It has been said that every journey begins with a single step. For Thomas Chauke, the owner of Gardenia at 149 Johnson Street, his journey towards becoming a successful property owner began by walking 10 km to, and 10 km from, school every day.
After moving to Pretoria upon matriculating, he started another kind of journey, one that took him into property development.
His first acquisition came about through a chance opportunity to buy a property from a friend. Thomas had some experience already in being a business owner, with his entrepreneurship beginning by buying and running a driving school.
After obtaining his degree in Electrical Engineering, Thomas worked for Eskom and then Telkom as a technician. With the money he earned from the driving school and his career, he made his first investment – a single unit in a building – and quickly saw the value of having a predictable rental income every month.
Enthused, he set himself a goal of obtaining five buildings. However, he soon realised that the capital outlay to purchase buildings was considerably more than required to purchase single unit apartments. That is when he turned to TUHF for help.
“The first building I wanted to purchase was valued at about R20 million. The requirements from other banks were very difficult, but I found TUHF to be much more user friendly,” he explains.
His purchase of Gardenia in Pretoria was unique in that it is part of a bouquet of other properties. Gardenia consists of ten 1-bedroom units and ten 2-bedroom units. The property did not require major refurbishing, but rather minor renovation and maintenance work.
The key attractor to the purchase was the building’s location. Situated close to a main road, Gardenia offers residents easy access to transportation. “There are a lot of people who stay in town who cannot afford to rent in the suburbs, which command higher prices. Because of its location, however, they can rent in town and still more easily travel to the suburbs and back,” he explains.
Gardenia is also near by a railway station and university. This makes it ideal for the property’s target market – students, young professionals and those starting out in their adult lives. It also caters to young families. As Thomas notes, those who are already well established do not normally prefer to stay in town.
The property offers two essential amenities – Wi-Fi and a shared laundry. Internet connectivity is either provided as part of the rental agreement or on an ad-hoc basis through the use of tokens. While younger tenants have been interested in sharing the two-bedroom units, the pandemic has driven up interest in the one-bedroom units, as people prefer to have their privacy.
Other than that, the COVID-19 pandemic has not had much of an impact on the student accommodation business, with Thomas still expecting a 12% return on his overall investment.
One learning from his experience that he shares is the value of having a satellite office and several properties close to one another. This makes property management considerably easier, enabling one caretaker to manage several properties.
Thomas does not intend to stop investing in properties, but plans to keep moving forward, taking one step after the next as he did to obtain his education, purchasing further properties and growing his business, with a trusted partner in TUHF.
“Whereas other banks require you to present the details of your project to try secure funding they do not give you support if you are successful. In TUHF I have found ongoing assistance and guidance all the way,” he concludes.
Project Name: Gardenia
Location: 149 Johnston Street, Sunnyside, Pretoria
TUHF Product: Funding to purchase the building at purchase price of R7,500,000
Original configuration: 10 one-bedrooms and 10 two-bedrooms, for a total of 20 units
Configuration upon completion: 10 one-bedrooms and 10-two bedrooms, for a total of 20 units
