Some of the most successful property deals that she has played a part in, says Tanya Jovanovski, franchisee for Rawson Auctions in the Western Cape, have been those in which a former residential building has been reconfigured to serve as commercial space. In the process, she says, such buildings quite often gain a great deal of value.
With a huge daily drive-by traffic count, Vasco Boulevard in Goodwood, Cape Town, says Jovanovski, is one precinct that has demonstrated how profitable residential building conversions can be: today 80% of the former homes on the boulevard are now used as offices or for other commercial purposes.
On the 20th of February, Rawson Auctions will be auctioning number 99 Vasco Boulevard– a property that is currently zoned for residential use but offers great commercial potential if rezoned accordingly . At the moment, this single storey house has a front section with three bedrooms, one bathroom, a lounge, a kitchen, as well as a granny flat with three bedrooms, a lounge and kitchen. With six bedrooms, all individually let, it produces a total monthly income of R10, 000.
However, planning permission has already been granted for a second storey to be built and the current owner did begin work on this extension – but is unable to complete the project at this time. A second storey would double the number of rental rooms in the complex to 12 and enable the owners to collect a monthly rent of up to R20, 000.
The existing home, says Jovanovski, is in good condition - and with an efficient contractor the upgrade/extension could be completed in 10 to 12 weeks. Even without a second storey, she said, the home is an excellent economic proposition due to the steadily increasing commercial activity in Vasco Boulevard.
The building is on a 496 m2 plot and it operates on a prepaid electricity system. The current tenants are all on one month leases and no long term leases have been signed in view of the fact that the upgrade might go ahead soon. The auction will be held at Rawson Auctions’ office in 126 Main Road, Diep River at 12 noon. The reserve price is set at R 1, 4 million.
Rawson Auctions do not charge the traditional bidder’s registration fee but they expect a 5% deposit and a 10% commission to be paid on the fall of the hammer.
