Landlords Earn Bread and Butter from Students and Room-Mates

Private Property South Africa
Anna-Marie Smith

By mid December, Cape Town is abuzz with landlords gearing up for another peak season. Since most applicants to tertiary institutions are now in receipt of acceptance letters, and others of their results, the word is out as to who arrives, remains or departs.

For those parents and students trying to secure leases before the year comes to a close, the biggest question is where, with whom and at what price. The months of December, January and February is when the race is on for agents and landlords, all competing for a share in the competitive student rental accommodation market.

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The massive exodus from student villages a week or two after results are published is also when rental premises are vacated after rental contracts of 10 to 11 months come to an end. Some landlords say they welcome the quiet before the storm, affording them a month to organize the new intake, do maintenance, spring cleaning, changing of locks, and granting annual staff leave before January. Depending on their locations, others take advantage of lucrative short term rental incomes paid by holiday makers from upcountry, and travelling students from abroad.

On average, parents of full paying tertiary students who live away from home, say they fork out anything from R80 000 to around R100 000 per annum, to cover tertiary fees, study material, housing, food and transport. Approximately thirty percent of that goes to accommodation, with a strong preference for shared monthly rentals, on average priced from R2000 to R3000 for quality rooms in houses, apartments or complexes. Alternative options of all inclusive facilities at university residences account for only a small percentage of students with high academic achievements, generous budgets, or bursaries.

Popular areas for student accommodation stretch from the inner city towards the southern suburbs in Woodstock, Observatory, Mowbray, Rondebosch, and Newlands. Shared rental costs in central locations vary, such as a three bedroom, one bathroom house with garage for the total of R6500, a two bedroom flat for R6 000, and a three bedroom apartment with two bathrooms for R9 600. Slightly reduced rentals are available in the northern areas of Bellville, Durbanville and Tyger Valley, close to CAPUT and UCT Medical Faculty.

Central Stellenbosch offers shared rentals ranging from R3000 to R3 500 excluding electricity, for one bedroom in an apartment, usually with two bathrooms. A one bedroom ground floor unit with bathroom, kitchen and parking in a security complex, measuring 52m2 has a monthly rental tag for 2013 of R4 500. Costs of sharing secure suburban houses with four to five bedrooms, some with swimming pool and gardens varies depending on locations, can range from R11 800 to R14 700 per month.

An increasingly popular buy-to-let investment option among landlords is to offer affordable semi-serviced rental facilities, in locations just off high demand areas, but close to public transport. PMP Projects in Cape Town offer shared semi serviced student accommodation in five houses in Observatory, located within close proximity of tertiary institutions. Fees for 2013 here range from R2 400 to R3 000 per month, for furnished bedrooms, shared bathrooms and garden access. Owner manager Peter Muller says, buy-to-let student accommodation in high demand areas offer landlords a dual purpose business model, where rentals generate short term income, while long term property investments generate capital growth.

Another option is old fashioned boarding house rentals, comprising furnished rooms, home cooked meals and laundry services in a private residence, available from R4000 in areas such as Harfield Village in Claremont. This choice of student accommodation shows popularity among foreign exchange and scholarship students, whose families secure rentals through international referring systems.

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