The keys to successful investment in student flats

Student apartments can be a great option for property investors – but only if they know which apartments to choose and how to manage their tenants.
So says Andrew Schaefer, MD of national property management company Trafalgar*, who notes: “While off-campus student accommodation is a growing sector all over the world, and proving to be lucrative pick for many investors, it is vital for buyers to understand exactly what sort of units students prefer and are likely to rent from them, or they could end up with some real white elephants.
“We have a large portfolio of different kinds of student accommodation under management in various cities, and from our own research and the results of surveys done in major student centres internationally, we have compiled some guidelines for those who are planning to invest in this niche market.”
Security is the number one concern for both students and their parents or guardians, he says, so it pays to check the safety of the area in which you are planning to buy, as well as the security provisions in the specific complex or building, which should preferably include biometric access control and CCTV monitoring.
“Next, moving to a flat either on their own or with friends is a rite of passage for most students, and an opportunity to prove they can manage their lives and make new friends outside of their family and school environments, so investors should look out for complexes which offer their tenants plenty of opportunities for social interaction with other young residents.
“Properties with a pool, braai facilities and possibly a clubhouse, games room, gym or other recreational facilities like a tennis or volleyball court are always most in demand – and if they also have a shared study space or a computer room so much the better.
“Properties that are wholly or predominantly occupied by students are also more popular than those with a mix of older residents – although we do find that from about third-year onwards, many students start to move out of “student complexes” into ordinary sectional title blocks in search of a quieter environment in which to study.
The third most important attraction for student tenants is connectivity – including fast and preferably wireless Internet connectivity, excellent cell phone signal and DSTV-ready apartments, says Schaefer.
“More than 90 percent of the students we deal with have a smart phone as their main means of communication, and many also use their phones to access the Internet, so they definitely don’t want to be in a complex with poor cellphone signal. In addition, students are always short of data, so a complex that offers access to at least some free wifi per day will rank very highly.
“A DSTV connection in the flat is also a nice-to-have, although not essential, and certainly not nearly as important these days as a high-speed Internet connection, either ADSL or fibre, and a convenient place to put a router so that any computer, laptop or smart phone in the flat can be wirelessly connected.”
When it comes to the layout of the flat, he says, students are surprisingly meticulous about the size of kitchens and bedrooms. “Contrary to the stereotype, most actually cannot afford to live on pizza or other take-away food, so they like a reasonable-size, clean kitchen with enough food preparation and storage space, a stove and room for a normal fridge. This also tends to be important to parents - who may well be the ones paying the rent.   
“In addition, we have found that while students prefer open plan living areas, they also don’t want their bedrooms to be “cubbyholes” or “sleeping pods”. They want these private spaces to be spacious and have lots of cupboard space – especially if they are sharing a flat with one or two others.”
Then finally, Schaefer says, students have definite preferences when it comes to lease administration and property management. “When it comes to rentals, for example, they want to be quoted all-inclusive figure instead of having to pay several separate charges. 
“In addition, they want-easy-to-understand leases and copies of the complex conduct rules written in plain language, and appreciate information about the amenities in the complex as well as the public transport, shops and other amenities in the area.
“Meanwhile, most say they would also much rather deal with a managing agent and/ or an onsite building manager than deal directly with their landlord. The main reason for this is that established management companies like Trafalgar usually have automated (email or online) systems to allow them to log queries or problems at any time of day – which is much easier than having to phone the landlord in the middle of the night.
“Students also trust Trafalgar and other large managing agents much more than individual landlords to keep their deposits safe, and to be fair when the time comes to return those deposits. This is something for prospective investors in student property to bear in mind – along with the fact that you are much less likely to have trouble with defaulting tenants if you engage the services of a qualified and experienced managing agent.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
    • 21 Feb 2018
      These days most buyers are using online property portals like Private Property when house hunting due to the convenience, up to date information and variety on offer. “The property portals have revolutionised the way buyers shop, but they do need to be cautious – viewing photos online is no replacement for viewing the property in person,” says Bruce Swain, CEO of Leapfrog Property Group.
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us