business on yellow pages (local directories)
- Attend real estate related expos, seminars, and business fairs et al
- Create different packages for different category of clients in order to successfully remodel or develop their homes/properties
- Leverage on the internet (social media platforms) and our official website to promote our business
- Encourage word of mouth marketing especially when we have a home for sale
11. Publicity and Advertising Strategy
We have been able to work with our consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the property development industry by storm which is why we have made provisions for effective publicity and advertisement of our company.
Below are the platforms we intend to leverage on to promote and advertise our property development business;
- Place adverts on both print and electronic media platforms
- Place our flexi banners with our company’s logo and contacts in every property we put up for sale
- Sponsor relevant TV shows so as to be able to communicate our brand and what we do
- Maximize our company’s website to promote our business
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, LinkedIn, Google+ and other platforms (real estate online forums) to promote our business and list our properties for sale and for lease.
- Install our billboards in strategic locations all across Western Cape Province
- Distribute our fliers and handbills in targeted areas from time to time
- Attend landlord and residents association meetings with the aim of networking and introducing our business.
- Ensure that all our workers wear our branded shirts and all our vehicles are branded with our company’s logo
12. Our Pricing Strategy
Part of our business strategy is to ensure that we work within the budget of our potential clients to help them develop or remodel their properties to meet their expectations. It is the practice in most parts of the world for properties to be valued by professionals based on the area the facility is located, the type of facility and other factors.
Since we are not directly in control of the pricing system in the real estate industry, we can only abide by what is obtainable when it comes to fixing a price for a property development contract. But one thing is certain, we will ensure that we deliver excellent jobs when have we are contracted to do so.
Lastly, we will ensure that we keep our fees below the average market rate for all of our clients by keeping our overhead low and by collecting payment in advance. In addition, we will also offer special discounted rates to our clients from time to time especially when they recommend clients to us.
- Payment Options
At Lucas Polokwane® Property Development Company, our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them but at the same time, we will not accept payment by cash because of the volume of cash that will be involved in most of our transactions. Real estate deals usually involve huge amounts of money.
Here are the payment options that Lucas Polokwane® Property Development Company will make available to her clients;
- Payment by via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will help us achieve our aims without any hitches and we will also pay our freelance agents (real estate brokers) with same platforms. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our services.
Any agent who intend paying with cash will be directed to deposit the money into our corporate account and then present their payment tellers to us.
13. Startup Expenditure (Budget)
From our market survey and feasibility studies , we have been able to come up with a detailed budget on achieving our aim of establishing a standard and highly competitive property development company in Cape Town – South Africa and here are the key areas where we will spend our startup capital;
- The total fee for incorporating the business in South Africa – Name reservation application costs R50 and company registration R125
- The budget for permits and license – R2,000
- The cost for hiring business consultant – R2,500.
- The cost for computer software apps (Accounting Software, Payroll Software, CRM Software, Microsoft Office, QuickBooks Pro, Project Management Software) – R7,000
- The budget for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – R5,400.
- Cost for payment of rent for a suitable Office facility with enough space in Cape Town – Western Cape for 12 months at R1.76 per square feet in the total amount of – R85,600.
- The cost for office remodeling (construction of racks and shelves) – R20,000.
- The cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – R15,000
- Other start-up expenses including stationery ($500) and phone and utility deposits ( R2,500 ).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – R100,000
- Working capital (investment fund): R2,000,000 (2 Million Rand)
- The cost of launching our official website – R600
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – R5,000
Going by our research and feasibility studies, we will need about R2,200,000 ( 2.2 Million Rand ) to set up a property development company in Cape Town – Western Cape.
In the property development business, the larger your capital base, the greater the opportunities you can access and the more profits you will make. Despite the fact that we have a working capital of 3 Million Rand , we have been able to create a business relationship with our banks so as to easily access loans when the need arises.
Generating Startup Capital for Lucas Polokwane® Property Development Company
Lucas Polokwane® Property Development Company is a business that will be owned and managed by Lucas Polokwane, his immediate family members and other business partners. They decided to restrict the sourcing of the startup capital for the business to just three major sources.
