First time buying an investment property: regional vs student accommodation
Written by realestateview.com.au in Buying
Written by realestateview.com.au in Buying
For those buying an investment property for the first time, whether ‘rentvestors’ (those who invest in a home while remaining as tenants elsewhere), current home owners or otherwise, there are limited affordable avenues in which to find a suitable investment property for sale. Two relatively affordable and much discussed options are investing in student accommodation and investing in regional property. Why compare these options? Because they share a lot of similarities in terms of affordability and yield that are increasingly attracting the attention of first time investors.
Before buying an investment property and heading down one of those roads, consider the following subtle differences in what you can get out of either investment option.
Firstly, there are different forms of student accommodation to consider when buying an investment property. There are studio and 1-bedroom apartments, often rented out solely to university students and often situated within a city centre or on university land, thus having a relationship of some sort with a university. This means universities can often help you lease your investment, negating the need for a property manager.
There are townhouses and similar apartments that may be situated near universities and so attract students more than any other type of tenant, and lastly there are regular properties that you can rent out to students. This last form of accommodation can often allow you to receive higher rental yield by having multiple tenants, however there are risks associated with this, such as a higher depreciation of the property’s ‘plant and equipment’ through heavy use.
There are several factors that are singular to student accommodation that first time investors can consider:
There are a range of benefits to investing in student accommodation, which are listed in our Pros and Cons list.
Investing in regional property can be an effective long-term strategy for first time investors. However, it is one that requires considerable planning, research and an element of risk that you may not have with student accommodation. Consider the following:
Investing in regional student accommodation? Why not get the best of both worlds? Consider being a property investor in regional accommodation who enjoys the benefit of a reliable source of job creation (a university) and a reliable source of tenants. Consider Townsville, Rockhampton, Bathurst, Orange, Toowoomba, Armidale NSW, Ballarat, Darwin or even Kalgoorlie. Remember though, this requires just as much research and consideration as any other investment.