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That is because finding a CF positive property is difficult.
Generally the rental return on a property is about 4-5%.
The 11 second rule is looking for a return of about 8%
I looked at these as well as the ones in Sippy downs.
After everything you are looking at about 12k return on a 210k investment, which is about %5.5. (not including depreciation)
Not bad but not amazing and there is no capital growth and they are hard to sell.
I rang and spoke to the complex manager and he we very honest and straight down the line. He said they are not for everyone, and often parents with students attending the uni buy them so their kid has somewhere to live.
If you are serious the ones in Sippy downs to me looked like a better option than the Medowbrook ones.
Don't forget that they are not full for the entire year and over chrissy, even if they are rented it is for a reduced rate. Oh and there is also a $750 annual advertising fee on some of them.
Have a look at the thread titled "Shafston University Mansions" in the general property forum.
I looked into several Student Accom units in Sippy Downs and a couple in Logan in Qld and could not get the figures to work.
After things like Sinking Funds, council rates, and body corporate, I was looking at about a %5 return on a 200k unit.
These were 4 bedroom units rented at ~135 a week each, so even with at gross rent of about 2K, it didn't really work once you take into account the actual occupancy rate ~%90, the cleaning fees and the %9 letting commission.
If anyone is considering these units make sure you get some actual figures.
I am looking into this also.
I know that turning a residential house into student accom is better than actually buying these dedicated student lodgings due to the appreciation but these things go for about 200k.
Since I can only stretch to about 250k, and I need something CF+ are there really any other realestate alternatives?
