Uni Students – Rental Investment

Hi Novo,

We set up multi-tenancy accomodations (or student accomodations) as part of our property management services. Rather than repeat myself, please have a look on our website, there is a brochure titled "information for investors" that has some information about this type of strategy. Email me [email protected] if you can't find it and I will send one out to you. It is SA specific but you can still get some general ideas from it.

One thing that we have found with many clients is that no due diligence is done before buying the property. You need to keep in mind that it is just a TOOL used to increase cash flow and just like you don't use a hammer for every job, multi-letting cannot be applied to every property.

We have had clients come to us with a 3 Br house in a very high rent area say $350 to $400 per week rent and want to do a student accomodation on it. If rooms can be rented at $150 per room per week, and there are 3 rooms, that is only $450 per week. Then there are furniture costs and utility costs of around $100 per week. That means that they are just breaking even by using a tool that is much more complicated than renting a vacant house to one tenant.

Please always consider what the normal rent will be and only set it up as a multi-tenancy IF IT MAKES SENSE! 

Hope this helps.

Hi Novo,

If the lease is expiring around December and you know it won't be renewed then you need to market your property in advance to increase your chances of finding new tenants and filling it up again.

Where there is risk, there has to be risk management!

I have 5 students.   Some leave and some stay.  Some leave and return in February.

Whatever rooms I have vacant are rented to Asian students studying English prior to their degrees starting.  Plus I do any work needed over that time.

It works well for me.

Yes I do. I have a terrific relationship with my students and I like the good ones to come back.

I do allow them to lock their room and leave it over the summer for half price, the ones that wish to move out I relet their room.

On the odd occasion when I haven't really wanted one back I have simply told them so. Think this has happened twice in four years?

I market to a niche market and it works great for me. I don't really like overseas students during the year. I find that I have more trouble with them than with the Australian students. Well my Australian students are a mixed bunch and look like international students. With my students it isn't just all about money and leases. They treat me in a friendly respectful manner and I do the same. I mow the lawns so am over their often and I go in for a drink every time and say hello – we usually end up chatting for 30 minutes. I chivvy them to tidy up and leave the odd $4 cake on the bench. I help them move in with my stationwagon and they invite me to their parties – the one I went to was amazing. They had laid cardboard over all the carpets – 20 yr carpets too.

Sometimes I take my dog and they all have fun with her.

Usually have them over for a BBQ in Feb each year. Sometimes some of them crew for me in my boat … which I sold recently.

Mine probably isn't a good business model but I love it, have a lot of friends and very little grief. I also believe that I get a higher return than most similar setups here and 60% of my kids want to return. Usually they leave over third year as they need to go rural for placements.

When things get back to normal here (building a new PPOR) I plan on replicating the whole thing. I reckon it will be 20% more effort for double the return.

Cheers,

Yep – there are student houses like that too.  I would have lived in one of them if I had been a student !!

Cheers.

Yes not a businesslike arrangement at all …. 

But I think I get more than just money out of it.