property business plan in south africa

How to Start a Property Business in South Africa

By: Author Tony Martins Ajaero

The demand for businesses in the general real estate industry in South Africa is growing massively due to the hiking prices of properties in the country. Reports show that 60% of all construction is centered within the Gauteng region, and this number will continue to rise in the next few years.

Real estate is without doubt one of the most exciting and lucrative businesses to be involved in, and South Africa is a fertile ground to invest your money. A lot of investors buy properties and bank them, and then sell the properties off once they have either served their purpose or have gained value.

Property business is not a simple business and not for the faint of heart, but the adrenaline rush when a major deal comes together would truly be worth it. In this age, property buying or selling is huge, and those that are good value for money can really bring substantial profits.

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A lot of property business owners and investors buy run down shopping centers, commercial buildings and warehouses for the sole purpose of fixing them up and selling them off at a profit. These are some of the most sought-after real estate investments. Statistics has also shown that residential property is also big business if you are looking to start your own property business.

There are a handful of areas where you can buy houses in poor conditions but at excellent price, renovate them and then rent them out to tenants. This particular niche is lucrative, but can sometimes prove to be tricky if you are unfortunate to get poor tenants, but on the other hand, if the tenants are reliable and good payers, this can be a wonderful way to earn extra income.

When planning to start this business, you should first put an excellent business plan together. Buying properties at this point in time is a clever move if you have spare money to invest or if you want to get into the real estate business. A lot of property owners are willing sellers as the recession has taken its toll over the past couple of years.

With the real estate market climbing slowly back into recovery mode, it provides you a large opportunity to make more money. Read on as you are pointed towards the right direction on starting a successful property business.

17 Steps to Starting a Property Business in South Africa

1. understand the industry.

South Africa’s property market has since the year 2000 remained resilient, even with challenging macroeconomic conditions. Growing demand for affordable housing and a host of “new city” projects kicked off in the past year have kept the residential market steady, while A-grade commercial space which is  on the verge of oversupply in some areas, is expected to experience strong growth.

Note that all segments of the real estate market have struggled with rising electricity prices, the country’s burgeoning e-commerce, transport and logistics segments.

Reports have it that the rising interest in real estate investment trusts (REITs), a robust retail segment, steady population growth and plans for billions in new infrastructure outlay have brought about a positive mid- to long-term forecast, although the sector will need to face near-term challenges, as slow headline growth, rising inflation, labour unrest, and an expected interest rate hike continue to affect consumer confidence and spending.

Reports have it that South Africa’s residential stock stood at 6.07m properties worth a total of R4.27trn ($368.93bn) in the Q4 of 2014 and in Q2 2015 Housing Review, 2.11m properties worth R2.25trn ($194.4bn) were bonded and 3.96m houses worth R2.02trn ($174.53bn) were non-condensing.

We also believe that the average nominal price of a middle segment home, offering between 80 and 400 sq. metres of space, and priced at less than R4.2m ($362,880), stood at roughly R1.32m ($112,320) during Q1 2015, and went up to 7.3% year-on-year, but then real price inflation in middle-segment housing stood at 3% in the same period, compared to a headline rate of 4.2%.

The report notes that its sample size for luxury properties is smaller than other segments, home prices in this category rose by a nominal 10.6% year-on-year (y-o-y) during Q1 2015 to average R5.77m ($498,528). Residential building activity was subdued in late 2014, however, and contracted further in early 2015, with approved building plans falling by 6.1% y-o-y to 8444 units in January and February 2015.

Reports have also shown that the residential segment is likely to face a number of serious challenges, more especially against rising inflation, falling consumer confidence, labour unrest, electricity shortages and a period of currency depreciation which saw the rand lose 7% of its value against the US dollar between January and July 2015.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

In this business, your target market will cut across people of different classes and this is why we advise you develop a business concept that will allow you work with highly placed people and at the same lowly placed people who are only interested in putting a roof under their head at an affordable price. You’re target market will include;

• Foreign investors who are interested in owning properties in South Africa
• The government of South Africa (Government contracts)
• Managers of public facilities
• Families who are interested in acquiring a home
• Corporate organizations who are interested in acquiring their own property / properties
• Home Owners who are interested in selling off their home
• Properties Owners who are interested in selling off their properties

3. Decide Which Niche to Concentrate On

You need to understand that the property industry has different types of investment niches. Some of them might appeal to one type of person; some might appeal to another type of person. But you should know that each investment niche uses most of the same basic principles and fundamentals.

Here you simply buy or purchase property to rent it out to prospective clients with a view of generating rental income from the property.

• Renovate to Sell

Renovate as we know means to buy a decommissioned building or a dilapidated house in order to fix it (flip it), and then sell it off for a profit.

• Repossessed Property

If the owner of a property fails to make bond payments on the property, the issuer of the bond, usually a financial institution will then seize it. The sheriff of the High Court will then sell the property off at a sale price in order to recover losses from defaulting on the bond payment

• Letting Agency

This agency facilitates an agreement to rent out property to tenants on behalf of the property owner. The letting agency, in turn takes administration fee.

Level of Competition in the Business

The South African property sector is valued at R5.8 trillion. The report reveals the property sector’s size is at R5.3 trillion with a further R520 billion land officially zoned for commercial and residential development.

Commercial Property carries a value of around R1.3 trillion, up from some R780 billion, with almost R790 billion held by corporates, R300 billion held by REITs, R130 billion by unlisted funds, and R50 billion by life and pension funds. Note that the retail property has the highest value at R534 billion followed by office properties at R357 billion (R228 billion) and industrial properties at R281 billion (R187 billion).

Hotels and other property accounted for R94 billion in value (R25 billion). We also believe that that formal residential property still accounts for nearly three-quarters of property owned in South Africa, and grew from an estimated R3.0 trillion at the end of 2010 to R3.9 trillion.

Note that underdeveloped urban land zoned for development remained unchanged around R520 billion (1.1% of total land in SA). But then the public sector contributed a total of R237 billion, of which around R102 billion is estimated to be in the hands of the Department of Public Works, R66 billion held by SA’s 19 largest state-owned enterprises, and R69 billion owned by metros and selected local municipalities.

The research is part of a larger project by the council, which provides a point of departure against which various transformation charter imperatives can be assessed.

Experts estimate the property sector’s contribution to GDP at a significant R191.4 billion in 2012 in terms of annual income and expenditure flows generated by the sector and a R46.5 billion contribution. By the end of 2015, the naysayers and the sorry folks who have avoided listed property investing in the past said the sector would struggle in 2016.

Even though it didn’t exactly shine, it beat other equities and remained a tenacious sector. Statistics has it that from January to December 13, equities achieved a return of 3% and were completely battered by property which managed 8.4%. Cash only mustered 7% but bonds reigned supreme with a 14.8% total return. The property sector was hurt by political uncertainty and slow economic growth. The economy has barely grown this year.

Indeed the industrial sector continues to be resilient with landlords achieving above-inflation rental growth and tenant retention on warehouse and logistics properties while the office sector is the laggard with rising vacancies on properties and the oversupply of rental space.

Industry remains the top-performing property sector in South Africa, with a total return of 13.6% delivered in 2016. At a sector level, industrial property was the top performing sector last year with a total return of 13.6%, outperforming retail at 12.6%. The office sector continues to struggle on the back of subdued capital growth and was particularly hard hit in 2016 with a total return of 7.6%.

At a property segment level, Inner City and decentralized offices counted among the worst performing segments for the year with total returns of 7.5% and 7.7% respectively. The top performing segments for the year were High Tech industrial property and Neighbourhood shopping centres which produced total returns of 18.1% and 20.3% respectively. Neighbourhood Centre returns should be seen in a longer term context, which suggests a return to trend growth in 2018 rather than continued outperformance.

4. Know Your Major Competitors in the Industry

Industry experts have speculated that 2016 was the worst performing year for residential property since at least 2012. It is believed that the socio-political landscape and economic climate have also done little to alleviate the pressure.

South Africans are looking for safe investments, and property remains one of the safest ways to grow money. Even though there has been a general slowdown in the property market over the last financial year, a lot of property businesses have managed to stay lucrative.

Property businesses no longer simply depend on traditional selling methods such as hanging ‘for sale’ boards outside houses or advertising in the newspaper. They have had to find more innovative ways to attract new clients. Below are seven property businesses that overcame the economic challenges and managed to not only sell the most property, but also made it artful.

• Pam Golding
• Just Property
• Chas Everitt
• Jawitz Properties

Economic Analysis

Experts strongly believe that population growth will ensure the residential sector is resilient. It is believed that South Africa’s population will rise to 72.9m by 2050, while 62% of its 53m residents will live in urban areas, with urbanization growing by 1.21% annually. This is why with urbanization and population growth rising, affordable housing and new city developments stand as the most high-potential growth drivers within the residential segment.

