Opportunities await investors able to cash in on demand for student accommodation

Every year about this time estate agents start advising the parents of children who are moving on to university or technikon next year, or, indeed, who are already at these institutions, to consider the advantages of buying an apartment for their offspring rather than paying rent.

“This advice,” says Lanice Steward, MD of Anne Porter Knight Frank, “is wholly valid: if you can afford to buy rather than pay rent, at the end of your child’s studies there is a very good chance that you will be able to sell at a price that not only recovers your full outlay (including the interest charges) but also in many cases will actually cover the full university or technikon costs. Here at Anne Porter Properties we have seen this happen time and again.”

Certain parents, added Steward, have always gone “the whole way” and have bought three or four flats, earning a significant rental income from students who, owing to the shortage of accommodation in the right areas, very often pay between R2,500 and R3,000 per month for a single room.

Nor, added Steward, is this practice entirely confined to the less affluent areas. Upper Claremont, Kenilworth, Chelsea Wynberg, Bishopscourt and even Constantia have all at times had flourishing student communities living cheek-by-jowl in fairly small houses.

Right now, Di Hosty of Anne Porter Properties, is selling three apartments in the Hen and Chicken area of Upper Claremont. These, said Steward, could be ideal student digs for those students with a little more spending power than most.

The apartments, which are all linked and have balconies and private patios, have two single bedrooms on the ground floor, both linked to living rooms with a kitchenette, while the duplex unit on the upper floor has one bedroom, a large dining room, as well as such features as a dressing room and a counter top eating area. All the kitchens are fully equipped and in some cases have Bosch ovens, hobs and extractors.

“At R4,9 million this must represent a good buy,” said Steward, “because the combined monthly rental of four students living here could be in the region of R20,000 per month, i.e. some R240,000 per annum. If you set this against the R40,000 plus that you might be paying on the bond and allow for 10% capital appreciation on the property, you will understand that there is the potential here for a good investment.”

Article from: www.anneporter.co.za