Buying a cheap studio in unilodge, broadway, sydney, too good to be true?!

[joshboy]

hi again,

yes I do agree with that- i have told my finace guy that unless i can get a LVR >90% then i am not interested in it- and it then becomes CF+

also I will not be concerned about the resale value as I intend to hold for a very long time howver I do see that if/when the time comes to sell it will be more difficult.
if i hold for 20+ years circumstances with lenders/ zoning etc might change-

are there any other things to look out for?

if you think im mad please don't be afraid to tell me.

 

[Swany]

Hey not sure of your budget but have a look in the December "Your Investment Prop." mag. Page 19 touches on Haymarket & Surry Hills.

Overall the mag has some good reading as to suburbs to look out for.

Good luck

Swany

 

[Rolf Latham]

Hi Josh

90 % , you might find a fringe funder that will entertain that.

I know the resale isnt an issue to you, but it is to other buyers and hence the funders it is

ta
rolf

 

[Property Meister]

hi again,


also I will not be concerned about the resale value as I intend to hold for a very long time
if you think im mad please don't be afraid to tell me.

a question, if somebody told you that in 20 years time, it would be worth the same, would you still buy it?

 

[ELM]

UniLodge Melbourne

In melbourne they have bought the rights to some apartment blocks that are bigger (2 b/r = 4.3 squares) and despite sub-standard cleaning/maintenance the apartments have increased from $190,000 to $210,000 in 12 months. Wondered why. Looked around. Students are flooding into Melbourne because the Aus dollar is so low (and will go lower with an interest rate cut).

Conclusion: Student apartments = great return and capital gain NOW, in a recession, but not in a growing economy (shares are then much better).

There are worse deals, but my advice is ALWAYS check the State law files for legal claims, and hassle the real estate agent to give you the details you are entitled to.
Here VCAT has TONS of litigation involving UniLodge and Colliers. Look it up.
Same with "Arrow on Swanston" (maybe worse). The OCs are effectively not functioning and everyone is sueing everyone else.
It appears that there is a LOT of money to be made managing Owners Corporations and their assets, pity the owners!

 

[PrimeCommercial]

In melbourne they have bought the rights to some apartment blocks that are bigger (2 b/r = 4.3 squares) and despite sub-standard cleaning/maintenance the apartments have increased from $190,000 to $210,000 in 12 months. Wondered why. Looked around. Students are flooding into Melbourne because the Aus dollar is so low (and will go lower with an interest rate cut).

What happens when the $AUD goes back up? the price of the units goes back down to $190k

 

[boomtown]

Some students are pulling out because Mama-san and Papa-san cant fund their Australian adventures anymore due to the GFC.

 

[tess85]

Hi! can i ask why you say to avoid the units in Chippen Street?

they seem pretty good to me.

I notice a few popping up on the market but they've been there for months now!!
http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2008019386

sure, the yields sounds great, but the management fees will be very high.

As an aside, I saw this Parkwood QLD ad the other day

http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2008006643

is this just of the same variety as unilodge / chippen st apartments? (not familiar with Parkwood QLD area)

 

[Deltaberry]

Unilodges are great. I would live in them any day.

 

[BobbyGee]

Risk v Return

I'm in the mortgage broking business and the lenders are well aware of the risks hence low LVR's. Second/Third tier lenders will accommodate you as long as you can repay and BTW you be charge premium interest . However the catch at the end is sale time. In Melbourne there is a, as George Bush would say " a brazillion" of these units in Footscray - great yields but no CG. If it's too good to be true - move on!

Just my 2 cents

 

[Asashoryu]

I too looked at Student accomodation as a cash cow opportunity. The ones tess85 linked to in Parkwood down the Gold Coast look similar to the townhouses I checked out at the Sunshine Coast around Sippy Downs area. They were 4 bedders 4 bath and once again in a big student accom area. On the outside they looked ok but going deeper they are rented for about 45 weeks per year then unless you can swing some holiday rental time you lose rent for the remaining weeks over Xmas. The BC and letting pool costs arent exactly cheap, cant recall what % management they wanted. As someone else said, they are hard to sell if you want out and if you encounter times like now where the $A is so high, overseas students cant afford to splash the cash. I prefer the option of a house in the same area and advertise specifically for students to fill each room. Keeps you out of the letting pool and lets you lock in 12 month leases so no down time. Also lets you rent to anyone if student demand lowers.
Just my 20c worth.