- Generate part of the startup capital from personal savings and sale of stocks
- Generate part of the startup capital from friends and other extended family members
- Generate a larger chunk of the startup capital from the bank
N.B: We have been able to generate about R200,000 ( Personal savings R150,000 and soft loan from family members R50,000 ) and we are at the final stages of obtaining a loan facility of 2 million Rand from the bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers they have, the capacity and competence of their employees, their investment strategy and the business structure. If all these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Lucas Polokwane® Property Development Company is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to offer our developed properties and services a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Lucas Polokwane® Property Development Company will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts various banks in South Africa: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Renting of Office Facility and remodeling the facility in Cape Town – Western Cape: Completed
- Conducting Feasibility Studies: Completed
- Generating capital from the CEO / President and Business Partners: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business: In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with key players in the industry: In Progress
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Starting A Rental Property Business in South Africa – Business Plan (PDF, Word & Excel)
Posted by BizBolts | All Articles , Business Ideas , Business Plans
Starting a rental property business in South Africa is a good investment. There are so many attractive places and neighborhoods in South Africa and the need for affordable accommodation has been growing over the years. South Africa has a growing demand for rental properties due to the high rate of urbanization and the rising population. As more people are moving to urban areas for work and education, the demand for rental properties continues to increase, leading to continuous rental income stream for property owners. Being one of the Africa’s most vibrant and developed nations, the real estate industry in South Africa continues to grow. This can be seen by the size of the property market in the country. Currently, the residential property market in South Africa is valued at over R5 trillion. Plus there is a further R520 billion land officially zoned for commercial and residential development. This article will outline how to start a rental property investment business in South Africa, and the rental property business plan – PDF, Word and Excel.
Acquiring Rental Properties in South Africa
There are plenty of rental properties to buy available on the market. To find rental properties to buy in South Africa, you can start by conducting market research on areas with high rental demand and strong rental rates. Once you have identified potential locations, you can use online property portals (eg property24.com , and privateproperty.co.za ),classified ads, and real estate agents (eg remax.co.za , seeff.com , pamgolding.co.za and rawson.co.za ) to search for properties that fit your investment criteria. It is important to be proactive and persistent in your search, to ensure that you find profitable rental properties with good returns. Additionally, you may want to consider networking with other real estate investors and attending property auctions as additional ways to find rental properties to buy. By staying informed on market trends and being proactive in your search, you can increase your chances of finding a profitable rental property investment in South Africa. Our rental property business plan include a step by step guide of acquiring properties in South Africa.
Funding For Acquiring Rental Properties
You can get home loans from banks to finance the acquisition of rental properties in South Africa. Banks usually provide you with a mortgage bond covering up to 90% of the purchase price, meaning you will have to contribute 10% for the rental property acquisition, which also acts as a deposit payment. In addition for the 10% deposit, you will also have to pay for the transfer costs and bond registration costs. One of the main advantages of purchasing rental properties using mortgage bonds is that it allows you to leverage your investment. With a mortgage bond, you can purchase a property with only a 10% deposit and borrow the remaining 90% of the purchase price from a bank. This means that you can acquire a more expensive property than you would be able to if you had to pay the full purchase price upfront. For example, if a property costs R500 000, that means you only have to contribute R50 000 towards the purchase price, with the remainder R450 000 coming from the bank. Another advantage is that mortgage bond repayments are usually spread over a long period of time, which makes it easier to manage cash flow and minimize risk. Also interest on mortgage bonds is tax deductible, which can result in significant tax savings for the property owner. The Excel financial statements of our rental property business plan includes a bank loan amortization table which automatically calculates the monthly repayments that you will make for the mortgage bond.
Finding Tenants For Your Rental Property In South Africa
There are several ways to find tenants for your rental property in South Africa. One of the most effective ways is to advertise your property on various online property portals and classified websites, such as Private Property, Property24, and Gumtree. These platforms attract a large number of property seekers, making it easier to find potential tenants quickly. Another way is to use social media platforms like Facebook, Twitter, and Instagram to market your property to your followers, friends and property groups. You can also put a “For Rent” sign outside the property or distribute flyers in the surrounding area to attract potential tenants who may not be actively searching for a property online. Additionally, you can enlist the services of a reputable property management company that has an existing network of potential tenants and the expertise to market your property effectively. By using these methods, you can easily find suitable tenants for your rental property in South Africa.