Reports have it that the price of affordable housing which includes homes of 40-79 sq. metres, priced up to R575,000 ($49,680) grew by 8.3% during Q1 2015 to hit R390,000 ($33,696), equivalent to real price inflation of 4%, compared to 1.9% during Q4 2014.

Note that new master-planned projects are sustaining their popularity among middle and upper income segments, providing self-sustaining, greenfield, mixed-use developments with heightened security and amenities. We believe that these developments have been a prominent feature of South Africa’s real estate market for years, and more projects are in the pipeline.

Although local banks have been increasingly involved in property lending, the size and scope of new cities entails much higher levels of financing. AIH’s finance agreement with Nedbank Corporate Property Group for the Waterfall Business Estate project was the largest of such deal ever concluded by the bank.

With billions in fresh investment and sustained construction efforts needed to deliver new projects, some stakeholders have questioned developers’ ability to maintain momentum and fully deliver all planned features and amenities.

Note that new cities will need significant investment in infrastructure before moving forward. Reports have it that one of the most significant risks to economic growth is the country’s ongoing energy challenges, which began in 2008 and became increasingly problematic over the subsequent 18 months. New city developers, meanwhile, have moved to build their own infrastructure, despite these adding significant costs to the projects’ total price tags.

5. Decide Whether to Buy a Franchise or Start from Scratch

It might seem like the ideal path to start small and grow bigger in the real estate industry, but this may not always be the best option for a property business. We believe that single unit properties and small single family homes are the most attractive to newbie investors, as they usually cost less to buy and renovate.

But the profit from these properties is often swallowed up by the renovation budget, and maintenance on the properties. The more reason buying a franchise is a better option in this business, and you can also partner with a wealthier individual or get more financing in order to purchase a more profitable property.

Note that we are not suggesting you over-extend yourself, but you should know that properties requiring small initial investments often offer small profit potential. It’s advisable that you research very extensively before you dive into a franchise.

6. Know the Possible Threats and Challenges You Will Face

The property business is an intense business where almost everyone works to do their own deals. All these and more makes the industry very interesting and competitive. There are many intelligent entrepreneurs out there who are very ready to do their own deals, however starting your own property business is incredibly challenging. Possible threats you should have at the back of your mind may include:

• Low barrier to entry
• Industrial unrest
• High fatalities due to lack of health and safety compliance
• Tender risks
• Non-payment risks
• Compliance with laws and regulations.
• In the industry Investors have unlimited investment choices
• Unlikely to experience a near-term capital event
• Hard to be patient even though that may be the best course of action

7. Choose the Most Suitable Legal Entity

The first thing you need to consider when starting your own property business is the type of ownership to go with. In South Africa, a good option is to open a close corporation (CC). This we believe will make things easier to manage. In a CC, the owners of the company are referred to as members, and you need a minimum of one member and there’s a limit of ten members.

A CC is a legal entity in South Africa, which means the CC is responsible for paying taxes and not one individual. You then need to register your CC by completing a CK1 form (Close Corporation Founding Statement). You can complete this online or download a form to complete.

We suggest you have an accountant sorted out. You’ll need to include the details of your accountant and an original signed letter from him or her agreeing to act for your CC. You’ll also have to provide the letter you receive confirming the registration of your company name. This process takes about five days to complete and costs R100. Once your property business is registered, don’t forget to register with SARS.

8. Choose a Catchy Business Name

• Universal housing
• Wealth contractors
• Target reality
• Sheraton Ltd
• Dream Home Real Estate Service
• Castle Realty
• Apartment Grey
• Four Leaf Clover
• Exquisite housing
• Bumpy Housing services
• Destiny Realty Solutions
• Future estates
• Affinity Investment Group
• Winter suits
• Housing giants
• Integra estates
• Numeric estate services
• Liberty world
• Tower Magnet
• Pitch mantra

9. Discuss with an Agent to Know the Best Insurance Policies for You

You need to understand that the importance of insurance in all phase of our lives cannot be ignored. Even Long-term property investors will want to have iron-clad insurance policies in place that include stipulations about what’s covered by the insurance and what is the responsibility of the renter. Have it in mind that you cannot lock yourself down into a long-term contract if you’re going to offload the property very soon. Note that every type of insurance has its own exclusions.

• General business liability insurance
• Investment property insurance
• Real estate finance insurance
• Loss of rental money insurance
• Equipment breakdown
• Umbrella insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

Indeed no time or moment is too early to begin thinking of intellectual property protection. Have it in mind that keeping a vigilant eye on these assets is an important part of the success of your business. New entrants into the business world tend to face the issue of intellectual property protection while some entrepreneurs will mistakenly believe that a company name is synonymous with a trademark.

You need to understand that trade name is the legal name of a business entity, which appears on the articles of incorporation or bylaws. Also note that a clear search is not a guarantee that the desired name is available.

You also need to know how important it is to have a strong Internet presence to promote one’s business. It is advisable that you consider acquiring domain names with alternative extensions (.com, .NET, .biz, .us, etc.) as a defensive measure to prevent others from doing so.

Also depending on the budget, you should register hyphenated versions of the domain name, common typos or even “(insert business name).” It is called waste of energy when you have to invest time and resources developing your intellectual property and then fail to protect it. It’s important that you seek the help of an attorney who is versed in this field to help you out.

11. Get the Necessary Professional Certification

• IREM Certified Property Manager certification
• Certified Leasing Specialist
• Certified Development Design and Construction Professional
• Certified Retail Property Executive

12. Get the Necessary Legal Documents You Need to Operate

Starting a business in South Africa takes several steps, and it can take several weeks to get it formalized. Most requirements can be completed online, and they do take some time to process. Ensure you have enough time to go through all of the stages such as providing certified copies of the documents required to complete the registration with the CIPC.

Note there is a nominal minimum capital amount of ZAR 1 needed to open a business, but other fees for registration will also apply. You must provide certified copies of some documents which are used to prove the ID of directors, and expect to pay some legal fees too.

• Visit the Companies and Intellectual Properties Registration Office (CIPRO) website and register as a user.
• Register your company name. You’ll need to either download a CK7 (Application for Reservation of Name, or Translated Form, or Shortened Form) or complete it online. CIPRO will conduct checks to ensure the company name isn’t already in use. This process takes about seven days to complete once CIPRO receives the application and it costs R50.

13. Raise the Needed Startup Capital

Indeed the property business is a hub of wealth where large finance brings back large profits. Funding especially startup capital can be very hard to come by but what differentiates your business from others will be your ability to scale through hurdles like this. Note that there are various institution that provide funding to aspiring entrepreneurs in South Africa:

The NEF Imbewu Entrepreneurship Finance, which provides risk capital to new businesses in the property development space. Financial institutions also provide funding throughout the life span of a project, but then you have to provide a financing structure to potential financiers to give a clear and detailed picture of what you are proposing, and also provide reasons why they should take the risk of funding your business. When looking to finance your property business, you should look at the following attributes to boost your chances:

• You should have a sizable down payment
• Ask for owners financing
• Think outside the box
• You should be a strong borrower
• Always shy away from big banks

14. Choose a Suitable Location for your Business

One of the best things that can happen to you in this business is to buy properties where conditions are favourable for renting/selling/lease. It is advisable that you focus on buying properties in areas where rental demand is growing faster than supply. It’s also advisable that you look at the demographics of the neighbourhood.

It is well known that the 25-34 age groups will increase by 1.1 million over the next three years. Also since the home-ownership rate among young adults has recently increased from 35.3% to 39.2% just within two years, places with high concentrations of this age group are favourable places to own  properties.

You should also note that zoning regulations is very crucial in this business. In addition to zoning regulations, development is also controlled by conditions of title. These conditions are set out in the Title Deed of each property, and can restrict the way in which a property may be developed.

Note that any development of land that ignores this legislation can result in prosecution. Have it in mind that zoning regulations as well as the property description, and the size, orientation and other details can be obtained from the local municipally office and this department can also provide information regarding the National Building Regulations.

There are other costs to worry about as well. These include preparing the application, i.e. professional fees, the application fee charged by the council and the cost of drawing up plans.

Depending on the type of application, obtaining a decision may take as long as 12 months. After the application is submitted it is circulated to relevant Council departments and agencies for comment. Don’t also forget to find out who owns the land.

Every property in South Africa has to be registered with the Deeds Registries Office in South Africa. Note that the deed constitutes proof of who owns the property. The deeds office keeps a record of all property transactions. If a title deed is destroyed or lost, application can be made to the deeds office for a duplicate original of the deed.

15. Hire Employees for your Technical and Manpower Needs

It will indeed be tempting to reduce the number of processes or workforce so that you can be able to keep the lion’s share of the profits for yourself. We strongly advice you fall not into that temptation. No matter how much market research you do, you will not automatically become an expert the first time or two you purchase a property.

