Business for Sale

Established Guest House with huge potential

  • Listing #GBB121
    LocationMpumalanga
    Selling PriceR 3,950,000
    Annual SalesR 500,000
    SDER 103,000
    ROI2.60%
    IndustryAccommodation & Tourism

Business Description

This listing offers an amazing well-established guest house in a magnificent double story house built nearly 70 years ago. Featuring original wooden floors and staircase and still with the original fire place, all providing much old charm.

The guest house is situated in a major Mpumalanga town. The guest house is in a quite suburb but within close proximity of major shopping centres and businesses. Other nearby features is a casino and dam.The premises have large trees providing a relaxing and home atmosphere, together with the pool and Lapa/Braai areas.

Accommodation is offered in various sized fully furnished bedrooms with en-suites in the form of thirteen big or smaller rooms complete with 10 channel DSTV, tea/coffee facilities, desk with chair and fridges in some of the rooms. There is also a fully self catering flat. Laundry services are also being offered.

The venue can also offer smaller six conference facilities. The guest house has a 3 Star by Tourism South Africa.

The reason for selling is that the owners relocated to Pretoria.

The business has done very well over the years but for the last 3 years revenues have dropped due to around R25,000 profit per month as the owners are no longer able to secure big contracts anymore from surrounding corporate and SOE’s due to BBBEE. However, the business still offers great potential for an owner with the right criteria and connections to restore it to the previous profitability with sufficient occupancy levels, etc. Historical average EBPITD profits (Earnings before Proprietor compensation, interest and tax) have been between R96,000 and R112,000 per month with a potential ROI of 31.3% compared to the offered price. There is also the added benefit of capital growth on the unique property. The real potential is there to restore the previously attained profit levels in this large and growing town.

The price of R3,950m include the property (land and buildings), furnishings for 13 bed rooms with en-suites, dining room, fire place area, fully fitted kitchen, outside pool and braai area, safe paved parking for +- 25 cars on the premises, of which under cover (+- 6 to 7 cars). Established website domain also included. There are two water tanks (5000l and 2500l) with a motor for water interruptions, as well as a 3 phase generator with a manual switchover installed.

The property can also merely be used for ordinary residential property and stay. At the offered price of R3,950m the price is regarded as a mere asset sale
Full financials and detailed asset list is available for serious buyers.