Although the real estate market is experiencing unprecedented pressure due to the economic crisis, the demand for rental properties is at an all-time high. Those in the know postulate that this is mainly due to the fact that many people are battling to secure a financing for a mortgage, which leaves them with only one option, namely rental. Student housing is showing particular promise. Universities' budgets are stretched and therefore the option of building supplementary student housing is no longer viable - leaving students to rely on the public sector for accommodation.
Property in Johannesburg is in great demand, as are properties in Pretoria, Witwatersrand and Potchefstoom. The closer your property is to campus the better - students are willing to pay more for accommodation that is in close proximity to their classes and lecture halls.
Sound interesting? Before you go ahead and take the plunge to lease your Johannesburg or Benoni property as student accommodation there are a few things you should bear in mind. These include:
1. Student accommodation is a particularly profitable enterprise. Rent for student accommodation per square meter is much higher than that of residential units.
2. Students, much like cats, are hard on the furnishings. When you rent to students you have to expect some wear and tear. It takes a bit of time to get them housetrained and you have to be prepared that there are going to be some broken windows, mysteriously missing faucet fittings and small fires at some point along the way.
3. Always ask for a guarantee. Never let a student sign a rental contract themselves - most students are too young to have much of a credit record and by having a parent/guardian signing in their stead you can get a clearer credit history. In this way you also know who to hold accountable should there be any problems or damage.
4. Always collect a larger-than-normal deposit. See the second point above. Broken windows have to be repaired, missing faucets replaced and small fires put out, and all these things cost money.
5. Be prepared to visit your property often. Although not all students are vandals by nature, checking in regularly will enable you to spot problems early on and keep them on their toes with regard to general maintenance and hygiene. You don't have to go all Big Brother, just be prepared to pop in regularly for some unscheduled property check-ups.
6. Consider investing in a property manager. If you have a fulltime job or live far away from your property you might consider getting in touch with a property manager who can take care of things for you - screening prospective renters, taking care of maintenance and payment, etc. Although their surcharge may be as much of ten per cent of the total rent of your property this will take a great load off your shoulders and make the rental process substantially simpler.
These are just some of the things to bear in mind when letting your Johannesburg or Benoni property as student accommodation. If you feel unsure as to how to proceed it is best to speak to a qualified real estate professional. They will be able to assist you in getting the most bang for your Johannesburg property buck.
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