Hello All,
First post so be gentle
..I am thinking of getting my first property. I am currently renting and that is OK for another couple of years as were inner city and don't want to move to the sticks just yet
So, what i am looking at is these Student Apartments , for around 150k. They return 10k a year and some are leased for the next 12 months. The location is near unis and CBD. Any advice or experience people have with these sort of properties?
Looking to build some equity as well as make use of -ve gearing to get some tax relief.
Thoughts, Suggestions and Constructive Criticism welcome ..
Thanks all,
Dubb
You wont build equity fast. Except for the fact that lenders will require a higher deposit as they view these as higher risk.
The high rent is the trade off mate. Do a search of this forum and see that many new people look at these and serviced apartments first. Most end up with straight residential property.
Ciao,
Hi Dubb how about you buy a 4 bedroom house (close to transport, uni, etc, etc), turn it into a 5 bedroom house , rent it to 5 students (by room) , work the numbers/deal so you can make it at least break even. Manage it yourself for the learning and the savings in management fees, and repeat process every couple of years, or every six months J
…depending on how hard you look, you could even make it +CF… in good suburbs too…
Happy Investing
Dubb,
Ditto on Simon's comments – no growth to be made on student accom. Not even in the current bouyant market do they carry much re-sale value.
You are better off to do a bit of leg work yourself, research and look at residential stuff in decent areas.
Cheers
Danny
One real life example,
Purchase price $722,000
Repayment: $45,000 per year, $3,750 per month (20%) deposit.
Reno cost: couple of fridges, internet, a few more kitchen cabs, walls: $10,000
Rates + Insurance: $1,500 per yearThis was a 5 bedroom, turned into a 7 bedroom, with rooms renting @ 160p.w. Total rental income (1st year): $160 p.w. x 7 (tenants) x 52 (weeks) = $58,420
You work out the rest of the numbers.
Ahh, the property is on the northern beaches of Sydney, bank valuation after 14 months $860,000, line of credit ready to buy another one.
Happy investingThanks for all the replies.
It does make a lot of sense in what you are saying. Its a better idea to buy my own property first or even buy a house and turn into a Dorm.. Its always good to get some persepctive from people who have been there beforeThanks once again, really appreciate your help.
Cheers, Dubb
I have a student place. Five bedder 400m from uni. Cost me $315K and returns $540pw.
Looking at another with even better numbers and better tenant.
Ciao
Simon, is your property vacant over xmas holidays? Do you advertise the rooms at the uni and manage it yourself? Do you furnish each room? Thanks
millions wrote:Simon, is your property vacant over xmas holidays? Do you advertise the rooms at the uni and manage it yourself? Do you furnish each room? ThanksI take ESL students over summer for about 75% of the normal rent.
I advertise at the uni online and manage myself. I also advertise on another website for specific students as I have developed a niche marketing idea to get the best students. I wont expand on this – sorry.
Each room is furnished as are the common areas. Most of the furniture is second hand nice stuff but all the electrical goods are new with long warranties. Easier that way.
I provided a wireless modem but I don't do the adsl setup anymore. When I did they just abused it. I had to pay line rental and they made calls and I was always caught out as they all denied making the expensive calls. So now I tell them to organise it themselves – is much better.
I have the time and interest to self manage. But in this city real estate agents will manage student rooms. When I get sick of it then I will get one to manage it for me. Has been fun for four years now and I am happy so far. They will probably earn their fee by putting rents up. I am a bit of a softy sometimes
Ciao,
Thanks for info Simon, sounds like a winner! Congratulations. I have a few idea's happening, just gotta research more and get motivation to try something different, Linda
I am looking into this also.
I know that turning a residential house into student accom is better than actually buying these dedicated student lodgings due to the appreciation but these things go for about 200k.
Since I can only stretch to about 250k, and I need something CF+ are there really any other realestate alternatives?
..
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