Hello,
This is my first post on this forum. I'm moving to Australia for a few months and i'm interested in the property market down under
I was wondering do many investors buy houses to rent to student to generate higher rental yields?
Some investors may buy houses near universites etc to lease to students, most people on this site choose not to buy 'student accommodation' in large compelexes as they do not historically have good capital growth and are also very difficult to obtain normal bank finance for.
i recently had to turn down what i considered an excellent opportunity, purely because the timing was wrong for me
There was a duplex for sale in Annerley (Brisbane) which in anyones language has to be a suburb with good expected capital growth. Its close to universities, transport, large shopping centres etc, in short a great spot for students etc
Each duplex currently had 3 bedrooms, but with the addition of one wall in each duplex, it would have given 3 x 1 bed rooms, and 1 x 2 bed rooms in each duplex
Now the most students (i believe) you can have in a house is 5 (else you have to jump through all the legislative hoops relating to boarding houses), but this was a property deal with 2 duplex's so you avoided that little issue
So now i could sleep 10 legally in a property at Annerley…
Cost of House $650,000.00
Expected weekly rent $1400.00even after all the management costs, allowances for maintenance etc, the thing was hugely cash flow positive AND in a big city (for the cap growth)
I dont see the issue with student accommodation personally, its maximising the properties earning potential
Hi
I run student acc in Adelaide and yes they are a great way of increasing the returns, however I noted on your intro you said you are here for a few months and I would not have this type of accommodation if I did not live in the same city. It is a bit more hands on than regular housing and if you have it managed by an agent it would swallow up a lot of your returnsBarry
chriscarman wrote:i recently had to turn down what i considered an excellent opportunity, purely because the timing was wrong for meThere was a duplex for sale in Annerley (Brisbane) which in anyones language has to be a suburb with good expected capital growth. Its close to universities, transport, large shopping centres etc, in short a great spot for students etc
Each duplex currently had 3 bedrooms, but with the addition of one wall in each duplex, it would have given 3 x 1 bed rooms, and 1 x 2 bed rooms in each duplex
Now the most students (i believe) you can have in a house is 5 (else you have to jump through all the legislative hoops relating to boarding houses), but this was a property deal with 2 duplex's so you avoided that little issue
So now i could sleep 10 legally in a property at Annerley…
Cost of House $650,000.00
Expected weekly rent $1400.00even after all the management costs, allowances for maintenance etc, the thing was hugely cash flow positive AND in a big city (for the cap growth)
I dont see the issue with student accommodation personally, its maximising the properties earning potential
Hi Chris,
I agree it's about maximising rental potential. The yields are good and similar to my student properties in the UK.
What is regarded as 'boarding houses' in Aus?
basbog wrote:Hi
I run student acc in Adelaide and yes they are a great way of increasing the returns, however I noted on your intro you said you are here for a few months and I would not have this type of accommodation if I did not live in the same city. It is a bit more hands on than regular housing and if you have it managed by an agent it would swallow up a lot of your returnsBarry
Hi Barry,
I agree student housing can be very time consuming. I'm coming over to Oz with a view to settle in the near future. I'm just looking at the property market to determine if I could do similar things i've done elsewhere.
Do you include any bills for your properties or do the students pay all bills?
Do face much competition from the Universities building their own housing facilities?
Do students stay for the full 12 months or just nine months?Shah
Yes all utilities are included in the rent
I also rent to fulltime workers and there are always heaps of people waiting
I have not had any internationals travel home in the holidays they tend to stay, I have a girl from KL who has been in the house for 3 yrsBarry
basbog wrote:ShahYes all utilities are included in the rent
I also rent to fulltime workers and there are always heaps of people waiting
I have not had any internationals travel home in the holidays they tend to stay, I have a girl from KL who has been in the house for 3 yrsBarry
Thanks for the reply Barry. Are the working tenants on individual contracts? Are there additional requirements for such rentals (e.g. approval from the local authority, licensing, etc?)
In SA more than 5 individual tennants require council approval, with alterations to the house, smoke alarms, fire escape doors etc
Adelaide sounds similar to Brisbane, if you’ve got 5 or less people council are ok with it and fire compliance is the same as regular residential rentals. 6 and up gets a bit trickier.
Best to speak to a specialised manager of student accommodation, there are two main players in Brissy, Hive Student Accommodation who i’ve dealt with and The Pad.
In SA more than 5 individual tennants require council approval, with alterations to the house, smoke alarms, fire escape doors etc
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