Building studio apartments using 'boarding house development'

WARNING : I dont have too much experience in property management/development etc but just a thought i had, posted this up more as a discussion thread and to get feedback of my idea.

Just had a look at the AAHSEPP in regard to supporting new generation boarding houses and was wondering if this could be used as an avenue in building studio apartments.

http://www.planning.nsw.gov.au/Port...HSEPP Fact Sheet - Boarding Houses 200511.pdf

Positive from what i read :
_could be built in zones considered R2 as long as within close to public transport
-$10,000 grants per room (paid over 5 years)
-Notsure if this apply if to be built in r2 zone but additional 0.5:1 FSR
-Legally rent out to multiple unrelated tennants
-Higher rental returns than conventional house (and/or granny flat rental)

Negatives:
-Cannot be sold off individually (strata title etc)
-25 sqm per room (4x6.25 room could be ok for a small room with kitchenette and en suite for student/single accommodation)
-Needs a onsite manager if 20 + residents (would not consider building this many rooms)
- Needs a communal room if 5 or more rooms (not a big deal)

Im guessing in construction the main cost difference would be fire rated walls between rooms and the amount of en suites and kitchenette. Though if i was going to build i would cheap out on quality of bathrooms/kitchens just providing basics and maybe floating laminate flooring.

Also if designed correctly could the purpose of dwelling be changed to a residential property down the track (maybe 5-10 years) with internal arrangements changed?
 
sorry misworded the last part of my original post

meant to say if designed to look like a normal house from outside
then would there be any issues of converting it back into a single dwelling in the future (as long as it meets criteria of the single dwelling) - i know it wont be that simple but a lot cheaper than knocking down the house completely and rebuilding.

Thanks Scott No Mates
I did have a look into insurance and other costs involved when renting but guess that would just have to be factored into the return i guess
 
I saw a property near Uni of Western Syd, close to Penrith.
A 3-4 newly constructed boarding house mainly for students on a 550m2 block, total 8 Units on single floor, some 2bed, some 1 bed units...combined rental is about $1500/week.
managed individually by Agents. vacancy are around term breaks which is Jul and Dec of each year.
no idea the total floor size or cost of build is...
 
I saw a property near Uni of Western Syd, close to Penrith.
A 3-4 newly constructed boarding house mainly for students on a 550m2 block, total 8 Units on single floor, some 2bed, some 1 bed units...combined rental is about $1500/week.
managed individually by Agents. vacancy are around term breaks which is Jul and Dec of each year.
no idea the total floor size or cost of build is...

This could be the one I saw. Looked like a house, but was a boarding house. All the rooms come off a central hallway. They got NRAS entitlements on it as well.
 
Thanks for the replies

Yea the areas i was looking were based around UWS universities (penrith and macurthur campuses) which were also near hospitals (maybe nurse/intern tennants as well)

would Skater or RetireRich101 have any more detail on those ones near penrith?

Also as to why would i want to convert them back to low yield property would be just as back up plan incase the boarding house setup did not work in future (eg closure of uni etc)
 
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