Also you have to know that realtors understand the market within a given geographic area better than you ever would, which is why you have to stage your vision towards finding the worst houses in the best neighbourhoods and pimp them up to reap the biggest rewards.

Also you will need to develop yourself as a business owner. You will need to equip yourself with the skills and knowledge needed to lead and manage this business in order to make it both sustainable and profitable. Note that this will need a substantial investment of time, effort and money from you. The more you commit to this journey of personal and professional development, the better your chances of success.

The Service Delivery Process of the Business

When trying or planning to invest in stocks and shares, a good financial advisor worth his salt would advise you to diversify your investment so that the risk is spread. This same theory or fact would be true for property investments. We strongly advice that you spread your property portfolio across different areas to minimize your risk.

You also need to have it in mind that there is little point in trying to spot a property bargain hundreds of kilometers away. You’re not an expert on the area and are not likely to be able to judge whether the location, price etc. are good or not. A bargain will be much easier to spot in your own backyard. It will also be much easier to keep an eye on your tenants if you live nearby.  There are several steps for you to follow in this business.

• Do your real estate research
• Pay the Lowest Down Payment Possible
• Move in and get busy
• Take Action To Maximize Your Investment
• Repeat the process
• Move Up To Larger Properties

16. Write a Marketing Plan Packed with ideas & Strategies

• marketing strategies for the Business

The world has been screaming marketing and the importance of business promotion. Marketing your business is very necessary to help attract customers and create a brand image and reputation. In a competitive environment, there are always several companies competing for the same business opportunities, which is why it is important to tell your potential clients why your service is better than that of your competitors.

• Digital marketing

Never you underestimate the power of the internet for marketing. Clients in this industry are often attracted to businesses that have a website, making them appear more trustworthy than businesses which haven’t set up an online presence. Note that the internet is much cheaper as a marketing strategy than traditional forms of marketing, like print and radio.

Social media is also a strong driver for word-of-mouth marketing. Your website should have a contact form for clients to contact you for quotes. You should also include your credentials and a photo gallery of your work, a list of your building services and testimonials from satisfied clients.

• Educational-based selling

We believe that customers look for information that will benefit them, which is why education-based selling can be quite effective. Instead of focusing on features and benefits, rather educate your customer about your specialized service and give them the information they need to be able to make better-informed decisions.

• Word of mouth

A lot of entrepreneurs may think word-of-mouth marketing is out of their hands, but nothing could be further from the truth. The property industry is well known for unreliable realtors and agents who promise the earth to secure a job and then disappoint through sub-par workmanship, missed deadlines and extra cost.

We believe that this issue presents a powerful opportunity to create a competitive advantage. By giving clients a professional and reliable service and high quality outcomes, you’ll be able to set yourself apart and leverage word-of-mouth marketing.

• Testimonials

Note that your reputation and track record in this business is the most important tool you have to get more business. This is why you have to do all you can to make sure your client’s experiences are positive and impressive. Gather testimonials from previous clients and create contactable references to verify your workmanship. Use these stories on your website, in your promotional material and include stories and references with the quotes you send out.

We strongly advice that you join associations and forums to build up a referral system. Note that by networking you can make your business more visible and attract further business. Create a solid contact list and develop relationships as you network. The aim is to build a relationship that will make sure your business name is thought of first when there is a need for services that you offer.

17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Brand awareness and corporate identity in this business simply means that your local home buyers and sellers know who you are. It shows that you are on top of their mind anytime anything property crosses their mind. You need to understand that people start their property search online, which is why building your brand awareness with digital advertising is the best bang for your property business.

Have it in mind that a lot of businesses have to spend serious time, money and effort creating a brand that speaks their language. Note that as a property business, you have a particular advantage with brand awareness. Here are five secret weapons you already have to help you build brand awareness for your business:

• Mould yourself into an expert
• Know where your customers are
• You are the face of your brand
• You need to be a unique storyteller
• Your business is a service

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Need a Property   Business Plan for your  Property Business ? We write Professional  Property  Business Plans.

Our  Property  Business Plan is for Start-Ups looking to apply for basic Funding , Tenders and Industry Regulators .

Our Property  Business Plan is focused on the  Property  and Real Estate  Industry in South Africa. Included in this option is a Professional Business Plan layout and a 5-Year Financial Projection.

Business Plan Pro® Accreditations

Business Plan Pro® is a Subsidiary Brand of My SME™, and an IMCSA Accredited Business Coaching institute (My SME™ Accreditation Number: 073PIMC ).

We focus on Business Plan and Feasibility Study services to assist Businesses to grow through Funding . Business Plan Pro® is the first South African Business to create Custom Business Plan Software for South Africans.

Our Property Business Plan is focused on the Real Estate and Property Industry in South Africa. Included in this option is a Professional Business Plan layout and a 5-Year Financial Projection.

(7 Working Days)

Our  Property Business Plan  is focused on the  Real Estate  and  Property  Industry in South Africa. Included in this option is a Professional Business Plan layout and a 5-Year Financial Projection.

Service Includes: 

• 40 – 60 Pages.
• Professional Business Plan Layout.
• 5-Year Financial Projection.
• Basic Real Estate and Property Market Research.
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NOTE that  with the Property Business Plan the market and industry research is very basic . If you need in-depth market & industry research from the Business Plan Pro® team, please select either the  Comprehensive Business Plan  or  Specialised Business Plan .

Start-Up Business Package

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Our Start-Up Business Package is for Start-Up’s looking to start their Business on the right foot with a  Property Business Plan and a Professional Brand .

Package Includes: 

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NOTE  that with this package you complete a  brand questionnaire  that tells us all we need to know about your business to create a professional logo. The logo concepts presented are  standard options  that you are required to choose from. No custom amendments are allowed, but  one basic amendment  is allowed.

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How to Start a Real Estate Business in South Africa

Updated on 5 July 2024

Starting a real estate business in South Africa is an excellent idea for ambitious entrepreneurs. It’s one of the best ways to get into the property industry, and real estate businesses offer a lot of room for making money.

South Africa is a buyers’ market, and there are always opportunities for new real estate businesses. However, it’s also a competitive market, so you need to take the right steps to strategically set up your business.

In this guide, we cover the main steps and processes you need to follow to start a real estate business.

Qualify as a Real Estate Agent

Before you can start a real estate business in South Africa, you’ll need to qualify as a real estate agency principal. This is essential if you plan on selling property under your own company .

Here are the three main steps you’ll take to do this.

Complete Your Internship

All new estate agents need to obtain their Fidelity Fund Certificate (FFC), which can be obtained through 12 months of work experience with an existing real estate agency.

The main purpose of this internship is to build up a portfolio of evidence (PoE) which you will submit to the EAAB.

Not only is this a necessary step in qualifying as a real estate agent, but it also helps you to gain valuable industry experience and knowledge. This is essential if you want to start a successful real estate business .

Complete Your Studies

Once you receive your Fidelity Fund Certificate (FFC), you will need to complete the following within two years:

• National Qualification Forum Level 4 Real Estate (NQF4)
• EAAB Professional Designated Exam Level 4 (PDE4)

These qualifications let you work as a full-status real estate agent.

Qualify as an Estate Agency Principal

You need to be qualified as an estate agency principal if you want to run your own real estate business. To achieve this, you’ll need to gain at least two years of work experience in a management role, or running a real estate agency.

You will also need to complete your NQF 5 course, gain a certificate of competency from SSETA, and submit your PoE to the EAAB. Once you have qualified as a real estate agency principal, you can now start your own real estate business.

Create a Business Plan

As is the case with starting any kind of business, you’ll need to have a solid business plan in place before you get started. This should outline all the details of how you will establish and operate your business.

Importantly, this should cover:

• The area and market you plan to operate in
• The type of real estate business you plan to run

For example, you could specialise in a certain geographic location, focus on residential or commercial properties, specialise in leasing, focus on property development , and so on. Your business plan will also need to cover detailed market research, your financial plan , business goals, and any other relevant information that will help get your business up and running.

Register Your Company

When your business plan is ready, you’ll need to register your real estate company. You need to do this through the CIPC and gain your official registration documents. The type of company structure you choose should depend on how many people are involved in the business and how your business plans to operate.

Market Your Business and Develop Strategic Partnerships

Once you have established your real estate business, you’ll need to get clients. This is why having a good marketing plan is so important. Figure out how people will discover your business, how you will attract clients, and how your business will grow .

It’s also important for real estate businesses to develop the right strategic partnerships . This could include partnerships with law firms, property developers, and other types of property-related businesses. The right relationships and partnerships can play a big role in how much new business you generate.

Starting a real estate business can be done relatively easily. With the right commitment, anyone can become a registered estate agent. Compared to other business models, you can also start a real estate business with minimal upfront capital.

