8 + Room Student Accommodation

Hi
We have just finished converting 2 of our residences (1 was a PPOR) into student accommodation. I was going to write a detailed post after I caught up with my breathing, but here I am.
The two residences are as follows:
1 was a 3BR, separate L shaped lounge, separate kitchen. We converted the L shape into another bedroom, made lounge and kitchen into open plan, so that is now a 4BR residence.
2 house (our ex PPOR) is a 5BR + study, we made that into 6BR house.
The houses are duplex, 1.5kms to the uni,1km to supermarket,hospital, pub and a service station, halfway between the 2 campuses of CSU Albury.
We now have 10students living in both the houses.
We got them to sign individual room leases for 48weeks rental payment for 52 weeks lease.
Room rent includes gas, electricity and satellite internet connection(we cannot get ADSL there yet)and weekly cleaning of the common areas.(My husband will do that and we can keep an eye on the property as well)
Houses are furnished, they only have to bring their linen and kitchen utensils, crockery etc.,
Rooms average rent is 105 per week.(I was told it was very cheap in comparison to others in town)
Every parent who brought their child was impressed with the houses and the UNI is actually recommending them. I did not spend anything in advertising, made up a flyer and gave it to Uni student accommodation services and they did the rest.
Rooms filled two weeks before uni started.
We have spent $7,000 on furniture(Fantastic did a deal with us)
$1,000 on electrical applianes like fridges, washingmachine, toaster, kettle, mirowave etc.,
$4,000 on data cabling for each room for internet access along with servers, hubs and modems and satellite connection.
the 4BR house needed complete refurbishment as the previous tenant used to smoke in the house – about $5,500
So for about 18 to 19K investment, wehave created a source of passive income that would support our son’s study in Melbourne – both tuition fees(private music academy) and his stay in ML. After 3 years, my husband can possibly retire from his part time job that he hates.
It turned out to be a very successful project worth duplicating. Only downfall would be the returns will not be as high initially, because the two houses that we converted do not carry as much mortgage, but considering the shortage of quality accommodation for students in this area, it is worth the effort and we will be doing it.
What have we learnt out of this?
Nothing is impossible.
Do not succumb for little stresses
No pain No gain
You dont know until you venture out. We are living in a rented house at the moment with views to die for(and i don’t have to pay the mortgage, the owner is negative gearing) and by the way I can claim 20% of my rent for office expenses.
To answer your question, I think if the house is more than 6 rooms, it will be classified as a boarding house and you will be playing with the next level of rules, as in increased insurance, onsite manager required etc., I think it is for more than 6 rooms, but you can find out from tenancy board.
As far as students concerned, you get what you give, and we have to trust them to behave like mature adults and they do. I don’t have any problems dealing with teenagers, I love it and they seem to respond to me.
I don’t know if I have answered your question, and I am sorry if it sounded like I am bragging, but could not help enjoy the success after hard work – gosh it was hard work, putting together 10lots of furniture beds, desks, chairs etc.
I just went with normal landlord insurance and take it from there.
Don’t hesitate to ask more if you need to know anything.
Yes, Simon did help me initially when I had the idea and he is good.
Padma[biggrin]

Hi
I went through CGU and told them i need landlord insurance for student accommodation house. I wasn’t questioned on number of students and I wasn’t told that it would be a boarding house. I just took normal landlord insurance and also insured the contents in the house. Premiums are in the range of about 500/- pa. It is not true that you need to live in the house to have contents insured. Shop around
2. Tenancy board – walk the fingers in yellow pages. They should have offices in just about every city. If there is one in Albury, there should be one anywhere. Uni student acc.services have given me their contact number, so may be your uni can help you.

3. Gas and electricity – I have tripled our household consumption(and we are very heavy users, hving two teenagers) and I am waiting to get the first of the bills to see whether I am right. You can only guess and be liberal in that.
4. I don;t know what you need to do to split the room into two, if it is erecting a wall and a door in it, it costed us around 400/- for the handyman, materials around 250/- and a second hand door for 50/-. Again depends on how much work you do yourself.
If you have any other questions please do not hesitate to ask.
Good luck
Padma

TurboB,

As mentioned in a previous but similar thread, I wouldn’t touch boarding houses and / or student accomodation with a barge pole.

Far greater opportunities out there.

Hope everything goes well for you if you do proceed however.

Padma…how much value do you place on your and your husbands time ?? I factored a lowly $ 20 / hour into my calculations…this quickly brought my fairy tale “Student Landlord” days to an end.

Cheers,

Dazzling

“Go hard or go home”

Hi Turbo,

I know I already contributed my 2c earlier, but in the meantime a friend who invests in “student accommodation” type properties has sent me an email saying that there are both pluses and minuses that need to be considered (as with any IP) along with a couple of links that may be of interest:

http://money.ninemsn.com.au/article.aspx?id=19552

http://www.whichproperty.com.au/Newsletter/profile.asp?DocumentID=79&MenuID=216&RefMenuID=164&Category=

BTW….he makes a killing on his investments, and he knows this market well, which is always an important factor when buying into ANYTHING. To quote but one example, he has a 10 bedroom, 2 bathroom student accomm that returns $1400 per week!!! True, he pays the electricity, gas and water bills, plus he provides internet facility, and his CG may not be as good as surrounding properties, but heck, if it’s cashflow you want, it is a great opportunity IMO. [grin]

At the end of the day, you have to make up your own mind. Do what is right for you. [biggrin]

Cheers,

Jo

Hi there,

I thought I’de just post on this thread as I found it when I was looking for student accommodation insurance myself and there was no real answers and I was actually a bit confused when I read this thread.

I started another thread on this forum asking if anyone had any updated info on this type of insurance and someone suggested calling the guys at this website http://studentaccommodationinsurance.com.au/. Basically I did and the lady there helped us out with all the info we needed.

Hopefully this can help someone else in the future and save a few hours researching.