There are units advertised today specifying yields of 11% . They are built on campus specifically for university students. There is obvious higher costs for management of the residence although I am very suspect as to how they intend to populate the units ie.Can they be discriminant in which units they put students into? This has an obvious impact on your yield figures.
Has anyone got or had an investment of this type? If so, how was it structured? how real are the returns and occupancy rates? Is it considered commercial in terms of a bank loan? etc…. Any other information you think is relevant please advise.
Regards[8]
Hi Online (or is it 8???)
When relying on students as tenants, my first thought would be how do you get the rent paid during Nov – Feb when they all take off for some home cooking or head to the beach???
However on this same issue, my tax acc. recently told me about one of his other clients – this guy bought heavily around Wollongong Uni (NSW) a couple of yrs ago and has no trouble getting (and keeping) reliable student tenants. His strategy is to actively pursue/advertise for O/S students – he gets them to sign up for a minimum 12 mth lease and sometimes even pay up to 3 mts rent in advance. Appently parents worried about their offspring being in a foreign country by themselves all yr are willing to pay upfront for longterm and reliable accommodation – even if it isn’t used all yr round. I guess this is a “win-win” situation, so long as he isn’t just cashing in on parental fears and charging above-rate rents.
Anastasia
Thanks Anastasia
Yes you are correct and that is why I am basing my analysis on 42 weeks in the year. Thankyou for the story as this is exactly what I am concerned (and somewhat less now) about – it’s good to see that they have not had trouble finding the tenants. Can also see the benefit in advertising and finding tenants yourself as the costs are nearly 10K per year for management, electricity (yes, consumption is paid by the vendor), rates, body corporate etc etc…. At least there s a portion of this that I could insource to myself if margins grew tight.
Thanks again… Online
[8D] Time to put the shades on for sunny QLDI also know that student will pay to keep same accommodation and will pay due the holiday break just to keep good accommodation….hope that helps[
]Hi Online
I live in St Lucia in Brisbane the home of Qld Uni. My personal experience is be weary as this time of accomadation is sold merely on its yield. Think you could find as good a return by wrapping.
Cheers Richard
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