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This property is fertile ground for innovative thinking!
The property lends itself to a number of uses:
Multi-generational living with an extended family each having their own living space
Work from home possibilities with dedicated office space with its own street access.
Shared living with unrelated parties and, just as importantly, to ensure the property is occupied at all times. This is how the property has been used for the past few years with a combination of work from home, business and private tenants ensuring the property is always occupied.
... or any combination of the above.
Property value
The normal basis for property valuation is recent sales of comparable properties eg Lightstone Property Valuation The problem is that there have been few recent sales of comparable properties. Fairhurst is unique! A comprehensive Market Comparison provides detailed background about the current market conditions in the area and highlights the uniqueness of the property.
Two alternatives provide a better basis for valuation:
1. Return on Investment valuation
The estimated rental income by Perplexity is R98 500 pm and R99 000 pm by ChatGPT. See reports attached. This is based on an analysis of all houses available for rental in Lower Constantia. Assuming 7% net return (or 10% gross), yields a value of R11.5m.
2. AI Valuation of comparable sales
A detailed AI-powered multi-variable regression analysis was performed on all sales in Lower Constantia over the past 12 months. The report from ChatGPT 5 .0 is attached.
The median value calculated from the regression is R12.3m, with a 68% confidence interval it is between R10.4m and R14.7m. (Valuation is not an exact science!)
At R0.8m less than the median AI calculated value, the proposed value of R11.5m is conservative and aligns with the return on investment value.
Property holding costs:
Rates R2 528.86 pm
Garden & pool service & security R3 700 pm
Insurance R1 288.53 pm
Development potential
In terms of the City of Cape Town's Densification Policy, a number of options have been investigated and are available for any purchaser:
Sub-division into two stands, with the house on one and the cottage on the other
Sectional Title into 2 or 3 sections
Re-development of the entire property into 3 or 4 townhouses.
Another possible option is to add a second floor to part or all of the main house. The stand size and Zoning regulations would permit that. Radical? Yes, but less radical (and expensive) than demolishing all the buildings and starting from scratch.
Additional en suite bath rooms: See the notes on the Fairhurst page on how the house could be modified from the current one en-suite bedroom to three en suite bedrooms - modernizing the bathrooms in the process!
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