Disadvantages of Investing in Student Housing

Posted on | October 6, 2009 | No Comments

With the number of overseas students coming to Australia to attend universities, student accommodation is one area that investors look into, but there are some disadvantages to investing in this area. For a start, student accommodation is not going to be full all year. Investors can get around this to some extent by charging a lower rate during holidays if the student wants to keep the accommodation.

Others require all possessions to be removed or stored in a locked room so the accommodation can be rented out to tourists during holidays. This means that there will be extra cleaning fees. Another disadvantage is that students are not known for their house or garden care, and if several students are sharing one house, it will very likely look like a trash pile in no time. This means that there will be a higher maintenance bill. Some landlords get a cleaner in once a month and charge the cost to the students.

Housing that is dedicated to students will often have such things as onsite management and communal facilities that all mean extra costs for the landlord. With the number of overseas students coming to Australia to attend universities, student accommodation is one area that investors look into, but there are some disadvantages to investing in this area.

For a start, student accommodation is not going to be full all year. Investors can get around this to some extent by charging a lower rate during holidays if the student wants to keep the accommodation. However, something like a four or five bedroom house shared by the same number of students can bring in a reasonable return on investment, even if it costs quite a bit to start with.

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