Managing Rental Properties
Managing a rental property in South Africa involves various tasks such as finding tenants, collecting rent, handling maintenance issues, and addressing tenant concerns. Landlords can choose to manage their properties on their own, or they can hire a property management company to handle these tasks. Hiring a property management company has the advantage of freeing up the landlord’s time and ensuring that the property is well-maintained and managed professionally. The property management company will typically charge a fee, usually a percentage of the monthly rental income, for their services. However, managing a rental property on your own can also be rewarding, especially if you have experience in property management and are willing to invest the time and effort required to manage the property effectively. Regardless of whether you choose to manage your rental property on your own or use a property management company, it’s important to stay up to date with South African rental laws and regulations to ensure that your property is managed in compliance with the law. All the costs associated with owning and managing rental properties should be included in the buy to let property business plan.
Making Money With Rental Properties In South Africa
One of the obvious ways to make money with buy to let properties in South Africa is through rental income. Rental income refers to the money paid by tenants to occupy your rental property. It is typically paid monthly and can be a reliable source of income for property owners. In South Africa, the rental market is quite strong, with a high demand for rental properties in many areas. This makes rental income a viable option for property investors looking to generate passive income. To maximize your rental income, it is important to set competitive rental rates that are in line with the market value of similar properties in your area. Doing so will help you attract potential tenants and minimize vacancy rates. It is also important to maintain your rental property to a high standard to ensure that tenants are happy and willing to pay the rental amount.
Appreciation in Property Value
Another way of making money with rental properties in South Africa is through appreciation in property value. Property values in South Africa have shown a steady increase over time, making it a viable investment option. The value of properties can increase due to various factors such as economic growth, infrastructure development, and an increase in demand. When the property value increases, the owner can sell the property at a higher price, resulting in a profit. Additionally, if the owner decides to keep the property, the increase in property value can result in higher rental rates and increased cash flow. A well maintained property in a desirable location can increase in value over time. By investing in rental properties for long term growth and taking advantage of appreciation in property value, investors can build significant wealth over time.
Cash Flow Positive Properties (Properties That Pay For Themselves)
Cash flow positive refers to a situation where the rental income generated from the property exceeds the total expenses associated with the property. In other words, it means that the property is generating more rental income than the combined costs of mortgage bond payments, property management fees, rates, levies, insurance premiums, maintenance and repairs, vacancies, and other related expenses. When a rental property is cash flow positive, it means that the owner is making a profit from the property after accounting for all the expenses. This is a desirable scenario for property owners, as it allows them to generate income from their investment property and potentially build wealth through property appreciation and rental income. Owning a positive cash flow property means the property is essentially paying for itself, your only contribution is the deposit payment, which is usually 10% of the property value, plus bond registration and transfer costs. So you should aim to get cash flow positive properties when you are looking for rental properties to purchase in South Africa – however this depends on your investment strategy as you may opt for properties which are likely to appreciate in value. Our rental property business plan includes a cash flow calculator that automatically calculates whether a property in cash flow positive or not.
However rental properties are still worthwhile to invest in, even if they are not cash flow positive. This is due to the opportunity to own a property at a cheaper cost as rental income will partially cover your mortgage bond repayments. Also you can benefit from the appreciation in the property value overtime, even though your property is not cash flow positive. When the property value increases, you can sell the property at a higher price, resulting in a profit.
PRE-WRITTEN RENTAL PROPERTY BUSINESS PLAN (PDF, WORD AND EXCEL): COMPREHENSIVE VERSION, SHORT FUNDING/BANK LOAN VERSION AND AUTOMATED FINANCIAL STATEMENTS
For an in-depth analysis of the rental property investment business in South Africa, purchase our rental property business plan. We decided to introduce the business plans after noting that many South Africans were venturing into the buy to let property business without a full understanding of the industry, market, how to run the business, the risks involved, profitability of the business and the costs involved, leading to a high failure rate of their businesses.
Our business plan will make it easier for you to launch and run a rental property business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the rental property business plan will lay out all the costs involved in setting up and running the buy to let property business. The business plan is designed specifically for the South African market.
