Student housing: Should you consider smaller cities?
Serious property investors often own a property or two close to some of the country’s best universities. While it might be easy to justify buying a property in Johannesburg, Pretoria or Cape Town, potential investors might wonder how places like Bloemfontein, Grahamstown and Potchefstroom compare to their counterparts where property for rent in South Africa are concerned.
In order to answer this question, it is important to consider the number of students that would generally be looking for student accommodation in any given year. It is also important to consider the supply of student housing available.
Generally, universities aren’t able to provide student accommodation to all registered students. The opportunity for private investors to fill this gap is therefore readily available.
But before you start buying property for this purpose, do your homework. What is the market valuation of property for rent in the specific area? Will you be able to cover a considerable amount of your monthly bond repayment with the rent? Is the property close to campus? Is the area safe? Is there a lack of accommodation in the area? Who currently lives in the area – younger or older people?