House Nxusa, a multi-unit property development, provides affordable residential rental units in Spruitview – a large township situated in the South of Boksburg, just east of Katlehong in Ekurhuleni, Gauteng, South Africa.
Menzi was born in Pietermaritzburg and later moved to Durban to complete his tertiary education. During this time, his mother retired due to illness and was keen to invest her retirement funds in something profitable. Menzi advised her to invest her money in property. Although he did not know much about the property game at the time, he did know that property was an asset that would yield returns and benefit his mother in the long run.
The challenges of property management
Mrs Nxusa purchased two flats in Umbilo, Durban and with Menzi’s assistance allocated estate agents to manage the properties. Unfortunately, they were disappointed in the service they received. Menzi decided he could do a better job managing the properties himself, thus making R9 000 per month for his efforts.
The biggest challenge the mother and son pair faced with property management was the process of vetting tenants and collections. Tenants would leave units in a poor state and the estate agents were unaware of this because of they were not hands-on in their management, resulting in unnecessary expenses for Menzi’s mother.
With a total investment of R1.2-million, Menzi found that he was receiving very little return and so began exploring other property opportunities. At the same time, his wife was promoted from her role and relocated to Johannesburg while he continued his full-time job in Durban. As such, his exploration drifted to Johannesburg where he found a new property to invest in Spruitview.
UMaStandi steps in
In the Spruitview property, Menzi’s goal was to create a multi-let property of 16 units. After purchasing the property, he began by building a block of 4 units. Menzi recalls that, “the property had been used as a dumping site and we used 15 tipper trucks to clean it up”. He financed the units by resigning from his job and selling the remaining properties in Durban. Upon completion of the first block, he began the construction of the second block. However, his finances were depleted – which is when he contacted uMaStandi.
In desperate need of finding a financier to assist him, Menzi was disappointed to be turned away by various banks. After much research he came across uMaStandi, who in turn recognised the potential and passion in Menzi to run a profitable, sustainable, and legal township based rental business that would provide decent and affordable accommodation for tenants.
With funding from uMaStandi in place, the property has been successfully developed into a double storey multi-let development of 16 units.
Menzi’s tips for success
As an entrepreneur, Menzi believes that the most important attribute in a property journey is to have patience and not rush into decisions. Property is a long-term game. “I recall lacking the knowledge of parking allocations and property ratios at the time of purchase,” says Menzi. From this experience, Menzi learned the importance of doing your research. He further recommends gathering a strong team of professional individuals when pursuing property projects.
“Property investment is all about diversifying your portfolio, having assets that can yield returns. Also, it is safe. Looking at the impacts of Covid-19 on most investments, residential property investment for me has worked out well. I am having issues with one or two tenants, but I have been sympathetic because they have been retrenched.”