The almost unprecedented increases in rent now being achieved in Cape Town’s Rondebosch, Claremont and Newlands suburbs became more evident than ever over the November to February period, says Tony van der Lith, Rawson Properties Newlands franchisee (his franchise handles rentals in the Newlands, Claremont and Rondebosch areas).
Demand for “almost any” accommodation in these suburbs, said van der Lith, is driven by the annual influx of UCT and other tertiary education students looking for a base close to their campuses at the beginning of each year.
“In December, January and February,” he said, “we could rent at least 100 more units than we have – and I am told that the situation is much the same with other estate agencies. By March business tends to return to normal, although there is always a tendency for people to upgrade after March. Once they have settled and formed alliances, they begin to want larger premises. Post graduate students, in particular, while still wanting to be near UCT, tend to leave the student environment and look for accommodation in a more mature area.
Particularly successful on the rental front, said van der Lith, are the three well priced developments recently completed by Rawson Developers: River’s Edge, Rondebosch Oaks and The Rondebosch, all of which are now fully let – as are a large number of other well placed units.
“In Rondebosch Oaks we are now getting R4,500 to R4,800 per month for the smallest 25 m2 bachelor units and anything up to R11,500 per month for a two bedroom, 64 m2 unit. Only two years ago such rentals would have seemed totally unachievable.”
Due to the fact that the bulk of the tenants in these, and similar, properties are students, said van der Lith, his franchise tries to ensure that all leases run from the 1st of January or the 1st of February for at least 12 months. This, he said, can cause problems when, as often happens, students go home in December and then resent having to pay rent while on holiday. This is, however, essential for any landlord renting in the “academic belt”.
“Late matric results and consequent late acceptance into tertiary education institutions,” said van der Lith, “can create panic amongst parents who now have to find accommodation for their child. On the other hand, many students are not accepted into their university of choice and this too creates a wave of parents wishing to get out of their leases. Fortunately, because of the Rawson Property Group’s reputation in managing these properties, we can usually re-let these properties without too much of a loss to the parents.”
“In order to protect the landlord,” he added, “we usually insist that the parents of the students be the lessees with the student as the occupier.”
“A bachelor flat in a university-run complex can cost R48,800 per year without meals. This is closely comparable to the annual rental paid in some of the units we manage for private landlord investors.”
Good tenant management, he said, is essential if landlords and especially buy-to-let clients, are to remain satisfied.
“At present, the simple truth is that landlords in these areas have good reason to be highly satisfied with their returns and the management of their investment.”
Asked to define the one factor which, perhaps above all, makes a rented unit attractive to those sponsoring students during their study years, van der Lith said that a high level of security is essential. Also important is the good management of the property, something which he takes very seriously.