Savoy Estate – It’s a flipping delight

Widespread densification in Johannesburg in recent years has dramatically altered the residential landscape. With most areas now dominated by sectional title or cluster developments, finding accessibly-priced renovation gems is becoming increasingly difficult.

A beautifully renovated five bedroom home with great attention to detail and eclectic designer touches throughout. Set in a landscaped garden with excellent security including electric fencing and motion sensors linked to CAP, it also has two separate staff quarters and is on the market for R3.3 million.

There are now only a handful of desirable suburbs where one can still find older homes that offer investment buyers a solid After Repair Value (ARV); the sum for which a house will sell once it’s been renovated and has the proverbial white picket fence.

There are also few remaining areas where young families can get a foot on the property ladder in a comfortable freehold “fixer-upper” that can be modernized over time, rather than cramming everyone into a small semi.

According to Howard Hoff, Lew Geffen Sotheby’s International Realty Area Specialist in Savoy Estate, Highlands North and Glenhazel, one of these scarce hunting grounds is Savoy Estate, where freehold properties can still be found for less than R2 million. And as a bonus for family buyers, besides being close to the first-rate entertainment and shopping hub of Melrose Arch the suburb is also a catchment area for several good schools.

“Depending on budget and the amount of renovation a buyer is prepared to undertake, older properties can still be found for between R1.5m and R1.9m. And once they’ve been given some TLC they can go back on the market for up to R3.8m.”

He adds that most of the homes are structurally sound with flowing floor plans, so often new bathrooms and kitchens plus a lick of fresh paint will significantly transform a house.

“Around 80% of the homes in Savoy Estate are still freehold and there is a fair amount of stock available, but since 2015 we have seen investors become increasingly aware of the value to be found in the suburb and we have sold three older houses in the past three months alone.

“Until recently the majority of purchases in Savoy Estate were buy-to-live, but both the investment purchasing and rental markets have gained momentum.”

Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, says: “When buying a home to renovate and resell, the rule of thumb is that the total cost price should never amount to more than 70% of the ARV for it to be profitable, and in Savoy Estate this is still easily achieved if investors know what they are doing.”

Geffen advises that in order to maximise profits and avert costly hurdles and delays, buyers looking for renovation projects should first do their homework across several fields:

- Know your local market - are you buying in an area where property values are increasing, is the property in a transitional or established suburb, what are the demographics and are there amenities like good schools nearby?
- Make sure you have the right team in place - time is of the essence in house flipping and delay is one of the biggest factors that will erode profit. The return diminishes with time because the longer the renovation project, the higher soft and carrying costs such as financing payments, insurance and utilities will be. So do the job well, but do it fast.
- Be aware of the five common mistakes made when house flipping - not enough time to complete the project, not enough money for the necessary scope of work, over-capitalising, inadequate skills for a professional finish and – most basic of all – impatience while house-hunting that results in costly mistakes. Rather take a bit more time to find the right property at the right price.

As an established suburb with easy access to a major highway and main arterials, St Mary’s School for Girls, Waverly Synagogue, Melrose Arch, Rosebank Mall, Rosebank Zone and the Norwood Mall, Savoy Estate ticks all the boxes for investment buyers.

The planned introduction of the Rea Vaya rapid transit bus service along Louis Botha Avenue will also significantly ease commuting to both the Johannesburg CBD and Sandton, while new office parks are springing up in Waverly and Bramley.

Hoff says: “This is all contributing to the revitalization and stimulation of the area which, in turn will drive property values. But while this is great news for current owners it does limit the window of opportunity for investors to buy in at the current prices.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us