‘Real’ Investments

‘Real’ Investments


The Investors

Ivor Jones joined Dun & Bradstreet (D&B) in 1972 as a sales rep. Within two years he had taken over as sales manager and would later be instrumental in taking the business-to-business division from near bankruptcy to the second most profitable D&B subsidiary in the world. In 1982 he started his own company, KreditInform. Within two decades Jones grew KreditInform into a worldwide leader and innovator in credit management solutions that was debt free. He sold the company to Experian in 2008. Today he is actively involved in the companies he has invested in and is concentrating on growing the Jones family trust. “I had phenomenal returns on the sale of my business, but that success took a lifetime to build and then realise. Today I concentrate on growing that wealth through smart investment decisions,” he says.

Dean Jones, who studied a BCom, was exposed to property from an early age because of his father’s investments. His vision was slightly different however. He convinced Ivor that high-end property is not only a safe investment, but that it pays excellent dividends as well. Simply convincing his father to invest in his venture was not enough. Before the trust invests in a business all trustees must be in agreement. So Dean created a company and started researching the high-end property market. As with any other funding pitch he needed to put together a well-researched business plan before securing finance.

Why high-end property?

“The high-end market is safe,” explains Dean. “Higher-income spenders are a growing market in South Africa, and it’s less dependant on bonds.

We made a 45% return on the first house we built and sold. The market was euphoric, and realistically we won’t make that kind of return again, but, if you have the capital to invest in this space, the rate of return in high-end residential property is substantial.”

Do you simply buy and sell houses?

“Not at all. We buy properties, subdivide them, and then build residential homes on them. Properties in established areas tend to be large enough to accommodate two or three stately homes. We currently have two houses in Atholl that are 1 300 m2 and were built on a sub-divided property.

“Building from scratch also allows us to be modern and open-plan in our designs, which follows today’s trends.”

How involved are you in building the houses?

“Very. The value of residential property in this space is to ensure that the home is worth the high-end. No corners can be cut while building it, and no expense spared. Finishings are extremely important, as is the overall design of the house.

“High-end buyers know exactly what they are looking for, and in this market reputation is everything. We need to be known as uncompromising on quality.”

Would you ever subcontract the work?

“You can subcontract, but it’s important to know exactly what is happening at every stage of development. Make sure no corners are cut, and that you know exactly what is happening with your property. Find a reputable architect and contractor, check their references, and be prepared to pay as much as you can afford. Quality will always stand the test of time, so get it right the first time round. The saying, measure twice, cut once applies here: go for the best the first time round and you won’t need to fix mistakes – and in construction, especially architectural design, mistakes can be costly.”

Nadine Todd
Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.