Apartment building 743 on HM, named after its street address – 743 Herby Mdingi Street, Orlando East, Soweto – is a high in demand two storey block of 12 micro-apartments for young professionals.
For Kgomotso, becoming an entrepreneur was a path that she seemed destined to follow. It began with selling chocolates at school and helping her mother with promotions at large retail stores when she was a child. The journey progressed with the establishment of her first business, a café within the corporate headquarters where she worked, having identified a gap, whereby employees did not have an appropriate place to have lunch within the complex.
In 2015, the husband-and-wife team purchased a three-room property in Orlando with the intention of converting it into student accommodation. However, they subsequently found it difficult to secure funding from traditional banks and investors who hesitated at supporting township developments due to risks associated with typically lower rentals.
After struggling to find funding to help realise their dream, the solution to their challenge came about when Kgomotso was introduced to uMaStandi – a member of the TUHF21 Group that specifically funds rental property entrepreneurs in townships.
While providing funding enabled the couple to demolish the existing structures on the site and to build a new development from scratch, uMaStandi provided something equally as essential – guidance. Kgomotso took the lead on developing the project and she dedicated time to attend property development courses through uMaStandi to gain an understanding on what was permissible from a development point of view as well as the intricacies involved in being a landlord.
Along with offering guidance to Kgomotso in assembling her ‘power team’ of contractors, uMaStandi provided her with insight into the area and what she could charge for rental once the development was complete.
“They advised me on what other developers are charging, and the market rate for the area where the property is located” she explains.
The pandemic and subsequent lockdowns posed a challenge, pushing the project deadline out and it was completed in September 2020. From the beginning, it became clear that there was high demand for these compact and self-contained apartments.
“By the time we completed the building, we already had 50% of tenants secured. Even before we finished our first floor, we had people interested and wanting to live in the ground floor apartments. It was overwhelming to realise that there is a significant need for these kinds of rental micro-apartments” she adds.
Each unit has a bathroom with a shower and toilet and a kitchenette with space for a fridge and microwave. Stoves are provided as part of the unit with rentals for the open plan bachelor units ranging from R3 000 to R5 650 per month.
Two critical features are Wi-Fi and parking. Since most of those living in the apartments are young professionals, many of whom are working from home, stable Wi-Fi and internet access being part of the rental is a major selling point. The property also has five dedicated parking bays and additional space on the grounds for another seven cars within the secure boundary wall.
Additionally, a caretaker who lives close by attends to any property-related issues. Water is included in the rental, but electricity supply is available on a prepaid meter basis in each unit.
Kgomotso’s key learnings from this development journey includes the need to plan properly and to coordinate one’s project team, ensuring that their services, whilst interdependent, do not clash. Another learning was management of cash flow, that is, the ability to smooth it out and timeous submission of invoices to avoid delay in contractor payments upon completion of work.
While 743 on HM was the couple’s first development, it is not their last. They already have another one in the pipeline, in the same area, and they will be working with uMaStandi to renovate a residential home into another 12-unit micro-apartment property.
“We have been so blessed with working with uMaStandi because they didn’t just provide the funding, they worked with us on the property development journey, from the beginning to the end of the project, even during the time when we were in lockdown” she concludes.