The opportunities are also enormous. As long as people are buying and selling property , there are great possibilities to make money. If you’re interested in working with property, then getting into real estate is one of the best ways to enter the industry.

SEE ALSO: HOW TO START A PROPERTY BUSINESS.

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15 Property Business Ideas You Can Start in South Africa

In South Africa, the real estate sector stands as a beacon of opportunity for entrepreneurs and investors alike.

In an economy ripe with potential, tapping into the right real estate business idea can be the key to unlocking sustainable success and growth.

Of course, these real estate business ideas don’t matter whether you’re a seasoned investor or a budding entrepreneur, South Africa’s real estate industry presents a plethora of avenues to explore.

With urban development on the rise and tourism continually flourishing, the demand for innovative real estate services has never been higher.

This article will venture into some of the most promising real estate business ideas in South Africa , offering insights into how you can stake your claim in this lucrative market.

From property management to niche holiday rentals, we will unravel the tapestry of opportunities that await South Africa’s dynamic real estate landscape.

Real Estate Business Ideas in South Africa

In South Africa , the real estate sector thrives on diverse business ideas including property management, real estate investment, online property listings, and legal consultancy. Opportunities also extend to property flipping, development, vacation rentals, and real estate market analysis driven by tourism and urban development.

1. Online Property Listing

Starting an online property listing service in South Africa positions you in the growing trend of digital marketplaces and can be a strategic move given the high percentage of property searches that begin online.

The demand for convenient, accessible property browsing aligns with the increasing internet penetration in the country.

This venture offers potential for scalability and a broad reach, allowing for a diverse portfolio of listings that cater to various market segments.

The success of such a platform hinges on effective digital marketing strategies, user-friendly design, and robust database management.

Commitment to real-time updates and comprehensive property details will enhance the platform’s reliability, drawing both buyers and sellers.

2. Real Estate Photography Business

With a vibrant property market, visuals play a pivotal role in sales and rentals.

Real estate photographers are key to creating a strong first impression for listings, enabling potential buyers to explore homes through images that highlight each property’s best features.

The business thrives on skilful photographers who can tell a property’s story, showing off the luxurious expanses of a high-end estate or the cosy charm of a suburban home.

This niche requires a keen eye for detail and the ability to showcase spaces in a way that beckons viewers.

3. Property Management

Property management in South Africa stands out as a promising enterprise within the real estate sector.

The role involves overseeing residential or commercial properties to ensure they are well-maintained, financially viable, and attractively positioned in the market.

Managers serve as the vital link between property owners and tenants, handling the day-to-day operations that include leasing, maintenance, and sometimes renovation work.

This service is critical for owners who may not have the time or expertise to manage properties themselves.

Demand for this service grows with the expansion of the property sector, offering plentiful opportunities for meticulous, service-oriented entrepreneurs.

4. Online Rental Business

The online rental business is gaining traction in South Africa’s property market.

This business idea flourishes on a platform where property listings meet tenant inquiries, merging convenience with choice.

The digital platform serves as a marketplace, showcasing diverse rental options from city apartments to countryside homes.

Entrepreneurs profit from commissions on successful leases, ensuring the service remains lucrative.

The model appeals to the modern tenant seeking to browse options from the comfort of their location.

5. Real Estate Agency

A real estate agency in South Africa operates within a dynamic property market, facilitating transactions between buyers and sellers.

These agencies manage a portfolio of properties, offering expertise in valuation, marketing, and negotiation, crucial for smooth transactions.

They capitalize on a deep understanding of local markets, legal requirements, and financial considerations unique to South Africa .

Agencies craft tailored experiences for clients, often using robust online platforms to list properties and attract prospective buyers.

The business relies on skilled agents proficient in matching clients with their ideal homes or investment opportunities.

6. Real Estate Appraisal Service

The property market thrives on accurate valuations, which are essential for transactions, insurance, and taxation purposes.

With a growing real estate sector, the demand for skilled appraisal services is likely to rise, presenting an opportunity for sustainable business.

Securing the requisite credentials and understanding local market dynamics are crucial for credibility and operational success.

Offering such a service can leverage economic growth and urban development trends prevalent in the country.

Your focus on this area could fill a market gap, ensuring that property values align with real-time market conditions, and aiding in investment decisions and property development.

7. Home Staging Service

Starting a Home Staging Service in South Africa taps into a niche segment poised for growth.

This service enhances real estate value, making properties more attractive to potential buyers.

A keen eye for design and market trends can set your venture apart, catering to a clientele that seeks to maximize property appeal and sales price.

In an ever-evolving property market, offering such a service aligns with the current need for competitive selling strategies.

It’s essential to harness a thorough understanding of customer preferences and real estate market nuances in various South African locales.

8. Real Estate Blogging

This country’s property market has unique dynamics and rich diversity, offering plenty of topics to cover – from city apartments to beachfront villas.

Your blog could be the go-to resource for insights on local market trends, investment tips, and property reviews, meeting a clear need for information among buyers, sellers, and investors.

You’ll need to stay current with market data, legal changes, and regional development news to offer valuable content.

Ensure the blog stands out with a mix of rich media, including videos, infographics, and interactive maps.

Consistent quality content will attract and retain a dedicated readership, driving traffic and potential monetization opportunities through advertising or affiliate marketing.

9. Landscaping Business

Starting a landscaping business in South Africa will expose your business in a growing demand for aesthetic, functional outdoor spaces in both residential and commercial properties.

Your timing aligns with a heightened appreciation for outdoor living, spurred on by lifestyle shifts.

You’ll cater to a market that values garden beauty as part of its living experience, possibly increasing property values and providing serene environments.

It’s essential to understand local flora, sustainable practices, and clients’ diverse needs for outdoor spaces.

You should also foster relationships with suppliers and build a portfolio showcasing your work’s creativity and range.

10. Construction Project Management

The nation’s expanding infrastructure and urban development present abundant opportunities.

Equip yourself with a thorough understanding of local construction laws, labour resources, material sourcing, and project financing.

Your expertise could steer projects towards efficiency and profitability, ensuring clients’ visions turn into tangible outcomes within budget and on schedule.

Begin with a solid network of trustworthy contractors and suppliers, and maintain rigorous oversight on quality and deadlines.

Keep abreast of sustainable building practices and innovations in construction technology, as these areas can offer competitive advantages.

11. Real Estate Investment Trusts (REITs)

Starting a Real Estate Investment Trust (REIT) in South Africa can be a lucrative venture, considering the country’s emerging market status and potential for economic growth.

It offers investors a way to access property assets without direct ownership, providing income through dividends and the possibility of capital appreciation.

Ensure you understand the regulatory framework governing REITs in South Africa , and keep an eye on market conditions that affect property values and rental demand.

Developing solid analysis skills to select the right properties is crucial for your success.

Networking with finance professionals and potential investors will be key to raising capital for your trust.

12. Property Development

Urbanization and economic development are driving the need for new and upgraded properties.

You’ll want to start with a clear vision for types of development projects that align with market needs and growth areas.

Secure knowledge about zoning, construction, and environmental regulations, which will be pivotal.

Cultivate relationships with local authorities, financial institutions, and construction companies.

Focus on locations primed for growth or regeneration to maximize potential returns.

Also, consider the social impact of your developments, aiming for projects that not only profit but also enhance communities.

13. Real Estate Legal Consultancy

Kicking off a real estate legal consultancy in South Africa taps into a niche market with significant demand.

Legal expertise is crucial in property transactions, developments, and disputes.

Start with a robust qualification and practical experience in property law.

Networking with real estate professionals, property developers, and banks will be vital for establishing a client base.

Ensure you’re up to date on South African property law, changes in regulations, and implications for property ownership, especially in cross-border transactions.

A consultancy that offers precise, reliable advice will become indispensable.

14. Commercial Real Estate Brokerage

The market for commercial properties is robust, driven by businesses looking to expand or relocate.

Dive deep into the specific needs of the commercial sector—office spaces, retail locations, warehouses—and understand what drives demand in various regions.

Building a strong team that shares your dedication to understanding clients’ needs will be essential.

Equip your business with the latest market data and trends, so you can provide clients with insightful advice, helping them make informed decisions.

You must also focus on creating a robust digital presence to list properties and reach potential clients effectively.

15. Vacation Property Rental Agency

Starting a vacation property rental agency in South Africa is an excellent idea , given the country’s allure as a tourist destination.

Your success hinges on identifying prime locations that tourists favour and offering unique lodging experiences that stand out in the travel market.

Focus on properties that showcase South Africa’s diverse landscapes and cultural heritage. Forge alliances with travel agencies and tour operators to create attractive packages.

Use the latest technology like AirBnB to streamline bookings, manage properties efficiently, and provide stellar customer service.

