The secret is out: if you're eyeing up an investment opportunity, Bloemfontein is the place to be. The area is witnessing a remarkable surge in its student accommodation market. Any property pundit will tell you that student housing is an excellent asset class, proven to be resilient to economic fluctuations. And in the City of Roses, this has never been truer. With a growing number of students seeking quality housing options, this real estate market presents great prospects whether you're a fresh-faced newcomer or a seasoned investor.
Answer the student housing crisis call
With many South Africans aspiring higher after matriculating, student accommodation has become a fast-growing property sector in the country. In 2020, over 1.3 million students were enrolled in higher education in the country. The Department of Higher Education aims to increase this number to five million by 2023.
However, taking a seat in a lecture hall is not without its challenges. There is currently a massive shortage in student accommodation even with accommodation providers increasing living spaces for students. In this supply-demand gap, private landlords have the chance to get a piece of the action in a city like Bloemfontein. Students continue to face a shortfall of beds in some institutions, with the National Student Financial Scheme (NSFAS) fast-tracking the accreditation of student accommodation providers.
World Bank Group's International Finance Corporation (IFC) research has found that by 2025, the student accommodation shortage would rise to more than 780 000 beds. In this landscape, investors can easily make the most of the demand.
Reap the rewards of student accommodation
Over the years, student accommodation has been a hot property investment, with many companies even building their business models around student housing. Student enrollment is at an all-time high, creating great demand for accommodation. Even in a recession, there will still always be a need for student accommodation as matriculants look to higher education to get a competitive advantage in a tough labour market.
With the right tenant checks, you can secure a student who will pay their rent throughout their stay and can even get the backing of NSFAS funding to do so. Provided students complete their studies, you can have a tenant secured for the length of their qualification, from two to about five years.
Above all, student rentals provide a significant return on investment. Depending on the area and property you choose, you can yield between 10-20%. Bloemfontein, in particular, is known for being a solid option thanks to its vibrant education scene.
Ride the wave of Bloemfontein's academic profile
Recognised for its vibrant academic landscape, Bloemfontein attracts both local and international students from all corners of the world. The Central University of Technology (21 000 total students) and the University of Free State (41 169 total students) have the biggest student populations. There are also small but notable colleges including Rosebank College, Boston City Campus, Damelin, Eduvos, and Whitestone College.
With the University of the Free State making its mark in the Times Higher Education (THE) Rankings 2023, the area remains popular for academic fulfilment and will continue to create a demand for student housing.
Find the perfect property for your investment
The good news is that Bloemfontein's real estate market is competitively priced compared to other large cities. There's plenty of property stock on the market and new developments that have been built to meet the needs of modern lifestyles. Popular suburbs for student housing investments include Universitas, Willows, Brandwag, Westdene, Bloemfontein Central, and Langenhoven Park.
While investors are snapping up one and two-bedroom units for students in need of privacy, there is also lots of potential to buy large homes and convert them into shared accommodation with communal spaces. A one-bedroom apartment in Brandwag, for example, can start as low as R490,000, making it easy to get your foot in the door.
Be sure to look for properties that comply with specifications received from local tertiary institutions to cut back on extensive renovations. Your property should also cater to the needs of students and include WiFi, laundry facilities, and basic furnishings like fridges, microwaves, beds, desks, and storage space. Security measures such as biometric access are also a sought-after feature to give students peace of mind as they study.
Get investing with Century 21 Bloemfontein
By investing in the area's student accommodation market, you can make a smart move in meeting the demand while helping students on their academic journeys. Century 21 Bloemfontein makes the grade as an investment partner, having helped many pinpoint properties ideal for student housing needs. View our properties for sale and get in touch with our team today.