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Great buy-to-let opportunities in Stellenbosch

17 Jul 2015

Stellenbosch is arguably the Western Cape’s most popular student town, famous not only for its excellent university, but its vibrant and cosmopolitan atmosphere, youth-friendly lifestyle, and exquisite natural surrounds.

Stellenbosch is arguably the Western Cape’s most popular student town, famous not only for its excellent university, but its vibrant and cosmopolitan atmosphere, youth-friendly lifestyle, and exquisite natural surrounds, says Hugo.

This is according to Johan Hugo, the Rawson Property Group’s franchisee for Stellenbosch, who says with over 25 000 scholars flocking to the area every year to attend Stellenbosch University, it’s no surprise that student accommodation has become a major influencing factor in the area’s property market.

He says student accommodation in Stellenbosch is always in high demand.

“Only about a third of Stellenbosch students live in the university’s residences, of which there are 24 in total. Most prefer the freedom and independence of private accommodation, whether that’s an apartment, a student house, or a granny flat attached to an established home.”

Areas within walking distance of campus tend to be the most popular for students because parking on campus is always quite scarce, so students prefer to avoid taking their cars to class, he says.

“This trend has had quite an effect on property prices, and accommodation get a lot pricier the closer to campus you get.”

Apart from convenient access to the university, Hugo says he has also noticed a desire for security having a big effect on students’ and parents’ accommodation choices.

This two bedroom, one bathroom flat for sale in Stellenbosch is within walking distance of the campus and close to amenities. The property includes basement parking, and is on the market for R1.35 million - click here to view.

“Ironically, Stellenbosch has one of the lowest crime rates in the country, but for students who are often living away from home for the very first time, feeling secure is of the utmost importance.”

He says this makes apartments quite popular, especially with younger students, but well-secured granny flats and houses also do very well.

“Thankfully, most of the roads leading to campus are patrolled by campus security, so getting to and from class is not a concern.”

According to Hugo, rentals in the area range from R2 500 to R7 000 per room, per month, a pretty hefty expense for any parent to contemplate.

As such, he says he highly recommends that parents consider buying instead of renting, and ideally look at the investment over a longer term rather than just the duration of their child’s education.

“You can buy a really nice two bedroom apartment close to Stellenbosch University campus for between R1 million to 1.5 million,” he says.

“Bond repayments on that would be somewhere between R9 200 to R14 000, which could be offset by renting out the second bedroom to a friend of your child. Your annual return on investment is likely to be around 6%, the current average, and when your child graduates you can continue to rent the property for additional income.”

This two bedroom, two bathroom apartment on the market in Stellenbosch Central is situated in a complex with 24-hour security. The flat includes modern finishes and two parking bays. It is selling for R1.495 million - click here to view.

He says tenants are easy to come by, especially if you’re close to campus, so you could turn your child’s accommodation into a valuable long-term investment, rather than a pure expense.

Of course, many people are wary of renting property to students, and tales of student antics in rented properties are often passed around like fireside horror stories.

Hugo, however, says he believes that this shouldn’t be a concern as long as landlords select a responsible and professional rental agent.

“If things are properly run and the right measures put in place from the start, student tenants are no more difficult or risky than any other,” he says.

“It’s really just a matter of keeping a proper eye on things.”

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