PROPERTY LETTER NO 14 – 26th August 2002

Posted by admin in Property Letters | August 26th 2002

Dear All,

It has been suggested to me that I send these letters one by one rather than to a group for various reasons, so I will do that.
I fly to Italy next month for a few days where our great friend Ross from Durban and I are exhibiting at a Gardening Expo in Padova. We have six or so S.A. manufactured items to sell in Southern Europe (and distribute from Cannes in the future). Our items are a collapsible greenhouse, some ingenious shelving, a hose reeling device (new patent), some hoses, another clever new patent called a tiller-weeder, and a hydroponic system for the greenhouse or to stand alone. We have received S.A. Department of Trade and Industry support for our venture, so they are picking up a good proportion of the costs, which is a relief. The show is from 13 – 15 September, after which Ross and I will go to Cannes for a few days to set up our distributorship legally, then he will return to SA and I will stay on another week to attend to property business, and to spend some time looking for a second hand car and searching for accommodation for Steve and Avril, which I know is not going to be easy.

Dates:

Fly to Italy – 10th September
Arrival in Cannes – 17th September
Depart Cannes for Cape Town – 27th September
Vicky & I arrive in London – 10th October
Fly to Cannes – 12th October
Vicky returns to Cape Town – 30th October
I return to Cape Town – 7th November

Steve and Avril have left Zimbabwe now and are on their way South, enjoying a well earned break with Avril’s sister and brother in law, and admiring the fabulous and famous spring wild flowers of Namaqualand and the Karroo. They arrive in Cape Town this week, which we look forward to very much. It will be good to see them, and to have the opportunity to spend time together concentrating on and planning what lies ahead once they reach Cannes, to start work properly on 14th October. I am sure that you all join me in wishing them success and happiness in their new home and environment. What a very courageous move by them (a leap of faith), and one that I have very little doubt will bring them opportunities and pleasures that they haven’t dreamed of, in one of the loveliest parts of the world. I hope that many of you will have the opportunity to meet them there in the years ahead, and allow them to show you around.

Marketing our properties is a subject I have threatened to enlarge upon. What are we going to do, and what are the opportunities? I have told you that Cannes is a major European centre for conferences and expos. It’s hard to imagine just how major so let me give you an idea with some of the numbers:
Because we all know about the Cannes film festival, I’ll start with that. The figure in brackets is the number of beds required, and where there is no figure, it is not stated.

MAY 2002 – 15 au 26 – Festival International du Film – (78 000 beds)
JUNE 2002 – 1 au 8 – Festival International de la Performance d’Acteurs
– 4 – Reunion Compagnie d’Assurances
– 4 au 6 – Symposium de l’Eau
– 9 – Rencontre Chorales d’Enfantes
– 16 au 22 – Festival International du Film Publicitaire – (9 000)
– 23 au 26 – Nouveau Salon Publicitaire – (3 000)
– 29 – Spectacle Maison des Rapatries
– 29 – Gala de Danse Jazz Espace Loisirs Emile Roux

And so it goes on each month. Some of the other big or interesting gatherings coming up after Steve and Avril arrive are :

OCTOBER 2002 – 7 au 11 – MIPCOM – Marche International des Programmes pour la Television, la Video, le Cable et le Satellite – (11 000)
– 21 au 25 – Tax Free World Exhibition – (12 500)

NOVEMBER 2002 – 3 au 7 – Congres Gartner – ITXPO – (6 000)
– MAPIC – Marche International des Professionnels de l’Implantation Commerciale et de la Distribution – (5 600)
– 28 au 30 – Congres Medical – (650)

JANUARY – 2003 – 28/12/2002 au 5 – Salon des Antiquaire – (7 500)
– 8 au 10 – Football Expo – (10 000)
– 19 au 23 – MIDEM – Marche International du Disque et de l’Edition Musicale – (11 000)

FEBRUARY – 2003 – 3 au 7 – MILIA – (7 500)
– 17 au 21 – 2003 GSM World Congress – (25 000)

MARCH – 2003 – 4 au 7 – MIPIM – Marche International des Professionnels de l’Immobilier – (15 000)
– 24 au 28 – MIPTV – Marche International des Programmes de Television – ( 11 000)

I have left out many because numbers are not stated, or they number in the hundreds, but it gives you an idea of the sort of thing Cannes caters to, and at what intensity. We will get into this market, and onto the books of some of the companies that service the accommodation needs of these gatherings. What is not stated by the statistics is the fact that there are legions of support staff, organizers, and crew that have to locate and be accommodated in the run up to the functions, and in the days immediately after them. The stats only tell part of the story. It will be our aim to avoid the middle man in due course, and to acquire a group of clients that deal with us directly, but obviously that will take time.

The holiday market is another source of bookings that we will pursue, and this will have to grow. A large measure of the success of this market will depend on us providing what holidaymakers want, so that they tell their friends, and come back themselves.

We have not worked on our website, but will do so as soon as we can take photos of our flats, ready for occupation. It will be our biggest marketing tool I believe. There is a whole generation out there who wouldn’t know how or where to book and pay for accommodation other than through the web. They can not imagine another way of doing it, and have no need of travel agents, banks and cheque books.