USES OF THE RENTAL PROPERTY INVESTMENT BUSINESS PLAN (PDF, WORD AND EXCEL)
The rental property investment business plan can be used for many purposes including:
- Raising capital from investors/friends/relatives
- Applying for a bank loan
- Start-up guide to launch your rental property investment business
- As a rental property project proposal
- Assessing profitability of the rental property business
- Finding a business partner
- Assessing the initial start-up costs so that you know how much to save
- Manual for current business owners to help in business and strategy formulation
CONTENTS OF THE RENTAL PROPERTY BUSINESS PLAN (PDF, WORD AND EXCEL)
The business plan includes, but not limited to:
- Market Analysis
- Industry Analysis
- 5 Year Automated Financial Statements [ Income statements, cash flow statements, balance sheets, monthly cash flow projections (3 years monthly cash flow projections, the remaining two years annually), cash flow positive calculator, gross rental yield analysis, return on investment analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortisation]
- Marketing Strategy
- Risk Analysis
- SWOT & PEST Analysis
- Operational Requirements
- Operational Strategy
- Costs associated with purchasing and owning rental properties in South Africa
- Why some South Africans in the rental property business fail, so that you can avoid their mistakes
- Ways to raise capital to start your rental property business in South Africa
The Rental Property Business Plan package consist of 4 files
- Rental Property Business Plan – PDF file (Comprehensive – 116 pages)
- Rental Property Business Plan – Editable Word File (Comprehensive – 116 pages)
- Rental Property Business Plan Funding Version – Editable Word File (Short version for applying for a loan – 49 pages)
- Rental Property Business Plan Automated Financial Statements – (Editable Excel file)
Thank you BizBolts for the business plan. I received the business plan immediately after payment, it was money well spent ! I was able to easily edit the business plan. After using the BizBolts business plan, I can wholeheartedly recommend their products and skills.
It is with excitement and pleasure to inform you that I have been successful in securing a loan from my bank. This would not have been possible if not for the BizBolts Business Plan. Thank you for your help, my dreams are now coming true.
The BizBolts poultry business plan led us down the path from start to finish. Contact details of suppliers of key requirements were included in the business plan. It helped us crystallize our strategy, and the business plan was well received by the bank.
The business plan was very helpful, you did a great job of taking ideas and putting them into words as well as pointing out other aspects of the business plan I wouldn’t have thought of. I got funding using your business plan and it’s now 4 months since I started my poultry business, and everything is going well.
The business plan has a highly professional look and feel. The research really helps me look deep into the market that I am targeting, it’s well suited for the South African market. The business plan clearly outlined everything I need to start the business and the costs. It’s now easier to budget and plan. Thank you very much.
I am extremely pleased with the business plan and financial statements. The business plan is very detailed & it meets my requirements. I feel better equipped with tools that can help me secure funding. I would have no hesitation of recommending your business plans to other people.
Many thanks to the BizBolts team for putting together a fantastic business plan, I could not have done this business plan on my own. I managed to get funding from investors to start my butchery business using your business plan.
GET THE PROPERTY RENTAL BUSINESS PLAN (PDF, WORD AND EXCEL) - R500 Only.
We decided to make the business plan affordable to anyone who would want to start the business, and the price for the pre-written business plan is only 500 Rand.
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The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.
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About The Author
BizBolts (Pty) Ltd is a business research company based in Johannesburg, South Africa. We sell prewritten business plans for various industries including livestock production, crop farming and retail businesses. BizBolts also publishes articles on business ideas, business news, business tips, personal finance, and entrepreneur profiles.
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PROPERTY DEVELOPMENT: A BUSINESS PROCESS MODEL
Main article content.
Property Development, Business process, Built Environment, Real Estate
Property development constitutes one of the largest business enterprises and gross domestic product contributors of the world. The business of property development however incurred substantial losses over the centuries as a result of non-compliance to good governance in terms of considering all factors influencing perceived success of property development projects. The primary objective of this study was to develop a business process model for perceived success of property development projects, enterprises and role players. This model should guide role players, enterprises and actors within the property development business towards pro-active, effective and relevant decision making in achieving success in property development. To address the primary objective, a number of secondary objectives were raised whereby a conceptual model constituting identified variables was developed based on a comprehensive survey of the related literature. Appropriate hypotheses were formulated constructing a path diagram between the dependant variable and subsequent anteceding and intervening variables. Data was gathered using an electronic survey measuring primary data sourced from the identified international population of property development practitioners. This data was empirically analysed by means of structural equation modelling. The factors were namely financial risk forecast, consumer confidence and ability, procurement, urban planning, financial feasibility and practical viability considerations and professional feasibility and viability reporting, identified in the business process model affecting success of property development projects. This research broke new ground relative to the profession of property development in introducing the business process model for perceived success of property development.
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