Now’s the right time to buy student flats

For investors planning to get into the student accommodation market, timing and understanding what factors drive the market are the keys to building up a successful portfolio.

A two-bedroom, two-bathroom student flat in this complex was recently sold by Harcourts Capital for R1,4m.

So says Soti Christodoulou, the Harcourts Capital area specialist for Hatfield and Hillcrest, which are Pretoria’s most sought-after suburbs for student accommodation.

“For example, there is always a scramble for student units between October and the beginning of the academic year in February, but sellers know this so that is usually also when they push up their prices, hoping to make more of a profit.
“Consequently, we recommend that parents who are planning to buy a single student flat for their children to use should start looking at properties long before they need them – and if necessary let them out until they are ready to use them. We have in fact seen parents purchasing one- or two-bedroom sectional title units five or six years before their first child goes to university and renting them out in the interim.”
And now is the best time of the year for investors to get into the market as sellers are more reasonable, she says.
As for new student unit developments, these are currently selling for between R18 000/sqm and R23 000/sqm, depending on their proximity to the University of Pretoria campus and Gautrain station in Hatfield,and those who buy a 40sqm, one-bedroom unit in this area for around R900 000 can expect a rental of R6500 to R7000 a month,” Christodoulou says.
“However, not all students want to live that close to campus. Some prefer to be on the eastern side of Jan Shoba(Duncan) Street, which is a short walk to the sports grounds or main campus. And student units in this area and in Hillcrest are often better value for money.
“Our recent sales, for example, include a two-bedroom, two-bathroom unit of 62sqm in The Circuits complex in Prospect Street east of Jan Shoba that was priced at R1,4m, including a double carport. (See photo). We recently also sold a two-bedroom, one-bathroom, on carport unit of 58sqm in the Lunnon Crest complex for R1,38m.”
Meanwhile for serious investors in this sector, Christodoulou is currently marketing a whole student complex, consisting of five furnished full-title houses on one property that have already been converted to communal accommodation. These houses are priced at R2,6m each, and attract rentals of R18 500 a month per house.

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