Anyone have any views on buying student accom in Footscray, melb?
1 bed studios in the 51 Gordon street apartment complex selling at $100-140K, returning 7-8%.
reasonable body corp from what i can tell.
Personally I would not touch student accommodation they are a third rate investment. You get no capital growth in fact if anything the values go backwards. Also there are lots of student accommodation being built at present and with numbers being down on student as well I would expect the rents to fall as well
Stay away from this type of investment they are duds in my opinion
Nigel Kibel | Property Know How
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You will struggle to get finance unless you have a large deposit, a lender would probably only offer a low LVR.
I agree with Nigel not worth the effort they are usually in large blocks and therefore they have little scarcity.
They have long vacancies at the end of year and early into the new year as a lot of students head home for the holidays.
There's always loads of them on the for sale and rental market. This means they are not in limited supply. This means you'll end up having to discount your product to get a tenant or to on-sell the property. You want your product to be in demand. Not in an oversupply glut. Not sure whether it is the available deposit you have that is driving you to this product and its low buy-in price, but you'd be wayyyyy better off buying a 3 bedder house further out of town in an area of strong demand on a 95% lend.
Jacqui Middleton | Middleton Buyers Advocates
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Homemade depending on the actual size of the studio finance maybe limited to 65% so what you need to think if it is hard for you to finance it now what will it be like for your potential buy if and when you come to sell.
I think as has been mentioned you could certainly do better In Vic with lower risk higher gearing and potential for some Capital Growth along the way.
One loan product which is proving attractive for investors comes with a secured credit card charged at home loan rates meaning if the property needs a little bit of re-burbishment you can look to use these funds without having to dip into your equity or capital.
Alternatively piggy back the purchase and use the 20K as deposit on the next deal.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I know the building you are talking about. It's been there a few years and is close to VUT. The pocket the building is located within isn't exactly the greatest area either. Personally think there are better places and property types to invest in, as others have mentioned, capital growth would be very limited with so many apartments within that building always up for sale or rent amongst other things
Cheers
Tom
Thanks all, nuff said!
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