Estate Living September 2016 Digital Issue | Page 10

STUDENT
In the UK, student housing construction projects have increased
by 26%, with 4 500 new construction permits issued in 2015.
According to Axiometrics Inc., 2016 is proving to be a lucrative year
for student housing investors in the US, where student enrolment
is projected to reach 200 000. With only 45 000 beds earmarked
for development, property investors are standing in line to take
advantage of the development opportunities in this sector.

accommodation

When reviewing the value of your investment, it is a good idea
to think ahead. Just because property may be well marketed,
located near a university and sold as student accommodation,
this does not mean that it’s a good investment. There is still a
need to ensure that there is resale value and a good cash flow
opportunity. Calculations of the financial benefits of a property
investment rental must take yields into consideration. The yield
is worked out like this: total annual rental received, less the total
expenses, divided by the cost of the property, multiplied by 100.
In a student catchment area, yields of six to ten percent are
achievable, which are considered high and a sound return on an
investment.
Student apartments are currently an excellent buy-to-let option
and are rented at a premium. It has been noted that rentals close
to the University of Cape Town can start at R 4 800 per month
for a bachelor flat and go as high as R 21 000 per month for a
modern three-bedroomed apartment. Rentals for a one-bedroom
flat in Pretoria close to Tukkies start at R 5 000 per month. You
are almost guaranteed recurring rent for two or three years while
students complete their studies.

investment

STUDENT