Hey BP folks!
I have project I want to develop in my home country of Botswana, Africa. I’m an Architect based in Johannesburg.
I will convert units from meters to feet. And currency from Rands to USD. You might just realize how relatively “cheap” things are here.
The Property I have is a 12917 sq ft (1200 sqm) 99x142 ft (30x40m) undeveloped land in a medium prime residential area. Our government has a system of giving citizens land through a system of applications.
My mother applied for land in the 1980’s and would like to give it to me. In order for me to transfer the lease to my name I have to build a 300 sq ft structure on the property so that she is not transferring undeveloped land to me (a policy to make sure people live and build on the land and not just sell after receiving it). I would also like to build a perimeter wall at the same time.
Those structures will have to be built out of pocket as I can not get finance for a title deed that is not in my name. Then later get financing for a multi family development I would like to place on it.
Okay. Now that we have the long intro out of the way. Here’s my question:
•I have designed a 6 unit, 1 bedroom, single storey development.
• I am considering going double storey however I fear that I will lose the comfort and “family friendly” environment single storey allows.
• will the intangible value of a single storey comfortable environment surpass the rent of 3-4 more units?
• rough estimates say the single storey development could cost around $132 650.00. I could get financing from a local business development bank at 7,5% interest. So the loan will total $142 557.23. Meaning a minimum $792 installment.
•I will rent out the units at $285 pm (lol yes African prices) so $ 1710 monthly rent. Leaving $ 918 after paying installment.
I’ve attached an image of the plan I have designed so far. It could be blurry.
Should I go single or double storey?
What other advice could you give with the information I’ve provided?
Looking forward to your responses!
I can’t seem to post a picture of the design from the BP app
Hi @Ungwang Boiteto I think the 1 story vs. 2 story really depends on your market. If there are hardly any 2 story buildings then that may tell you something. Are there a lot of multifamily buildings in that area? If not then you may have a hard time avoiding vacancy. Would you do 2 level townhouses/row houses or flats with one family living above the other. With either you should look into good sound isolation
Your revenue after debt service doesn't factor in maintenance, capital expenses, vacancy, possible construction cost overruns or delays. I would do some research on what those are in your market.