Investing in private student accommodation

With the significant shortage of available student accommodation at tertiary education facilities, many parents are looking for private housing options close to where their children plan to study.

“Top of mind is the decision of whether to buy or rent and weighing up the advantages and disadvantages of both,” says Misty Kesting, an estate agent at Knight Frank Residential South Africa in the Claremont, Rondebosch, Rosebank and Newlands areas.

“The benefits of buying a property are that you will be making an investment and not spending money on rent. On the other hand, renting means there are no transfer fees, property maintenance costs and mortgage instalments. However, if you can afford it, it is worthwhile to consider buying a property that in the long run can earn you money as well as having a permanent place for your child to occupy for as long as needed.”

Apartments where children can possibly live with their friends for a few years are popular choices for parents, however safety concerns are often a priority.

“Parents in Durban and Johannesburg are very safety conscious and usually look at blocks with 24-hour security and these typically have higher levies,” Kesting says.

“Other options are the older, 50s-style blocks and art-deco complexes – their levies are usually lower, but they don’t necessarily have premium security.”

She says some of the most desirable areas for student accommodation in Cape Town are Rondebosch, Newlands, Rosebank, Mowbray and Claremont, as they are served by the Jammie Shuttle – UCT’s dedicated transport system. These suburbs are followed closely by Observatory and the City Bowl, due to their proximity to public transport, universities and colleges.

Kesting says that parents buying sectional title apartments need to be aware of several important documents relating to the complex. These include the latest annual general minutes, conduct rules of the scheme and any financial statements.

“Keep in mind that you are not just buying a unit – you are also buying into a sectional title scheme. Don’t get lost in the excitement of buying an apartment, ensure that you are well informed about the property and the scheme.”

She parents should start looking at options long before their children are ready to leave home for university.

“Consider looking a year in advance. Sellers become highly competitive and increase prices from as early late October and the trend continues through to February. Many parents are already buying properties and rent them out while their children are still at school. If their children don’t move into the property, the owners can still earn money by renting it out,” says Kesting.

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