The demand for student accommodation in South Africa is skyrocketing. Universities are only able to accommodate around 20% of those applying for student housing in residences and the student population is only increasing. Universities often do not have enough funds or space to provide housing for them. This is why there’s a massive demand in the private sector for affordable and safe student accommodation.
The most common types of student accommodation
What makes student accommodation different than normal housing? Well, actually nothing really. What you do need to consider is that you’re marketing to a different demographic. That being said, there are certain dwellings that work well for student accommodation:
Hall of residence
Some of these are owned by the universities themselves, but there are privately-owned halls available. These halls are preferred by most students because of their proximity to the university. The one stress that most students have – especially those who live out of town – is that once they find accommodation is the daily commute. This could be costly, so if students can find a place to stay that is literally on campus, the better.
Approach the university to discuss the possibility of investing in a student hall. If there is a building you can use (and is safe), then you can start negotiations to purchase.
Something as simple as residential property could also be used as student accommodation. Think of investing in a three-bedroom house and renting this out to students. Again, if you are looking into using a house, make sure the property is located close to the university and other amenities.
Students are also looking for a space to break away from studying. The property should be close to a park, a mall, or a restaurant.
Not all students are the same and there are a few that prefer solitude – it helps them to focus. Apartments offer them the privacy they crave and the fact that they don’t have to share responsibilities with other housemates.
Using the buy-to-rent strategy, invest in an apartment that is, again, close to the university and other amenities. If you’re looking for the ideal investment property, consider the demographic you’re renting out to. Your tenant is a student and won’t have much of an income. Try purchasing a bachelor flat or something simple. However, make sure the apartment is ‘livable’.
What students are looking for in an ideal accommodation
Students are no different than any other tenant you’ll be renting to: they want a decent place to eat and sleep. The problem is that when people think of investing in student accommodation, they assume they should do the bare minimum. This is not the case and you need to treat all tenants equally. These are the things most students look for when they’re searching for housing:
If a student is moving from Cape Town to Johannesburg to study, they’ll be looking for housing that is quite close to the university. If they’re new to the area, location is important because they’re unfamiliar with the suburb.
If students will be doing the commute each day, it needs to be close to various transport options. A perfect example of this is Rosebank in Cape Town. The neighbourhood is a student hub for those attending the University of Cape Town. It offers favourable transport route if students need to get into the city centre – it’s also within walking distance to the campus.
Value for money
Students are on a tight budget. Most will have bursaries that may help them out with a housing allowance. Some may have the help of their parents but others will work part-time to ensure they have money for rent. However, just because they’re on a budget, doesn’t mean they’ll take any accommodation.
Students do care about the state of the property because they’ll be spending all hours of the day in the house. They’re looking for a place that is well-maintained and has just enough space for them to feel comfortable. It’s unfair to expect an exorbitant rental fee when the place is in disarray.
Is it safe?
Students who are relocating to a new city have one concern when it comes to accommodation: their safety. Depending on class schedule, students could be walking (or commuting) to and from the university. If this happens, their safety is the most important aspect if they’re walking to their home – especially at night.
If you are investing in student accommodation, then you need to determine the crime rate in the area. If the criminal activity in the area is high, you’ll have a problem finding tenants to fill the property.
Variety of activity
Invest in student accommodation that is surrounded by a hive of activity. This means finding an area that has a rampant student community. Why is this important? It provides the students to connect with like-minded individuals. Having a community like this will help students settle in easier and make them feel right at home.
Students need a space to break away from the rigorous campus life. With student activity available, your tenants will have the chance to de-stress and create a student haven within the neighbourhood.
While an active social life is an important aspect of a university student’s life, having a quiet space to study is equally vital. During exam time, students need to find a place of solitude to help them along.
What does this mean? Ensuring your property is located in a quiet (but safe) neighbourhood. Also, take a look at the surrounding houses to your property – are you next to noisy neighbours? While students are looking for some hive of activity in the area, they don’t want to live in a neighbourhood that is not as chaotic.
What to consider before investing
If you’re interested in investing in student accommodation, there are a few things you need to consider before finding the ideal property:
Finding the best place to invest
The first thing you need to consider when investing in student accommodation is the location. Proximity to campus is, of course, one of the most important aspects of this but most students claim that as long as they have ready access to affordable transport they are prepared to live further away.
Another thing to consider is the proximity to shopping centres and entertainment. It’s important because many students don’t have cars or want to save petrol as much as possible.
Think outside the box
Many investors are working to rejuvenate areas, particularly in Johannesburg’s once avoided inner city near the WITS campus. Offices and warehouses are turning into stylish, affordable and safe student apartments. It’s a great idea to invest in a developing area such as Joburg’s Braamfontein as you are more likely to be able to buy low and sell high.
These newer developments also often have the amenities that students look for such as secure parking, 24-hour security, pools, recreation areas, and WiFi. However, investing in an older building in a good neighbourhood does give you the option to renovate the property and increase its value when you are done renting and are prepared to sell. You will also have to worry less about students damaging new appliances and furniture.
Get a rental agent
Renting to students can be a challenge. It’s often far more challenging than renting to young professionals or families. Make sure that your property never stands empty and you always have a steady flow of rental income.
We suggest hiring a renting agent to handle everything for you. They’re the experts who will understand the challenges of renting to students and know how to handle them. They’ll know what to look for in a tenant and handle renting out, inspecting and maintaining the property.
Student accommodation is the only buy-to-let market that guarantees results. If you find the right area, hire the right agent and make smart investments you can become a part of South Africa’s most lucrative rental market.
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