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Career Advice

Apr 11, 2019

Starting your Own Property Development Business

The South African property market suffered a significant dip prior to mid-2017, however, it finally seems to be recovering. Since September 2017, property prices have gradually risen – reigniting the market after nearly a decade of weak performance, 1  providing opportunities for emerging developers in South Africa. But, as with the founding of any business, there are far more factors to consider than only the opportunity for growth. If you are thinking of starting a property development business, here are the necessary steps to implement to get you on your way.

1. Acquire the knowledge

It’s vital that educating yourself about the property market is your first step: read property development blogs , watch for property growth reports or past development statistics 2 and learn to identify investment opportunities .

Before embarking on the journey of beginning your own business, make sure you’re well equipped to manage and lead its development. Discover your local competition, understand legislation, property taxes, and your potential target markets. Without acquiring knowledge of the local property industry, its past and future, you will find it difficult to accurately build a business plan that is suitably aligned to your business objectives. 3

2. Build a business plan

Now that you understand your local market and industry, you are in a position to develop long-term goals. It’s important to consider the larger business outcomes when you create the initial foundation of the business plan. 4  Perhaps you want to introduce new affordable property investment options to lower-income brackets, or your business goals aim to create entirely “green” apartment blocks for the city. Whatever your long-term objectives, your business plan should be able to support you in reaching them. 5

Since September 2017, property prices have gradually risen – reigniting the market after nearly a decade of weak performance

Once you’ve settled on your position within the market, you can begin using market research (looking at competitors, and growth opportunities), financial projections (required budgets, cash flow projections, and available tenders) and knowledge of local property law to set your short-term goals. 6 The following steps will see you hiring a team to support the different roles required (property strategists, real estate agents, financial strategists, conveyancers, contractors, engineers, etc.), settling on the nature of your first projects, and giving yourself clear return-on-investments to reach. 7

Learn how to make intelligent investment decisions, conduct property management effectively, and navigate the landscape of property development and entrepreneurship with this online short course.

Entrepreneur Magazine aptly summarises it, “[w]ithout a sound business plan, you’ll be unable to find funding […] it’s also the blueprint of the business and the best way to test whether or not the business is feasible.” 8 Your business plan becomes that much more pertinent if you’re relying on investors to fund the capital growth for your business in its early stages.

The best way to learn is experience

Starting a business is exciting, but it is always going to require that you’re willing to learn and tweak your business’s goals/plan as you progress. As you look at your initial developments, keep the following in mind.

• Location and timing: Property prices are heavily influenced by social, economic, political, and geographic factors. 9 Being aware of trends like the increased rate of commercial property developments in South African city centres will help guide you in making the right investment decisions. 10
• Zoning and title deeds: Every property is zoned for a particular purpose, and being aware of such will help inform your investment and development decisions. 11  Property conditions differ depending on location and property type – these regulations are laid out in the title deed (which can be found in the Deed Registries Office in South Africa), 12 and decide whether or not the conditions fit in with your plans.
• Building regulations: Changes and updates to building regulations require property developers to keep an eye on new legislation and policies as they are introduced. 13 The penalties for not following regulation can be hefty enough to sink young businesses. 14
• Property management: You’ll need to continually reassess built environments according to new legislation, social issues (i.e. water restrictions are increasing the desire for water saving instalments in Western Cape dwellings), 15  and tenants’ needs. 16 However, property maintenance should be focused on longevity, rather than trends or frugality. 17
• Grading levels: There are nine grading levels in South Africa, which limit the value of government tender (a public request for contracted services or products) that companies can apply for. 18 If you plan on applying for private or government tenders, it is vital you know which grading level you fall into (which is decided on according to annual turnover, track record, capability, and capital). 19

Adrien Goslett, CEO of RE/MAX, has recently stated that he anticipates “reinvestment (both local and foreign) in the country post-election if the fight against corruption continues and tough decisions are made”, and went on to say with hope that “[g]reater stability should lead to consumer confidence, and with that a more buoyant real estate market”. 20 While our economy has been slow and volatile in past years, there is optimism for the future, which provides a good foundation of opportunity for emerging property development businesses in South Africa. 

Click here to view sources

• 1 (Feb, 2018). ‘South Africa’s housing market accelerates’. Retrieved from Global Property Guide .
• 2 Yardney, M. (Aug, 2018). ‘How to get started in property development’. Retrieved from Property Update .
• 3 Yardney, M. (Aug, 2018). ‘How to get started in property development’. Retrieved from Property Update .
• 4 Rampton, J. (Aug, 2016). ‘7 steps to a perfectly written business plan’. Retrieved from Entrepreneur .
• 5 (May, 2018). ‘How to start a property development business’. Retrieved from Entrepreneur Mag .
• 6 (May, 2018). ‘How to start a property development business’. Retrieved from Entrepreneur Mag .
• 7 Yardney, M. (Aug, 2018). ‘How to get started in property development’. Retrieved from Property Update .
• 8 (May, 2018). ‘How to start a property business’. Retrieved from Entrepreneur Mag .
• 9 (Jan, 2018). ‘The outlook for South Africa’s property market in 2018’. Retrieved from Private Property .
• 10 Smith, C. (Oct, 2017). ‘Increase in rate of commercial property development’. Retrieved from fin24 .
• 11 (May, 2018). ‘How to start a property development business’. Retrieved from Entrepreneur Mag .
• 12 (May, 2018). ‘How to start a property business’. Retrieved from Entrepreneur .
• 13 (Feb, 2018). ‘Building regulations and by-laws’. Retrieved from MBA North .
• 14 Talane, V. (June, 2013). ‘R1,5bn Construction fines’. Retrieved from Corruption Watch .
• 15 Stevens, P. (Jan, 2018). ‘The outlook for South Africa’s property market in 2018’. Retrieved from Private Property .
• 16 Yardney, M. (Aug, 2018). ‘How to get started in property development’. Retrieved from Property Update .
• 17 (Nd). ‘Regular property maintenance reduces long term costs’. Retrieved from Trafalgar . Accessed on 14 March 2019
• 18 (May, 2018). ‘How to start a property business’. Retrieved from Entrepreneur .
• 19 (May, 2018). ‘How to start a property business’. Retrieved from Entrepreneur .
• 20 (Dec, 2018). ‘SA’s property marketing in 2019: predictions and expectations’. Retrieved from Property 24 .

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Property Development Business Plan Template

Written by Dave Lavinsky

Property Development Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their property development companies.

If you’re unfamiliar with creating a business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a property development business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Property Development Business Plan?

A business plan provides a snapshot of your property development business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Property Development Company

If you’re looking to start a property development business or grow your existing property development company, you need a business plan. A proper property development business plan will help you raise funding, if needed, and plan out the growth of your business to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Property Development Companies

With regards to funding, the main sources of funding for a property development company are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for property development companies.

Finish Your Business Plan Today!

How to write a business plan for a property development company.

If you want to start a property development company or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your property development business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of property development business you are running and the status. For example, are you a startup, do you have a business that you would like to grow, or are you operating property development businesses in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the property development and real estate industry.
• Discuss the type of property development business you are operating.
• Detail your direct competitors. Give an overview of your target market.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of business you are operating.

For example, you might specialize in one of the following types of property development businesses:

• Single-family detached housing : these types of property developers build free-standing residential buildings for sale.
• Multifamily housing: these types of property developers build apartment buildings, condos, and mixed-use developments.
• Developing and Subdividing Lots: these types of property developers purchase property, either developed or undeveloped, and clear it and prepare it for sale to builders.
• Commercial buildings: these types of property developers build and manage commercial buildings such as shopping centers or offices.

In addition to explaining the type of property development company you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the property business?
• What milestones have you achieved to date? Milestones could include the number of properties developed, reaching X percentage of vacancy/occupancy, reaching X amount of revenue, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the property development industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the property development industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your property development business plan:

• How big is the property development industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your property development company? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your property development business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, and small businesses.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of property development business you operate. Clearly, families would respond to different marketing promotions than businesses, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Property Development Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other property development businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes realtors, foreclosure markets, rental housing, or companies purchasing and remodeling their own building. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of property development company are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide finance packages?
• Will you offer amenities or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a property development company, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of property development company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you specialize in single-family detached housing, mixed use developments, or shopping centers?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the project types and/or services you offer and their prices.

Place : Place refers to the site of your property development company. Document where your company is situated and mention how the site will impact your success. For example, is your property development business located in a business or industrial district, or is it a standalone office surrounded by models? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your property development marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday Short-Term Processes

In this section, include all of the tasks involved in running your property development business, including answering calls, meeting with potential customers, performing construction, showing properties, etc.

Long-Term Goals

Your long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sell your Xth home, or when you hope to reach $X in revenue. It could also be when you expect to expand your business to a new city.  

