Hello.
I’ve got a lead on a property near a major East Coast university with potential and I’m giving serious consideration to buying it. It’s a new reno job (existing structure stripped back to timber and then re-built from there) custom built for student accom with lockable bedrooms, internet ports and built-in desks in every room, 1 bathroom per 3 bedrooms and an open plan common living area. It’s partly furnished.
I’ve had some experience with IPs and development but this one is a bit oddball.
My questions are:
Has anyone out there had experience with owning tailored student accommodation? I’m wondering specifically about lease structures, unusual costs (ie. Internet access, common area cleaning etc) and, most importanly, vacancy periods. Also, if each room is let separately are there generally zoning issues?Any help appreciated.
Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hello Artaud
I don’t own such a property but I know someone who does. Since no one has answered so far I will tell you the little I know. [smiling]
As you say unusual costs include internet and common area cleaning but also electricity, water and gas. The person I know supplies cleaning products (dishwashing liquids etc) and such things as toilet paper etc as it costs relatively little and saves a lot of hassles between the occupents. This all has to be factored into the rent and the utilities need careful monitoring to make sure they stay reasonable.
I believe you should check with the relevant coucil to see how many occupants your allowed to have per house before it’s classified as a boarding house. I think you want to stay under this as this brings on a whole new set of rules and regulations I believe.
I don’t know if all agents will manage such a property. The guy I know does it himself and is there very regularly (at least a couple of times a week).
I know his tenants are on 12 month leases but I don’t know if there is anything special about the leases. I could ask if no on else on the forum can give you an answer.
Hope this is of some help.
Cheers
ElkaI have a five bedroom place I rent to students by the room. I think it is probably quite different to what you propose.
my council does not have a policy on a house with less than ten seperate let rooms so I am not classed as a boarding house.
If you think I could help just give me a call or post some specific questions.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[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.
Thanks, Elka.
As it turns out the place is not in the correct zoning for boarding house status so it would have to be let on a single lease or on illegal sub leases, neither of which seem proftable or sensible to me. Shame as it could otherwise have been a tidy earner. I suspect this is why the current owner/builder wants to unload it.
Thank you for your reply.
Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hi,
Some tips, call YMCA Student Accom in Melb or go to http://www.collegesquare.ymca.org.au/. Ask them what works and what does not.A 12 month lease from Jan/Feb is best and it will minimise your vacancy. However you need to plan for it as once a semester starts you may have trouble filling a vacant room.
Be sure you manage it to the letter as I bet if your student takes you to the tribunal you may have a hard time! Im not sure if there are additional requirements for student leases.
Any services that you provide be sure that the correct responsibilities are passed onto the student in the lease. eg you dont want a visit from the police becuase of certain things the students found on the internet!!!
Most important (well I think there is a morale responsbility) this is the kids first time out of home so be sure you comminicate with them and key an eye on them.
Mat
Originally posted by mathewc73:A 12 month lease from Jan/Feb is best and it will minimise your vacancy. However you need to plan for it as once a semester starts you may have trouble filling a vacant room.
…..a 12 month lease will be seen as undesirable to students and yours will fill last. If they break the lease what wil lyou do? Remember they are students with no jobs and you have 5 or 6 of them.
Be sure you manage it to the letter as I bet if your student takes you to the tribunal you may have a hard time! Im not sure if there are additional requirements for student leases.
Or you can be really cheerful and friendly and look after your students so that you never go near the tribunal. Thats what I do and they invite me to their parties even! I went to one and they had covered the carpet to the toilet with cardboard so as not to get it dirty – I would never have done that!
Any services that you provide be sure that the correct responsibilities are passed onto the student in the lease. eg you dont want a visit from the police becuase of certain things the students found on the internet!!!
Most important (well I think there is a morale responsbility) this is the kids first time out of home so be sure you comminicate with them and key an eye on them.
Mat
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[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.
Art
How many student places does the property that you are looking at have.
Simon mentioned his council not considering anything less than 10 to be a boarding house. That’s the same number that the person I know said his council used and this is in another state to Simon so this may be pretty standard.
The person I know has 9 rooms.
Elka
Hello.
I spoke to the council and they advised that the minute you take on multiple sub-leases it is classed as a boarding house. The only way to get around it is to have one lease for the whole place and I doubt anyone would be willing to take on a lease for $700 per week.
Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
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