Sheldon Johnsen and his business partner, Jacques Nagel, are two of TUHF’s most dynamic clients in KwaZulu Natal. With a large property strong portfolio, they’re demonstrating exactly what impact through scale looks like.
Located in Glenwood, Durban, 139 Lena Ahrens is one such property that has made a real impact in its area. Originally it was a maisonette that was being rented out by the room and wasn’t well managed. Neighbours were extremely unhappy and had been complaining about the building for some time.
Sheldon and Jacques saw the potential in the property and developed two maisonettes and a three-storey walk-up apartment block on the stand. “The neighbours were not happy with the way the property was being run before we acquired it, and they were worried we were going to turn it into student accommodation,” Sheldon recalls. “But they’ve approached us since completion to tell us how much happier they are to be living near the property now.”
Built five years ago, 139 Lena Ahrens was one of Sheldon and Jacques’ first projects with TUHF. Sheldon recalls the property came with some big challenges, including a considerably large outstanding rates bill, three-phase power issues and some interesting building challenges.
“This is one of my favourite projects because we learned so much from it,” he says. “No build is ever exactly the same as the last, and on this one we had to install 38 pilings to provide the building with extra support in the soft sand it was standing on.”
Across their portfolio, Sheldon and Jacques focus on providing safe, affordable housing to people who are just starting out. “Our tenants tend to be young people in entry level jobs who have just moved to Durban,” Sheldon says. “So, all our units are bachelor units that can accommodate two people to cater for what this type of tenant needs. We include a kitchenette, shower and toilet, and always use porcelain tiles and granite tops. We also keep a close eye on utilities, as this is important to our tenants and can get out of hand easily if you aren’t careful. Energy-saving geysers and individually billed water and electricity metres are just some of the ways we help our tenants to manage their utilities.”
Sheldon and Jacques believe their success as property entrepreneurs is due to their hands-on approach. “You can’t run it by remote control,” Jacques says. “When you’re investing R7 or 8 million in a property it doesn’t make sense to us to hand that investment over to someone else to run, or to treat it as a side hustle. It’s important to be there and to be involved from the very beginning to make sure the build goes well.
“Once you’ve got tenants moving in, being involved in the running of the property daily means you can address any unforeseen concerns there and then, before they become a problem, and make sure that the property is well maintained and safe,” he continues.
One example of just such an unforeseen concern on Lena Ahrens was the quality of the mobile signal in the area. “When people started working from home at the beginning of the first COVID lockdown, we suddenly had a lot of tenants complaining about the signal being bad,” Sheldon recalls. “We’ve since installed a fibre connection so that our tenants can work from home with good quality internet connections, and it’s certainly helped us to retain tenants.”
Sheldon and Jacques started working with TUHF when the KwaZulu Natal office was very small, and Lusanda Netshitenzhe was still the area manager. “Lusanda came out to have a look at our first-ever property, and we’ve grown our business quite quickly since then.”
They have done several projects with TUHF and learned a lot. “When you build,” Sheldon says, “you should always expect the unexpected. One of the things we’ve found most helpful working with TUHF is that they have a lot of experience so they can help to identify potential challenges early on. They have extensive checklists to help you evaluate all the possible issues with a project, and even though it can seem like a lot of paperwork upfront, you see the value when you start the work.”
“TUHF has also always been good about not letting us overstretch ourselves,” he continues. “They provide an amazing support structure and pre-empt things that we wouldn’t have thought of. They’re great to work with, especially if you’re just starting out in the affordable housing space. They hold your hand the whole way through and help you ensure that you have good governance in place throughout the project.”
“One of the reasons that Sheldon and Jacques have been so successful in their property journey is that they not only have skin in the game; they also have heart,” says Sabir Yusuf, portfolio manager at TUHF. “They are extremely hands on and they do a lot of walking, literally, along the streets of the areas they are interested in to find properties with good potential.”
Sheldon and Jacques can boast 98-99% occupancy rates in their buildings. Sabir believes this is because of the heart they put into their business.
“We have full time cleaners and gardeners at each property,” Sheldon says. “We make sure that, if one of our tenants reports an issue, we’re there within an hour to attend to it. We do other little things as well, like making all our bathrooms wet rooms. This makes it easier for tenants to clean, which they love. And we make sure to provide good security, with burglar bars and gates even on third-floor units, which is important to ensure people feel safe in their homes.”
“Putting this extra care into the properties helps to build good relationships with tenants,” Jacques agrees. “It lets them know you’re invested, that you care about their living standards, and creates loyalty between you.”
Asked for their advice for aspiring property entrepreneurs, Sheldon says: “It’s a full-time position. Don’t go into it as a side hustle or a hobby. And it’s not for everyone, so think carefully before you commit. You will be dealing with sticky situations and doing a lot of problem solving, so speak to someone who is already in the game – like TUHF – to make sure it’s really for you. If you decide it is, stay hands on every day.”