Management Team

To demonstrate your property development business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing property development businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your management team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a property development business or successfully running a construction project management firm.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you develop 5 or 25 properties per quarter, and/or offer property management services? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your property development business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a property development business:

• Cost of construction equipment and supplies
• Cost of contract labor
• Cost of office space and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your model properties’ blueprints or a breakdown of development types you offer.  

Writing a business plan for your property development company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the property development industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful property development business.

Don’t you wish there was a faster, easier way to finish your Property Development business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to hire someone to write a business plan for you from Growthink’s team.

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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.

Testimonial 2

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.

Testimonial 4

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.

Testimonial 3

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.

Testimonial 5

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.

Testimonial 7

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.

About the Business Plans

We decided to introduce the South African business plans after noting that many South Africans were venturing into businesses without a full understanding of the industry, market, how to run the businesses, the risks involved, profitability of the businesses and the costs involved, leading to a high failure rate of the start-ups.

Our business plans will make it easier for you to launch and run a 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 business plans will lay out all the costs involved in setting up and running the business. They are designed uniquely for the South African market.

USES OF THE BUSINESS PLANS (PDF, WORD AND EXCEL)

These business plans can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your business
• As a project proposal
• Assessing profitability of the 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 SOUTH AFRICAN BUSINESS PLANS (PDF, WORD AND EXCEL)

All our pre-written plans include, 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),break even 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
• Why some South Africans in that type of business fail, so that you can avoid their mistakes
• Ways to raise capital to start your business in South Africa

All our agriculture pre-written business plans include technical aspects of how to keep and rear the animals / farm the crops. They also include a mini-directory with contacts which will prove to be helpful in launching and running the business. E.g. for broiler poultry we will provide the contact details for South African suppliers of feeds, equipment, day old chicks, abattoirs, training companies etc)

The Business plan package consist of 4 files

• Business Plan – PDF file (Comprehensive – Between 70-105 pages)
• Business Plan – Editable Word File (Comprehensive – Between 70-105 pages)
• Business Plan Funding Version – Editable Word File (Short version for applying for a loan – between 35-50 pages)
• Business Plan Automated Financial Statements – (Editable Excel file)

The financial statements are automated. This implies that you can change an item eg unit price, and all the other financial statements will automatically adjust to reflect the change.

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 Advice

8 steps to becoming a property millionaire

Investing in property can be a profitable venture if done correctly. Follow these tips and you will soon be well on your way to building a property empire .

1. Choose flats over houses

Most successful investors will tell you that smaller properties, like flats, generate a better return than houses.

If your budget can stretch that far, go for a 2 bedroom, 2 bathroom flat. The greater flexibility will make the property attractive to a wider range of tenants so it’s less likely to lie empty.

2. Be patient

Make sure that you weigh up the pros and cons of an investment before you commit. Always remember that property is a long term investment. If you want to make money from it, you need to be prepared to be in it for the long haul. Don’t put yourself in a position where you’re forced to sell quickly because you over extended yourself financially.

3. Look for ways to add value

One of the best ways to make money out of a property is to add value to it. Renovating bathrooms and kitchens, for instance, will ensure you get a better return when renting the property out and make you more money when you’re ready to sell.

4. Become tax-efficient

You will never become a property millionaire if you pay the taxman more than you absolutely have to. Speak to a tax advisor on the best entities for buying a property and how you can save tax on your rental income.

5. Don’t put all your eggs in one basket

If you were investing in stocks and shares, any financial advisor worth his salt would advise you to diversify your portfolio so that the risk is spread. The same would be true for property investments. Spread your property portfolio across different properties in different areas to minimise your risk.

6. Exploit local knowledge

There is little point in trying to spot a property bargain hundreds of kilometres away. You’re not an expert on the area and are not likely to be able to judge whether the location, price etc. are good or not. A bargain will be much easier to spot in your own backyard. It will also be much easier to keep an eye on your tenants if you live nearby.

7. Find professional partners you can trust

Unless you’re part accountant, part lawyer and part DIY expert you’re going to need professional help in building up your property portfolio. Finding dependable builders, lawyers and accountants is not just key to maximising your profits, but will offer you peace of mind during a complex process.

8. Don’t turn your nose up at unfashionable suburbs

You don’t have to pay a premium for a property in a fashionable area in order to make a decent return. A property in an unfashionable suburb will often give you a return that is as good, if not better than a more “happening” one.

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• Deciding where to invest
• How to flip a house: the ultimate guide
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• Interest-only vs repayment mortgages
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How to create a rental property business plan (and why you need one)

Last updated: 21 October 2022

Take it from someone who’s spoken to a lot of investors over the last few years: almost everyone who achieves great success started out with a solid plan.

All businesses start out with a plan . Even if that plan is just “I think I can buy this widget for £1 and sell it for £1.50”, it’s still a statement of what the business will do and how it will make a profit.

But many – in fact, most – wannabe property investors start out without even the most basic of plans. Often, people have nothing more than vague thoughts like “ property prices go up, so it’s a good investment ” or “ most wealthy people seem to own property ”.

It might feel like sitting around planning is just delaying you from getting out to look at properties and start making money. But take it from someone who’s spoken to a lot of investors over the last few years: almost everyone who achieves great success started out with a solid plan.

(Or to put it another, more painful way: almost everyone who didn’t start with a plan ends up disappointed with where they end up – however much effort, money and time they put in.)

What does a rental property business plan look like?

It certainly doesn't need to be 100 spiral-bound pages of projections and fancy charts. In fact, the best plan would be so simple that it fits on the back of an index card – meaning that you can commit it to memory and use it to drive every decision you make.

In order to get to that simplicity though, you might need to do some seriously brain-straining thinking first.

It's not easy, but it is simple: your plan basically just needs to set out…

Where you are now

• Where you want to get to, and
• What actions you're going to take to bridge the gap

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To give a cheesy analogy, you can't plan a route unless you know where you're starting from.

Working out your starting point is the easiest part, because it involves information that's either known or easily knowable to you.

You'll need to be clear about:

• The amount of money you've got to invest
• The amount of savings you can allocate to property investment in future years
• The time you can invest each week or month
• The skills and knowledge you can apply to your property business

Note that I said it was the easiest part, but still not easy – because it involves honesty about what you can commit, and self-knowledge to determine where your strengths lie.

Knowing how much money you've got to invest should be straightforward, but it's probably worthwhile speaking to a mortgage broker to check that you'll have borrowing options – because this will determine your total investment figure. A broker will also be able to tell you about your options around releasing equity from your own home, if that's something you want to consider.

I'd also strongly encourage you to consider what “emergency fund” you want to keep in cash, and deduct that from your total investable funds. I suggest having at least six months' expenses in the bank at all times: the last thing you want is to plough every last penny into investments, then lose your job the next day and be unable to pay your bills.

Where you want to get to

So now you know where you're starting from, where do you want to end up? In other words, what's your goal?

Yes, you want to be “rich”, or “secure”, or “build a future” – but what does that actually mean, in pounds and pence terms, for you?

And just as importantly, when do you want to have achieved that?

You might be surprised by how much thought is involved in answering these questions properly. It's easy to throw around terms like “enough to fund my lifestyle” and assume that it might involve an income of £10,000 per month, but it's another matter entirely to look honestly at your ideal lifestyle and determine what a genuinely meaningful figure is.

The same is true for “when” – and it's an often-ignored factor that actually cuts to the heart of the most basic of investment decisions.

For example, take a choice between two properties:

• Property 1 will give a return on your investment of 15% but will probably never increase in value
• Property 2 will give a return of 7% but has the potential to double in value over the next decade.

If your goal is to create a certain monthly income within three years, the Property 1 is likely to be a better choice. Growth is unlikely to happen to any great extent over that time, so you need to optimise for cash in the bank right now.

On the other hand, if you have a decade before you want to have achieved your goal, Property 2 is probably the better bet. It very much is a “bet” because you're taking something of a gamble on capital growth, but it's got a lot of time to happen – and when it does, your returns will dwarf the higher rental income you'd have made from the other property.

That's just one example of why making even simple decisions in your property business are impossible without having that most basic ingredient of your plan: where you ultimately want to end up, and when.

So, by this point in the plan you need to:

• Assess your finances to build up an honest picture of where you are now
• Put some serious thought into where you want to get to, and when

If you need help with this goal-setting process, I co-own Property Hub Invest which offers free strategy meetings . It's often easier to work this stuff out in conversation with someone who knows their stuff, rather than doing it all in your own head.

That's a great start, but for most people it'll produce an uncomfortable insight: the gap between where you are and where you want to be seems impossibly large! With the resources you've got now, how are you possibly going to reach your goal in a sensible period of time?

Well, that's where it's time to start thinking about the details of the third step: the strategy you'll use to pursue your goal.

