My husband and I are currently paying of our house on the Gold Coast, given the current figures it is looking as though we will have the house paid off in the next five years. With this in mind we have been playing around with the idea of buying an IP.
I have been reading Steve's books and doing a bit of research and have found a property in Meadowbrook QLD. It is university accomodation, with four bedrooms all with ensuite and shared kitchen laundry and lounge area, the complex itself has tennis courts and a pool.
After speaking to the agent the figures are as follows; Asking price $210,000, each room is rented for $125, the outgoings include rates ($3 340), body corp levies ($2 450), management charges for cleaning, parking,intenet ($36.4 per room) & the management fee (8.5% of net rent).
When I first looked at the property is fit the 11 second solution, but after finding out the extra costs I dont know. Are rates really that expensive (I dont pay 3340 on the Gold Coast) and I thought that body corp included the management fees???
Any suggestions or theories are greatly appreciated. we are both very serious about IP but don't want to jump into the first deal we see.
Tam i have several clients who bought at Meadowbrook leasing the properties out to the university students and have nothing but praise for the area.
At Xmas when the property becomes vacant for a week or two they go in and carry out any annual maintainance etc but is most cases the students want to secure accomadation for the coming year so the vacancy factor is very low.
Some lenders do not like the multiple style of rental accomadation but your broker should be able to structure the loan accordingly to maximise your deductions.
Hate to say the expenses you have quoted are about right for an all facilities compex.
Richard Taylor | Australia's leading private lender
Hi Tam,
I have put the information that you supplied into a Property Investment Analysis program and it appears to show a $9 a week posative gear result. On the face of it this looks good, however from my experiences the capital growth on this style of property will be poor and I would want to see examples of past sales (second hand properties) in order to measure what my investment was going to produce over the long term. I would strongly doubt that this property will experience the same growth that you have achieved with your PPOR on the Gold Coast.
Jon
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.
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