Just thought someone maybe interested.
In 1996 we bought two houses in Salisbury and one in Robertson Qld near Griffith University.We put a bed, wardrobe, desk, chair etc in each room.
Students shared the kitchen and bathroom.
They payed about $65 per week to $85 per week per room.We signed each tenant up for one semester only and then renewed it if needed.
We did this in case the student was the tenant was difficult and didnt get along etc.It was nothing but a huge hassle.
For example someone flooded the laundry but no one owned up to it.So whenever anything was done to the property we could not claim the bond as we had no proof who did what.
One tenant was stealing from another etc etcYou would make an appointment to be at the house to show a student the room and then they sometimes did not turn up.
After a couple of years we had had enough.
We now only rent houses to one family and always use a PMHi Casey,
Thanks for sharing your experiences. I’ve just come across an investor who specialises in student shared housing. He bought a $180,000 house a few months ago, and is renting it out to 3 different students for a total of $400.
Now that’s clearly positive cashflow. In the metro area too (close to a university).
However, you do make a valid point about problems with shared facilities. I wonder if the solution is simply to make all occupants responsible for any damage to shared facilities, regardless of whether they personally caused it.
You’d probably need specially drafted clauses in the lease to deal with this.
what are your thoughts?
Cheers
MHi Casey
thanks for sharing that. I have been thinking re: student accomdation and really never thought about it like that.
So i gather you dont reccomend it. I have heard that studuents from overseas doing a degree for say 3-4 years are a better option?
Definitely the issues you mentioned would still need to be addressed via a lease wording clause etc.
regards
alfThere are many investors here in Newcastle who operate these properties very successfully.
I own a property with 5 bedrooms which is currently returning $420 per week and after a reno in the NY I expect it to be closer to $500. This is clearly cashflow positive and in a good solid capital growth area too.
I have medical students keen to get into it as I offer little extras such as ADSL and rent it exclusively to them which they love for group study and support. I have a mature student who collects rent and maintains order for me in exchange for the best room.
Local PMs will also manage them for you if required.
There will be fundamental differences between this sort of rental and also renting to a family – I think it is a pretty standard rule that higher returns usually = higher risk.
I am also uncertain whether a flooded laundry would be considered not fair wear and tear and could be deducted from a bond unless you could somehow prove it to be done deliberately?
I think it should be understood that to get these returns the investment is a little more hands on and should be viewed as a business as much as a rental property. I do know other landlords who have foresaken the higher rent to let to a single family because of this increased workload – one lady I know took an active interest in the students welfare only to find she took the role of their parent and had all sorts of teary phonecalls about boyfriend and car problems!
Best of luck with your investments,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I think that you need to be available to go to the house at any time.
We had mostly international students and some would not share with people from different countries etc.
The long term students we found would find their own houses.
The flooding of the laundry we could not prove as 6 people in the one house all said we didnt do it.
Someone defrosted the fridge using a screw driver and no one owned up to it.The rent was good but it was not worth the hassle.
It is much more rewarding personally renovating houses for us now!My experience with overseas students was not great. The cultural differences initially will test the property out. For example the bathroom and kitchen will never be the same. If you buy in a cooler climate and they are use to a warmer climate the place will become a haven for mould as they will never open windows.
Hi all,
Just another point of view on International Students.
I have a unit close to uni that I specifically rent out to international students on study visas. They live in the unit for the length of their degree, when they move back overseas they pass all their furniture, tv’s etc on to the next group who then stay for the length of their degree.
I have however learnt, not naming country of origin for fear of being labelled a racist (which is so far from the truth), that some students will try and sqeeze every little bit out of you. I have also found that most of these students are on study scholarships and their rent is paid for them, so whatever is left over they pocket each week.
Anyway, to cut a long story short, I’ve found this arrangement works really well. I’ve got no problems finding tennants and the rent is always paid, in most instances well in advance.
Having a PM manage the unit means everything is taken care of, that leaves me with a hassle free cash flow +’ve investment that has also shown fantastic capital growth. CAN”T GO WRONG.
CheersHi Casey
Can I suggest if you still wana do the student share accommodation that you contact the TAFE at the Parafield airport (near Salisbury) for possible tenants. My information is that they are continuously looking for accommodation for students of the flying school. My understanding is most are from overseas and come from wealthy families and parents pay the costs at a great rate. I knew of some people doing this a couple of years ago and only have positive things to say about them.
This information may be outdated but worth looking into.
I also know they are willing to pay extremely high rent if laundry and meals are catered for also even tho they are hardly there for the meals.
I hope this is of some help.
Kind Regards
BearOur experience with homestay students is that you can get up to $200 (depending on how much responsibility you take on, e.g. if they’re under 18 ). Generally though I think it’s about $180/week for an adult if yo provide food. Even though rich parents usually pay, they tend to try squeezing every last cent out of you, some going as far as trying to take cut lunches to TAFE for their friends.
A mate of mine used to take them for $200/week from Taylor’s College. In one particular instance they had a student who only showed up once a fornight to pay the rent. I think that it’s an immigration policy that students under 18 have to arrange homestay, though no one actually checks to make sure they use it.
That particular mate of mine went on to buy the house next door to him to house the students, though more recently he reverted to renting it out. Now he doesn’t have any students (I think it was mainly something that carried over from when he was renting anyway, helped him to offset the rent).
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Jeremy Lunn
Melbourne
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