A strategy to bridge the gap

The steps you take to get from Point A to Point Z are what's commonly referred to as your strategy – and strategy is a vital component of your business plan.

The way I like to think about strategy is the way you compensate for a lack of cash . It's an unusual way to look at it, but I find it useful – because it tells you (given your timeframe and your goal) how much heavy-lifting your strategy will need to do to keep you on track.

Think of it like this: if you had £10m in the bank and your goal was to make an income of £5,000 per month within a year, you wouldn't need any strategy at all . You could just use your £10m to buy any properties, anywhere – you wouldn't need to maximise the rent, manage them well or even keep them all occupied at all times! You'd be able to buy so much property that you really couldn't fail.

Sure, it'd be a pretty stupid thing to do – you should really have had a more ambitious goal – but you get the point.

Obviously, most of us aren't in that position – and that's why we need a strategy.

So, just what position are you in?

A rule of thumb

A handy way of looking at it is to take the amount of money you've got to invest in property, and assume that you can get a 5% annual return on that money (ROI) – which is a rough rule-of-thumb for a normal property bought with a 75% mortgage.

So, if you've got £100,000, you can generate a (pre-tax) profit of £5,000 per year – or £416 per month.

That's unlikely to be enough to hit most people's goals – but then there's the time factor. If you save up the rental income for 20 years, you'll be able to buy another batch of properties just like the first – so you'll now have income of £832 per month.

If you're happy with that, then you've already got your strategy: buy properties that will give you your desired ROI, then wait!

Portfolio-building strategies

But most people will want more than that: we've hardly been talking about life-changing sums, and 20 years is a long time to wait before you can buy again!

This is where more of an advanced strategy comes in, allowing you to get better results, faster.

This might include:

• Buying properties and adding value, so you can refinance at the higher value and buy your next property more quickly ( learn more about this strategy )
• Buying properties at a discount, allowing you again to refinance at the higher value and move on to the next one
• Turning properties into HMOs, so you can generate a higher ROI on them
• “Flipping” properties for a profit, so you can replenish your cash more quickly ( read my guide to flipping )

…or something else entirely.

I go into different strategies in enormous detail in my book, The Complete Guide To Property Investment .

Simply appreciating the need for one of these strategies from the start is a really big deal.

Most people don't: they'll rush in, use all their money to buy properties that generate (say) £500 profit per month, then…what? They'll be stuck – because they didn't go in with a plan for how they were going to get to their target number . They'll effectively be starting from scratch, having to scrape together the money to go again.

It's extremely common, and it doesn't surprise me – but it does frustrate me. If they'd started with just a bit of time making a plan, they wouldn't have made this mistake – because it would have become very obvious that they wouldn't reach their goal without applying some strategy.

Any of the strategies I listed (or a different one, or a combination of several of them), when applied effectively, can get you to where you need to be. But that's not to say that all of them will be equally good for you. Each of them has different risk factors, requires different time commitments, are suited to different skill sets, and so on.

That's why this is your business plan: copying someone else's homework isn't going to do you any good, because their skills, attributes and preferences will be different from yours.

For example, one person's plan might be to get their hands dirty by renovating properties for resale – completing two projects per year, and using the profits to buy an HMO. Within five years they'll have five HMOs, which will give them all the income they need.

Someone else might be hopeless at anything hands-on, but a master negotiator. Their plan could be to buy at enough of a discount that they can pull at least half of their funds back out again by refinancing – and keep doing that until in ten years' time they have 15 single-let properties giving them their target income figure.

(That's why when someone emails me asking if their strategy “sounds good”, I have to say that I don't know: usually it sounds like on paper like it would work for someone , but I have no idea if they're the right person to execute it.)

So, coming up with your strategy involves:

• Starting with an assessment of where you are now
• Deciding where you want to get to, and by when
• Seeing how far you'll fall short by just buying “normal” properties
• Thinking about your own skills, time and preferences to choose which strategy (or strategies) you'll use to fill in the gap

It might take a while, and that's OK – it's not an easy decision . To take the pressure off though, remember: your plan isn't set in stone. It's important to start with a clear vision and not get distracted by every new opportunity that comes your way, but every plan is just a starting point: you'll be seeing what works, reviewing and adjusting course along the way.

Once you've got a strategy down on paper, that's a huge step – and you should congratulate yourself, because it's a step that most people will never make (and will suffer for).

But of course, the act of writing the plan isn't going to magic it into existence: you need to get out there and execute on the plan.

Turning your property business plan into action

Having an appropriate goal and a solid strategy to get you there are essential, sure – but nothing is going to happen until you actually take the steps that are necessary to execute that strategy.

If you don't take the time to identify the steps and make a plan to carry them out, you'll end up in “pulling an all-nighter the day before your homework is due in” mode. And you don't want that: it's no good setting a five-year goal, feeling all virtuous for being such a strategic and big-picture thinker, then realising in four years and 364 days that you've not actually got any closer towards making it a reality!

So let's get those steps in place. And the good news is…it's really simple. (The best things usually are.)

Breaking it down

However big, ambitious and far in the future a goal seems to be, all goals are achieved in exactly the same way : by breaking them down into individual tasks, and working through those tasks one by one.

As you work through those tasks, it’s important to have sub-goals as “checkpoints” along the way.

Sub-goals are how you stay on track: by setting a deadline for each sub-goal, you can make sure that your progress is fast enough. They also keep you motivated, because it means you’ll always have a small “win” on the horizon: you won’t just be looking at the main goal (potentially) years off in the future. Think of them as mile markers at the side of a marathon course.

To put it another way:

Small task + Small task + Small task = Sub-goal Sub-goal + Sub-goal + Sub-goal = Overall goal

It's those small daily tasks that are the foundations of your achievement. And that's the beauty of a good plan: all you need to concentrate on is ticking off your tasks each day, and your overall goal is achieved automatically!

So, this final step in your plan is about breaking that big goal down into sub-goals, and those sub-goals down into bite-sized individual tasks. That's it!

As you break it down, there are a few things I find are useful to think about…

One-off tasks v recurring tasks

Your business will have two types of task:

• One-off tasks , like finding a mortgage broker
• Recurring tasks , like viewing properties and making offers

These two types of task will both appear in your weekly, monthly and quarterly to-do lists. A useful way of planning your time is to start by filling in your recurring tasks – like going through portals to find new potential acquisitions every day, and calling agents to follow up on offers once per week – then adding your recurring tasks on top.

By thinking about both types, you'll make sure you're not dropping the ball on the important day-by-day stuff, but you're also not ignoring the big-picture one-offs that are going to make a huge difference to your business in the long run.

The first, simplest step

Just like you break a goal down into sub-goals and sub-goals down into tasks, I favour breaking every one-off task down into the smallest possible unit .

For example, “find a mortgage broker” could be an important one-off task for you, but it's not something you can just sit down and do until it's done. Because it seems nebulous and you can never identify a block of time when you can do it from start to finish, you can end up never doing it at all.

Instead, you'll make yourself feel better by ticking off smaller tasks that seem easier – but are often less important.

The solution is to break every task down into as many sub-tasks as possible. So instead of “find a mortgage broker”, the tasks become :

• Email 3 contacts to ask for recommendations
• Post on The Property Hub forum to ask for recommendations
• Email everyone who is recommended to set up a quick call
• Draw up a shortlist of 2-3 people to have a longer conversation with
• Pick a winner

Doesn't that seem much easier already? You can imagine sitting down and bashing out the first task in five minutes right now, then you're underway!

Who will do each job?

Here's a potential lightbulb moment: you don't have to do everything in your business yourself.

Any business has different “functions”, or departments – like sales, manufacturing, and admin. A property business is no exception.

The basic functions of all property businesses are the same:

• Acquisition
• Refurbishment
• Refinancing/selling

The types of task that fall within each function will depend on your business plan. For example, if your aim is to find properties you can buy “below market value”, acquisition could be a major part of the business – involving direct-to-vendor marketing, networking with estate agents, and attending auctions.

On the other hand, if your model involves buying properties that you think will experience strong capital growth, there could be a lot more tasks in the “research” part of the business – and acquisition could be very straightforward once you’ve identified the opportunity itself.

Could you do every task within every function yourself? Maybe.

Could the business achieve better results if you bring in specialists to do what they do best? Definitely .

You could go big and employ an assistant to view properties and make offers for you, or just make sure you outsource functions like management and accountancy to the relevant professionals.

Whatever you do, once you start thinking about your property venture as a business with various departments, you'll start to break away from the idea that this is something you have to do all on your own – and that's a very powerful insight.

OK, this has been a long one – but we've covered a lot of ground.

To recap, those critical steps are:

• Assess where you are now
• Work out where you want to be, and by when
• Outline a strategy to get you there
• Fill in the detail, to get you from “big picture” to individual steps

It's a process that's worked for me, and I've seen it work for many investors I've encouraged to put it into action too.