Another very effective and inexpensive marketing tool in Europe is to be well known and registered with the local tourist information and publicity offices. There is a constant stream of people passing through these offices for accommodation advice to the extent that we often have to queue. Vicky and I use them, they are extremely pleasant and helpful, have information at their fingertips, speak all main European languages, and hand out free brochures (with our name in them in future), and free maps of the City and surrounding areas. It is the first port of call for many when they arrive in a City – just look for the big “i” for information sign. Government publications and websites are also very good and widely used and referred to as a first port of call by people planning their holidays. It is the most inexpensive advertising that is available and should not be underestimated.

We have developed a close communication and become friendly with the owner of a small company that is keen as we are. They are called Cote d’Azur Locations, and we can work with them to our mutual advantage – in fact we must have cooperation with people like this, because Steve will not be able to do everything alone. Their owner’s philosophy is: “No locateur is too difficult, no owner too demanding – everyone is different and will have their own expectations, and this is normal. We aim to provide services to the highest standards and with the greatest flexibility. Only this way will all our clients be happy. The Cote d’Azur is all about enjoying life and having fun, and we are aware that we can be responsible for making or breaking a holiday, not to mention the success of a property investment.”

When we say your property will be managed for you, what do we mean? (Some of this I have spoken of in previous letters)

o Details of all financial transactions in respect of your property will be constantly updated, and once we are up and running (as soon as possible), posted on your own page of the website which only you will be able to access via a pin number.
o Banking, and payment and control of local accounts for water and other amenities, taxes and levies etc., can be handled for you if you wish.
o Floats for minor maintenance and monthly payments received and receipted. This float can be topped up as required from rentals, booking fees or by the owner, and in due course we will recommend what amount that float should stand at.
o Regular property inspection for damp and damage.
o Inventory control. Everything in the flat.
o Contracts prepared and signed.
o Rents received and receipted.
o Deposits and booking fees received and receipted, and deposits refunded after inspection of the flat.
o Basics such as control of keys, ensuring that toilets are in working order, and that doors windows and gates are left locked.
o Maintenance and cleaning sub-contracted. Minimum standards will apply, certain minimum items must be available to the tenant, and the property must be spotless for viewing and incoming occupants. Holidaymakers expect a higher standard than they have at home, so comfortable beds and sofas etc. are a must. (People take greater care with items that they can see the owner cares about, so it pays to furnish and equip a property well, and the cost of doing so is relatively affordable in Europe. Vicky now has extensive price lists of most items that any of us would require, from bathrooms and kitchens, to washing machines and dishwashers, furniture, kitchen appliances, linen, cutlery and crockery.)
o Rubbish removal.
o Light bulbs checked and replaced from owner’s supply.
o Ensuring water, gas and electricity supplies are working.
o Fabric and furniture checks.
o Electricity, water and gas turned off when not in use. Fridge doors left open.
o Quotes to completely equip a property from scratch if required.
o E-mail to owner with property appraisal or report from time to time.

That’s a broad outline of the services that we expect to provide, and there may be more once we are up and running. The 12.5% “management fee” which appears in all the expense columns in the Property Analyses that I have sent you, is expected to cover the costs of providing those services. The other management companies we have seen charge between 15 and 20% of rentals received, and we will try to make out on 12.5%. I don’t yet know if we will manage, but I am hopeful that we will. When we started the Beatrice Syndicate, many of you will remember, we were told that we would never survive on a charge to members of only 1% of the value of their purchases, but we did for more than 10 years, and very successfully. So we’ll see.

We have allowed a sum of €70 per apartment per month for advertising, and that appears in the expenses column in the workouts that you have had from me, however it remains an estimate. Also allowed for is €50 per rented week for cleaning services.

Other services can be provided or arranged, such as food parcels, airport pickups, laundry or maid services, babysitting, quotations for larger maintenance or building work, furniture refurbishment, etc.

Whilst in Cannes next month I will obviously look at new apartments, but aim to concentrate more on acquiring new properties for those of you who are still waiting for one when I am there in October with Vicky. But you know what it’s like – very often one is presented with a scenario such as – “this one is a must, and if you don’t take it today it will be gone!” Well, I’ll handle those situations if and when they arrive. I will also spend time at Entenial Bank and with the Notaries to make sure that transfer of all the remaining properties is nearing completion, and that there is no information that they need that is outstanding, and furnish it if there is. (Of course this month has been a write off because Europe all but closes in August as the population goes on holiday). I hope that we will set about fixing where necessary and furnishing all the eight apartments as soon as we arrive there with Steve, and start renting as soon thereafter as possible. It is going to be so helpful to have Steve there permanently to mediate in the red tape. Some of you have had difficulties dealing across the miles, and across the language barrier which is not always easy, but everything will improve as we become more acclimatized, and attuned to the new world we have plunged into.

Vicky and I are excited, hugely optimistic, and can’t wait to get going in October.

Love to you all, and thanks for your interest.

Guy.

P.S. I am constantly trying to finesse the mailing list. I don’t want to send anyone unwanted mail, but I don’t want to leave anyone off who may be interested. Generally if I don’t hear from you for a while I take it that you do not want to continue to receive updates and will eventually stop mailing you. But you can also send me a reply saying “please stop”.

(Some of this I have spoken of in previous letters)

NOVEMBER 2002 – 3 au 7 – Congres Gartner – ITXPO – (6 000)- MAPIC – Marche International des Professionnels de l’Implantation Commerciale et de la Distribution – (5 600)- 28 au 30 – Congres Medical – (650)

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