6 JUNIE/7 JUNIE
Now’s the right time to sell E
very year thousands of students stream to Stellenbosch. Some 5 200 students can be accommodated in residences - of a total of 27 823 students enrolled at the university in 2012, 20 000 had to find private accommodation. So says Jacques Becker, Seeff’s Stellenbosch agent. “There are many factors to consider when buying property in Stellenbosch. Although there are more than 170 apartment blocks to invest in, finding the right place in your price range requires homework.” “The position, security and price of a property are major considerations. Look at current and potential income and the risk of an empty apartment. Pay attention to finishes, parking, costs of ownership property and how long you are planning to hold on to it. “Start by finding out which areas or apartment blocks are considered better than others. Remember that in some areas prices may differ depending on the side of the road. This is especially true around the edges of campus.” Discerning buyers agree that the the area bordered by Banghoek Road, Die Laan, Andringa Street and Cluver/Marais Streets is prime . “This area is more expensive and sought- after because it is closest to the campus, so owners can usually expect to get a better growth here. “Growth in this area derives mainiy from the scarcity of wellpriced property. Buyers able to buy here are often unwilling to compromise on a specific position or don’t have the time to wait for the right property, and often end up paying a premium. This premium price then sets the market value and accounts for growth.” Property prices drop significant-
The “Ou Hoofgebou” in Andringa Street, on the campus of the Stellenbosch University ly as one moves away from the campus area to the north or the west. Property here may cost less, but rental income against price should be better than on campus. This could restrict growth and finding permanent tenants is more difficult. Selling off-campus at a higher price could be more difficult, although there are always buyers for well-priced properties.
“In short, it boils down to higher growth but less income on campus and better income but less growth off-campus,” says Becker. Buyers must be careful when buying properties for renovating. “Buying, renovating and selling immediately rarely works - the conversion, transfer costs plus agents’ commission do not allow immediate profit. “Many buyers over-capitalise and when it comes to selling, their
price is out of line with the rest of the scheme or the area. If you buy an apartment for your own children, they will reap the benefits of an upgrade or renovation, but it won’t necessarily translate into an increase the property’s value by the amount you have spent. “Renovating can be beneficial when one converts a bigger, older property from one bedroom to two, or from two bedrooms to three and
will yield extra monthly income. An extra bedroom could also increase the value immediately, if done properly.Make sure this is legal and determine costs. Also consider parking; a lack of allocated parking bays could be a drawback when selling,” he cautions. The expense of owning a property such as bond costs, levies, rates and taxes, maintenance and management fees, should also be considered when looking at monthly return. Becker recommends having a rental agent, especially if one lives away from a property. “An agent will draw up a rental agreement, do credit checks, meet FICA, hold the tenant’s deposit in a trust, ensure payment to the owner and deal with issues like maintenance. The management fee of an agent is usually around 10%. “You have to consider how much rental will cost for the duration of your child’s stay, if you are not convinced that buying is the best option. It could cost around R216 000 over a period of four years, if rent is R4 500 per month, not taking yearly increases into account. “In our experience parents who purchase usually hold onto a property for a couple of years after their children have completed their studies. Of course factors like buying cash or bonding should also be taken into consideration. “Now is the time to market your property in Stellenbosch if you wish to sell to parents looking to buy for 2014. There is interest now, which will increase towards the end of the year and the demand for property at market value outstrips supply. Contact Jacques at 021 886 7905 or at 083 989 1249 for apartment sales or a free valuation and a list of the latest sales in your block. Phone Jaco Spies on 082 864 5015 for information on rental property.