New student accommodation that has become available in the Grahamstown market has opened up some buying opportunities for parents and buy-to-let investors.
“The current buyers’ market offers investors a wide choice of property and good opportunities for price negotiation,” says Aidan Sparrow of the local RealNet franchise, “and investors who do their homework may well find bargains.
He adds that new stock coming to market in the past five to six years has been supplemented by Rhodes University’s expansion of student residences in a drive to create accommodation on campus for all first year students. In spite of the new additions, however, the annual intake of first year students still exceeds the available spaces and many late applicants have to find accommodation in town.
The majority of second and third-year students also live off-campus, so there is always demand for student rooms and flats.
Monthly rentals for off-campus rooms now average R2500, yielding solid returns for landlords who can buy two- or three-bedroom apartments for between R850 000 and about R1m.
Meanwhile houses with several bedrooms are currently selling for between R1m and R1,6m and rooms in these can achieve monthly rentals of up to R3000, depending on the facilities on offer.
Sparrow says many parents find it financially beneficial to purchase a home or flat, rather than renting, for the three or four years that their child is studying. “They can then rent out any extra rooms to subsidise the cost, or keep them for their own usage when visiting Grahamstown for the Arts Festival or Rhodes events. And they can sell the properties, usually for a significantly higher price than they paid – once the student has graduated.”
And he advises parents whose children will be attending Rhodes in a few years’ time to make use of the current opportunities to invest in student units “as they will benefit in the interim from competitive property prices and rentals that already cover a large part of their bond.”
As for other property available in Grahamstown, Sparrow says, Victorian homes in the older part of town are currently selling at prices from around R1,6m to R3m, and are popular among professionals and university staff. These homes offer between three and five bedrooms and stand sizes are generous, while some also have flats attached.