Hi,
What are your thoughts on investing in an apartment in Unilodge Brisbane (104 Margaret St, City)? The unit seem to generally be studios with small kitchenette and I think are generally rented out to international students. The rental net yields are around the 7% mark. Does anyone know anything about this?
hi pagey9,
fyi, just remember that student accom is a niche, and therefore you are removing yourself from the wider market. it is generally better to invest in a property that have widespread appeal and reach(to give you greater renter options), although there may be times that niche is so high in demand/short supply that it's attractive at times.
some shortfalls you'll most likely find:
1) financiers either don't want to lend on these or may lend less 80%
2) it's competitive and not very sustainable
3) you can only rent to students, and you can't live in it yourself/use it if it's vacant(unless you're a student)
4) when it comes time to sell, it also attracts a smaller segment of buyersregards.
Check leasing fees. These can sometimes be high which soon erodes your 7%. Also other ongoing fees.
Not my cup of tea but everyone's different.
Also make sure you have very deep pockets as you wont finance them with any conventional lender at the moment irrespective of the LVR.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Student accom goes into the same deal as aged care and hotel room leasebacks. They are for the investor who hasnt a clue. And as such, they exploit that with leasing fees. Not to mention the fact they are dependant on a single sector of the possible leasing market. If I was looking for an investment i'd want something i can stick just about anyone in, not wait (in vain?) for the next student boom (which may or may not happen). In 20 years when any or all of these places will have failed in the market these will be the first contenders for the next generation of slum housing.Banks know it, they are hard to sell (you need at least 35% deposit minimum to get a loan on these) and they arent showing much of a capital growth.
That just comes from me as an ex-real estate salesperson. Of course .. geared right .. it may just work for you. But .. you've been warned.
Oh yeah .. think i'm making this up? Check out the current flops in Hawaii .. Florida .. New York … California .. (hotel leasebacks). Its easy to find them .. they are usually the bottom of the market.
Cheers
Richard
Thanks for the updated info
Last year, investor is still able to borrow LVR 50% with major lendersPagey, Avoid AT ALL COST… see others' comment on other posts
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