Investing in student accommodation

Investing in student accommodation is more of a yield game and not really about huge capital growth. Student accommodation is a low-cost entry point for first-time investors and is quite a low risk compared to other types of investment options.

Australian universities attract a high number of international students, so there is less risk of being left without income for your investment and in addition, parents more often than not, will act as rent guarantors.

In addition, many universities will support landlords in finding tenants for student-specific accommodation.

Students that live close to university generally don’t need a car, which means that landlords don’t need to provide car spaces and there may be opportunities, to increase tenant numbers, from the additional room in the property.

This gives you the added advantage of having diversified income streams, so if one tenant leaves, you will have others still paying rent.

Investors may need larger deposits as banks compare student accommodation to a studio-sized purchase and that these types of properties can be harder to sell and the resale value isn’t as high as normal dwellings.

Student accommodation is also recession-proof and in fact, when fewer jobs are available, people are more likely to consider university.

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Jason Gwerder
Wednesday, 27 May 2020

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