Real Estate Investor Magazine South Africa December - January 2014 | Page 31

important to make sure that properties include
designated parking as the area around the
University of Pretoria has extremely little
parking available.
Seeff Potchefstroom MD, Paul Kruger, says
like in Stellenbosch and Pretoria, the biggest
demand in this town is also for two bedroom
and two bathroom apartments. “If you invest
in a student property your rent will typically be
significantly higher in comparison to other buyto-let markets in Potchefstoom and as a result
your mortgage can be paid off much faster.
“Potchefstroom is a solid and sustainable
market to invest in as research shows that
student numbers are set to raise in coming
years. In the past six years rental income has
increased on average between 6% and 10% in
the student accommodation property sector.
On a whole the student property market
has continued to be one of the most resilient
investment sectors in South Africa during
the economic downturn, since most rental
incomes and property values remained stable or
increased. Capital growth in the last six years
has been 8% per year on average.’’
K r uger continues to say that st udent
properties within walking distance of campus
cost between R14 000 and R18 000 per square
metre on average or as high as R20 000 per
square metre when only a stone’s throw from
campus. Rental income for a bachelor f lat is
around R3000 per month, while it is around
R4000 for a one bedroom apartment and
R6500 for a two bedroom apartment.
“Many developers are entering the student
accommodation sector and this may create
an oversupply. The accommodation affected
are mostly units further than 1 km from
campus and that is why location is a very
important consideration when you decide
to enter the market. Potchefstoom has three
new developments (12-on-Tom, Hoffman’s
View and Baccalaureus) that all offer good
opportunities to prospective investors,” Kruger
concludes.
Ma r t ine Hey ma ns, Seef f agent in
Bloemfontein, says student houses, especially
one and two bedroom apartments in Universitas
and Langenhovenpa rk a re a ver y good
investment since they are extremely high in
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demand. “Once students get
to their third or fourth year
of studies they prefer to move
from residences to cottages
or townhouses that are more
private, but still within walking
distance from campus.”
From the above and judging
from what agents across the
board are say ing the most
important considerations to
keep in mind before investing
i n t he st udent ma rk et is
proximity of the property to
campus, security, parking, price
and avoiding the risk of landing
w it h a n empt y apa r tment
because of over-investing.
Finishing, running costs, how
long you are planning to hold
on to the property and what the
possibilities for upgrading are,
are also important.
R enov at i ng c a n be ver y
beneficial when you decide to
convert a bigger, usually older
property from a one bedroom
to a two bedroom, or a two
bedroom to a three bedroom,
giving you an extra monthly
income. An extra bedroom
should also increase the value
immediately, if done properly.
“But make sure that you are
allowed to do so and determine
the costs. Also consider parking
when converting, the lack of
allocated parking bays could be
a drawback when selling,” says
Becker.
W hen buy ing a proper t y
important factors such as bond
costs, levies, rates and taxes,
maintenance and management
fees must also at all times be
taken into consideration. This
should be weighed against your
monthly return.

RESOURCES
Seeff