GREAT BUSINESS OPPORTUNITY!!!! 9.4% NET ANNUAL RETURN!!! $499,000
Sabana lies just to the west of San Jose centro and is most famous for being known as containing the "Central Park" of San Jose. Sabana Park was once the site of the airport for San Jose and the area is considered an upscale barrio of the metropolitan area. Within the area are numerous office buildings, ICE National offices, the Office Centro, where many sport book operations are headquartered, numerous upscale restaurants, at least one car dealership, new high rise condos, hotels and numerous houses and apartments in the neighborhood. It holds a very high perceived value in the city and just looking at the skyline and the several cranes constructing new high rise towers confirms that the neighborhood is considered an up and rising one. Over the past two years, the crown jewel of the entire country has been the construction of the new National Stadium located on the west edge of Sabana Park, and it is scheduled to open in early 2011.
The actual location of the apartment building FOR SALE is 200 meters south of POPS ice cream store, and then 100 meters west. In lies in the southwest area of Sabana. The building for sale is the last building on this street, the only four story building in the proximity and it is surrounded on three sides by nothing more than green areas. To the west is a green grass pasture and trees, to the north is a very large green grass pasture that runs all the way to the Escazu road and to the south is an empty lot that is destined to be a park which runs all the way down to the Anono River. The east side of the building adjoins an existing house.
Commonly, cows are viewed grazing in this pasture which add to the "country setting in the city", the ambiance and the quiet, undisturbed nature of this choice building location. To have this unique setting of being located in the center of the major metropolitan center of the county, and yet to be able to offer to tenants reasonably priced living quarters not spoiled by noisy congested honking cars and loud smelly diesel buses adds significantly to the desirability of the rental units. It is both enjoyable and productive to run ads that include a header that states…"PEACEFUL, QUIET, CLEAN & GREEN".
In a city that has become somewhat infamous over the past several years for it's large amount of petty crime, it is again both nice and valuable to be able to offer rental units in a relatively safe, and crime free part of the city. Yes, one can unequivocally state that this property has one of those rarest of real estate values: location…location…location.
Tenants come from a wide variety of fields, backgrounds and ages. As the Office Centro is so close and it houses so many sports books, I usually have several tenants working in that profession, and currently have at least three employed there.
A German resident originally constructed the building, in typical German engineering fashion, in 1998. His original intent was to provide housing for students at the University of Costa Rica Medical University, which is a short two to three block distance away. To the best of my knowledge, no student from this university has ever resided in the apartment building.
On the lower level is one apartment, the storage space and the secure parking for cars. Originally, the entire first floor was nothing but parking and contained spots for 12 cars. The original owner notice one day, out of the 12 spots reserved for cars there was only one being utilized, and that was by a tenant who owned a motorized wheel chair. It was at that time he decided to construct the storage and the thirteenth apartment.
Construction is by concrete and cinder block with metal studs and sheet rock being utilized in the rooms. The building is four stories tall and apartments to the north are staggered half a floor higher from the apartments to the south. Access is via a central stairway which has a landing on every half floor to accommodate access to the apartments on the north side. The architect wisely designed an open central area on each side of the building. These areas provide access to all plumbing, electrical lines, and inter-net, phone and TV cables. They also provide ready areas of air circulation, constantly fed by nature's method of moving air through convection currents. Heat rises and cool air sinks, the open area is connected and vented to all the baths to supply a constant source of moving air. This is very helpful in very humid areas like San Jose in the rainy season.
Each bath room contains a shut-off water valve that can shut off the water supply to that particular apartment. There is a community washer and dry located on the landing below the stairway and there is also a water valve for that area as well. In front of the building is the main water shut-off valve for the entire building. Two electrical panels provide electricity to the building and telephone and cable installations are also existing.
The building contains service to a 2Mbps internet server through Amnet and then a wireless router provides wireless service to all the apartments. Each apartment is wired for it's own phone line, cable for included TV's and every apartment contains intercom service to the outside walk-in door. There is also a new metal garage door operated by an electric opener which can be activated by remote controls in individual cars. The building and parking area are totally secured and safe.
Currently, there is ample room in the back of the lot to construct at least four or six more apartments above the parking level. The value of this potential should not be overlooked or ignored, as it is typical to construct apartments fairly tightly spaced in Sabana and not out of the norm.
At the current rate apartments are being rented, which includes a couple of tenants that have been around longer than the current owner has owned the building with accompanying very low rental rates, the building is grossing $4,655 per month. Add to that approximately $70 a month in income from the coin operated washing machine revenue and the total monthly gross income amounts to $4725.
Expenses over the past twelve months have totaled $8,023 for the year of 2010. The gross receipts in 2010 were $54,985. Subtracting total expenses of $8,023 leaves a Net Receipts amount of $46,802. Dividing this net amount by the asking price of $499,000 results in a return on investment (ROI) of 9.4% I might add this is the return on a turn-key operation. These are not projections, or pie in the sky numbers, but rather historical factual numbers realized in on-going operations. This rental property is returning a very attractive ROI, is up and running, and it will continue to produce attractive returns with proper management.