What you should know about student accommodation

Regional director and CEO of RE/MAX of Southern Africa Adrian Goslett, explained that “while student accommodation does offer investors a low-risk option in terms of the possibility of prolonged vacancies, this type of rental income does pose other risks, such as short-notice lease terminations and the possibility for neglect and damage to the property.”

Responding to whether student accommodation was a smart investment option or a high-risk purchase, Grand Gavin, broker/owner of RE/MAX Panache, said investing in student accommodation is a clever choice, however, the necessary precautions need to be followed to safeguard the investment value of the property.

“Seeing as there is generally a high demand for student accommodation compared to the supply provided by tertiary institutions, investing in these kinds of properties is recommendable,” explains Gavin. Student units are usually rented out per room, which may result in a higher rental return for the landlord, he says.” Since students require ease of access to campus as a priority, they are often less demanding with regards to other physical aspects of the property. Students are therefore happy to share common areas such as lounges, kitchens and entertainment areas provided the rent is affordable and the property is within easy access to campus,” Gavin adds.

However, due to the fact that students generally don’t prioritise the physical aspects of a property, there is also a great chance that they won’t maintain the building, says Gavin. To ensure the property is well taken care of, a number of student accommodation landlords even go the route of employing a house manager who regularly makes a stop at the property and is there to help the students if there are any cracks.