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Pepper ClubThe Hottest Address in Cape Town
The InvestmentConsists of:• An apartment (Sectional Title Ownership)• A furniture pack by a leading hotel designer, • A rental pool operated by experienced hotel
operators
Payment terms
• Apartment & Parking Bay– 20% deposit : 7 days from signature– Balance of purchase price on Transfer
• Note: Investors also purchase a standard furniture pack (not financed by the banks) priced from R180 000
Projected Revenue
• 8.5% for the first year of operation (Mar 2010 to Mar 2011) increasing by 10% pa
Or
• guaranteed 7% pa - for 2 years
Taxation - Allowances • UDZ Allowance – 55% of unit cost – 11% in the first year – then 4.4% for 10 years
• Depreciation Allowance– 20% pa on the cost of the Furniture pack
• Tax Deductable Interest– Interest payable on all funds borrowed to finance the
investment is tax deductable
• Assessed Tax Losses– Tax Losses may be set off against any other taxable income
or may be carried forward to following tax periods
Taxation – Based on R1,4m Investment plus R180 000 Furniture Pack
80% Mortgage
Projected Interest Total Tax Net Rental UDZ Dep. @ 9.5% Allowances
• Year 1 134,300 (154,000) (36,000) (106,400) (296,400)• Year 2 147,730 ( 61,600) (36,000) (103,750) (201,350)• Year 3 162,503 (61,600) (36,000) (99,571) (197,171)• Year 4 178,753 (61,600) (36,000) (93,593) (191,193)• Year 5 196,628 (61,600) (36,000) (85,503) (183,103)
• Total 819,914 (400,400) (180,000) (488,816) (1,069,217)
Total Return – 80% Mortgage Net Capital Total Return on Income Appreciation Return Investment AfterMortgage Interest R R R
• Year 1 27,900 158,000 185,900 40.413% p.a.• Year 2 43,980 173,800 217,780 47.343% p.a.• Year 3 62,932 191,180 254,112 55.242% p.a.• Year 4 85,160 210,298 295,458 64.230% p.a.• Year 5 111,125 231,328 342,453 74.446% p.a.
Average 56.335% p.a.Total 331,097 964,606 1,295,703
INVESTOR – 80% LOAN
• Projected Income, Tax Free to Year 8
• Projected period to repay loan only out of projected income In year 10
30 Days Free Usage
• An Investor may occupy his apartment for 30 days each year, free of rental.
Pepper Club
The Hottest Address in Cape Town
Only the contents of Agreements signed by the parties may be relied upon. All other representations, written or verbal, are not warranted