Its power is in its simplicity: you take the time to intelligently decide exactly what you need to do, then you figure out a way to (to borrow a registered trademark) just do it . As long as you show up and work through your to-do list each day, the big, scary, long-term goal takes care of itself!

Of course, you'll need to assess your progress and adjust course along the way: nothing will pan out exactly as expected, and there's a lot that can change over a timespan of several years.

But by having your plan, what you won't do is get distracted by every new idea that comes your way – researching HMOs one day, and holiday lets the next – and end up getting nowhere.

(You'd be amazed by how many plan-less people that description fits to a tee.)

So now you know how to put a property business plan together. It's not a plan that will necessarily get you funding from the bank, but it's something more important than that: a plan you can use every day to make sure you stay on track to hit your goals.

The one thing that every successful investor does

Saturday, August 31, 2024

Transnet signs R5bn loan with New Development Bank to improve its freight rail services

Finance Minister Enoch Godongwana welcomed world leaders and delegates to the 9th Annual Meeting of the New Development Bank. Picture: Vernon Pillay/Independent Newspapers

Published 3h ago

Transnet on Friday signed a R5 billion loan from the New Development Bank (NDB) at the opening of the bank’s 9th annual meeting, which started in Cape Town on Friday.

The loan agreement, which is guaranteed by the South African government, aims to lift the efficiency of South Africa’s freight rail systems, including improving its rail network, financing the overhaul of its locomotives, and helping fund new wagons.

South Africa’s buckling freight rail systems have in recent years become an impediment to the economy, with industry and mining groups having lost billions of rands of potential exports each year due to problems with the rail network. In July, the African Development Bank Group approved a $1bn (R18.85bn at the time) loan for its recovery and growth plan.

Since the NDB was established in 2015, it has become a formidable agent for infrastructure development finance among its member countries. These include South Africa, which has received $5.8bn (R102.3bn rand) in funding for 13 projects, including R3.2bn for Phase Two of the Lesotho Highlands Water Project, and R3.5bn for the Durban Container Berth Rebuild Project.

NDB president Dilma Rousseff said they were delighted to partner with Transnet in this “transformative initiative”.

“By modernising the freight rail sector, we aim to facilitate more efficient logistics operations that will benefit the entire region and align with our goal of investing in a sustainable future,” she said.

Transnet Group chief executive Michelle Phillips, who signed the loan for Transnet at the NDB meeting, said: “This investment is important for Transnet as we accelerate implementation of the Recovery Plan and economic reforms.”

The NDB was created in 2015 by Brazil, Russia, India, China and South Africa to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries.

Finance Minister Enoch Godongwana said the NDB needed to be “unwavering in its quest” to meet the UN’s Sustainable Development Goals, as developing countries were facing serious challenges in infrastructure and development funding in the context of the weak global growth environment, high interest rates, geopolitical tensions and climate change.

All these were exacerbating problems of poverty, unemployment and inequality in BRICS countries..

“As more African countries become members (of the NDB) we believe the bank can play an increasingly important role in provision of infrastructure,” said Godongwana.

“We look to the NDB to provide solutions aimed at de-risking infrastructure projects through its financial instruments to attract private capital. This will support infrastructure projects and provide technical assistance in designing innovative funding models and institutional arrangements that could accelerate infrastructure investments at a country-level.”

He said that if the NDB was to continue advancing the interests of the developing world and address challenges such as renewable energy, infrastructure development, digital access and job creation, then the bank should speed up disbursements of approved projects.

Godongwana said the NDB’s activities in developing and emerging markets would assist in addressing the large infrastructure financing gap that had been impeding economic growth and development, particularly in Africa.

“In this slow growth environment, where fiscal and monetary policy is limited, public and private role players need to collaborate to support growth,” he said.

BUSINESS REPORT

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South Africa struggles to track $8.7 billion in property assets

The value of South Africa’s planned investment projects surged to an annualized 793.7 billion rand in the first half of this year.

• South Africa's government lacks accurate information about its properties and their usage.
• Efforts to audit the real estate portfolio have been unsuccessful.
• South Africa needs 4.8 trillion rand by 2030 for transport, water, and other infrastructure projects, with Johannesburg requiring 221 billion rand for infrastructure repairs.

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South Africa ’s government, which holds the largest real estate portfolio in the country, lacks an accurate account of its properties or their usage, with efforts to audit the portfolio dragging on without success.

Official records list about 88,000 buildings and five million hectares of land, valued at an estimated 155 billion rand ($8.7 billion), according to Bloomberg .

However, Public Works and Infrastructure Minister Dean Macpherson expressed doubts about the accuracy of these valuations and whether all assets have been properly identified or documented.

“I am not happy with, and have very little confidence in, the asset-management register that has been presented to me because a lot of it does not make sense,” he told reporters in Cape Town on Wednesday. “One property is valued at 5 million rand when I know that should have a 200-million-rand valuation.”

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The newly appointed minister, Dean Macpherson, who took office in June is grappling with addressing South Africa’s incomplete property records.

One possible solution being considered is creating a property management trading company, which would allow the government to use its real estate assets to help finance infrastructure development.

President Cyril Ramaphosa stressed South Africa’s significant infrastructure needs, stating in March that 4.8 trillion rand is needed by 2030 for transport, water, and other projects. Per a city council review , Johannesburg, Africa's wealthiest city , requires 221 billion rand ($12 billion) to address its infrastructure crises.

DON'T MISS THIS: Africa's richest city needs $12 billion for infrastructure repairs

The value of South Africa’s planned investment projects surged to an annualized 793.7 billion rand in the first half of this year, a significant rise from 193.2 billion rand in 2022, according to a recent report by Nedbank Group Ltd. Government entities and public corporations account for about 75% of these projects.

To fast-track these mega-infrastructure developments, a new government office called Infrastructure South Africa has been created. This office is designed to streamline bureaucracy and attract domestic and foreign investment.

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South Africa is investigating alleged corruption of more than $7-billion at top state-owned companies

South African President Cyril Ramaphosa appears at the Zondo Commission of Inquiry into state corruption in Johannesburg, South Africa, on April 29, 2021. Kim Ludbrook/The Associated Press

South Africa has active investigations into alleged corruption of more than US$7-billion at some of its top state-owned companies, according to a report published Tuesday by the national anti-graft unit.

The investigations are not new, and some have been running since 2018, and all of them were cited by the Special Investigative Unit (SIU) in a report to a parliamentary committee to give an update on the status of the probes.

Those investigations involve six state-owned businesses: ports and rail company Transnet, arms company Denel, power utility Eskom, the National Lotteries Commission, national airline South African Airways and passenger rail company PRASA. Around 60 suspicious contracts and hundreds of cases of conflict of interest and other alleged corruption worth nearly US$4-billion of public money are under investigation at Transnet alone, according to the report.

Also, there are nearly 40 other continuing investigations into alleged corruption involving different state-run businesses and national and provincial government departments worth billions more dollars. Even more investigations have been finalized by the SIU ahead of being made public.

The SIU’s work reveals some of the scale of South Africa’s corruption problem over the past 15 years.

There were allegations of widespread corruption over lucrative government contracts during the administration of former president Jacob Zuma, who led Africa’s most advanced economy for nine years before stepping down in 2018 because of the allegations.

A judicial inquiry into high-level corruption during that era implicated numerous government officials and executives at state-run businesses in taking kickbacks and bribes from businessmen in return for government contracts or favours. The culture of graft permeated through all levels of government, according to the allegations. Hardly any of those implicated have faced criminal charges.

It had devastating effects on South Africa’s economy, including the near collapse of its electricity supply because of graft and mismanagement at power utility Eskom, a company at the heart of many of the scandals. South Africa was plunged into record levels of nationwide blackouts last year because of the crisis at Eskom.

More than 270 contracts at Eskom worth around US$2.2-billion are under scrutiny in an SIU investigation that has been running for six years.

Opinion: As the party of Mandela crumbles, South Africa faces a democratic reckoning

Investigators believe US$540-million was lost to corruption at passenger rail company PRASA, some of it through a scheme where money was allegedly stolen through payments made to more than 1,200 “ghost employees” who didn’t exist, the SIU’s report said. One contract under investigation worth more than US$300-million dates back to the 2010 soccer World Cup that South Africa hosted.

South Africa’s then-ruling African National Congress party became synonymous with allegations of corruption during Mr. Zuma’s presidency. Graft was a central issue in this year’s national election in South Africa, when the tainted ANC lost its majority in parliament for the first time since the country became a democracy at the end of the apartheid system of white minority rule in 1994.

Current President Cyril Ramaphosa has pledged to clean up his party and government and bring those responsible to justice, but anti-corruption experts have said it’s unlikely that much of the money will be recovered.

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