Recently renovated student accommodation offers excellent returns

In property circles, says Tanya Jovanovski, Rawson Auctions co-franchisee for the Western Cape, it is now widely accepted that very few investments give a better return than those which are tenanted by students – and, she says, it is for this reason that her latest offering, scheduled to be auctioned on Wednesday 24th July at 12 noon at the Rawson Property Group’s head office (222 Main Road, Rondebosch), is already attracting considerable attention.

Sited at 5A Junction Road, Salt River, the three storey building is only 3,5 km from UCT. It is divided into 21 one bedroom student apartments (some of which however have double beds) and all of which are let fully furnished. Occupants share seven shower areas and a fully equipped central kitchen with gas hobs. They also have the full use of a computer room equipped with PCs and all the rooms throughout the complex are linked to a broadband hotspot system. In addition, all residents have the use of a laundry which has a coin operated Speed Queen washing machine and a comfortable lounge and TV viewing area with DSTV.

All except for one of the 21 rooms are tenanted, the 21st room being kept for day lets and as a show room.

The building, says Jovanovski, can produce a rental of R835,000 per annum and a net income, after deductions for all expenses of R405,000. In view of these figures, bidding, she says, is likely to begin at around R4 million.

“Both the residential sales and the developments of the Rawson Property Group,” says Jovanovski, “have already shown that student accommodation can be highly profitable to investors. I firmly believe that this latest offering will be as good a buy in the student accommodation field as has ever yet been made available to the general public.”

Rawson Auctions do not charge a bidder’s registration fee, but they expect a 10% auctioneer’s commission and 5% of the sales price to be paid on the fall of the hammer.

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