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BRIEF: Our second French clients approached us mid 2007 to find a guest-house or a house that could be converted, in a semi rural part of Cape Town. The property was to have character and ideally 6 guest rooms. Major renovation was not an option but these clients were prepared to update a property cosmetically. These clients were planning to move to SA for a complete lifestyle change in 2008. (Having French capabilities within the company naturally made the experience an easier one.)
AREA: Noordhoek, Hout Bay, Atlantic Seaboard (this was ultimately ruled out due to the lack of land and views for the budget) and the False Bay coastline.
BUDGET: Euro 500,000 (equating to approximately 5 million rands), but they were prepared to go up to 6.5 million for the right property.
OPTIONS PROPOSED: The short-list consisted of a number of properties (both existing guest houses and large family homes) in Sea Point, Noordhoek and Hout Bay
This search was quite expansive from the beginning simply because there was only a finite amount of stock available which would be suitable, but the geographical area was quite wide-spread.
Due to a similar search in previous months, Space had very current knowledge of the market place and what property had been on the market for some time. It was quite clear that an existing B&B in Noordhoek was over-priced and needed a lot of renovation. It was also evident that, despite a superb view, a house in Noordhoek was about 1.5 million rands overpriced when compared to other similar properties in the area.
Our clients quickly realised that to get some sort of view and feeling of space, Sea Point was not going to be their choice. The three options we viewed there were extremely well presented but felt very compact and would not offer them the life-style they wanted.
Noordhoek, whilst initially their favourite area, did not offer the sort of value or location advantages of it’s neighbour Hout Bay, which, in spite of an incredible number of existing guest houses, offers a strong season, continues to be a firm favourite for tourists and would give them the sort of lifestyle and property they were looking for.
Buying a property to turn into a B&B or buying a guest house involves a lot more knowledge of the legalities than simply buying a home. A big consideration is whether to buy the property through a company or not which will impact the business permit application. Should the property already be a B&B or does this have no bearing on the council application? Space advised on all of these crucial elements.
The chosen property is a Cape Dutch style thatched home of about 15 years old, which has been running as a guest house for the last 12 years. It has seven bedrooms and six bathrooms, a stunning, well maintained, manicured garden, within two minutes walk of local facilities.
This property was keenly priced but included the mandatory sale of the business. An asset which would not ultimately be required by our clients and which Space believed had no monetary value in view of the clients plans. Through negotiations, we were able to broker an agreement not to buy the business, saving 8% on the total asking price of 5 million Rand.
Space have overseen all aspects of this purchase, including finding the shortlist, negotiating the saving of 8% and legal and financial aspects of the purchase including council application to run this property as a Guest House.
Another satisfied Space client who bought a superb property at an excellent price, almost 2 million rand below the upper limit of their budget.
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