 

[Propertunity]

I prefer the option of a house in the same area and advertise specifically for students to fill each room. Keeps you out of the letting pool and lets you lock in 12 month leases so no down time. Also lets you rent to anyone if student demand lowers.
Just my 20c worth.

Excellent advice and 10 x better than 2c worth

 

[pinotedesco]

Hey mate
I bought an investment studio apartment last year in East Melbourne and I have enjoyed some capital growth as one opposite me sold for $205,000. I paid $175,000 for my one so I am pretty happy. When I was purchasing it I was looking at getting one at the unilodge also and just found them to be pretty useless in terms of capital growth. Any everyone else on this forum seems to make the valid points and reasons why I did not go down that path. Finance was a bit of pain for me also I had to save $25000 as I could not get the entire amount. If you are going to go down the path of a studio apartment go for a larger one where you can add a possible wall to make it a 1 bedroom apartment, I am looking at doing that as my buyers agent friend believes it will add value.

These investments usually are hard to finance ( which suggests if the banks arent willing to lend on it then thats a worry) and also generally have good incomes but poor capital growth.

I would advise talking to a relevant property professional / investor / valuer or buyers agent in that area to dig deeper into the research on that investment before buying.

 

[JohnHenry]

Dear All

I recently was looking at some studios in the unilodge on broadway, in sydney. They appear to be an excellent purchase, with great returns. However, there's so many units on sale, each with great returns that it almost seems like a trap....my gut instincts always tell me that if it sounds too good to be true, it probably is....hence im turning to the members of this forum whom might be able to shed some light on it.

Cheers!
wwwqi

Yes they're so tempting mate, I just got a call from an agent which said that they have cheap unilodge to sell (about 11+ units they have).

all of them ranging from $116k up to $300k.

can anyone share your opinion and comments about this type of CF+ IP please ?

Thanks.

 

[Aaron_C]

Let's get this straight - Student Accommodation units/apartments are a terrible, terrible investment. Houses that can be used as student accommodation, on the other hand, can be great investments as rooming houses. But not purposely-built ones.

 

[RightValue]

the apartments have increased from $190,000 to $210,000 in 12 months. Wondered why. Looked around. Students are flooding into Melbourne because the Aus dollar is so low (and will go lower with an interest rate cut).

!

Herein is a good point.

The reverse is now very much true.

Overseas student numbers are dropping like a stone.

The $A has risen dramartically and given that this is one of the most expensive countries in the world in which to live, students are going elsewhere.

You can live in America at nearly the same cost as a third world country in many respects and the tuition fees are probably nearly the same for many foreign students now.

If they cannot rent out the apartments, who do you think will wear the income loss? The investor or the $2 shelf company who guarantees the rental?

 

[Terryw]

My friend was trying to sell a unilodge apartment, near syd uni, 13 years ago for $120,000. Great capital growth! worth $130,000 now?

 

[travelbug]

Yes they're so tempting mate, I just got a call from an agent which said that they have cheap unilodge to sell (about 11+ units they have).

all of them ranging from $116k up to $300k.

can anyone share your opinion and comments about this type of CF+ IP please ?

Thanks.

Why are you writing this today when yesterday you posted about it and everyone said "RUN". I thought you'd "seen the light"???

 

[Mick C]

Yes they're so tempting mate, I just got a call from an agent which said that they have cheap unilodge to sell (about 11+ units they have).

all of them ranging from $116k up to $300k.

can anyone share your opinion and comments about this type of CF+ IP please ?

Thanks.

ummm there are 10+ post answering your question 2 years ago...and you ask the same quesiton...answer is still the same; sorry

P.s if anything the prices now are cheaper then they were 2 years ago + "expected " rent is higher....but as rightvalue mentioned; def less students because of the $Aus dollar.


Regards
Michael

 

[Aaron_C]

P.s if anything the prices now are cheaper then they were 2 years ago + "expected " rent is higher....but as rightvalue mentioned; def less students because of the $Aus dollar.

Dunno about Sydney but in Victoria all the real estate prices in those outer suburbs with lower-ranked universities like RMIT/La Trobe (Bundoora) have all taken a big hit because there are simply less (international) students so rooming houses are less lucrative.

That is why you need to purchase in places where the demand is always high for rooms, not just from overseas students but from locals too. Carlton/Parkville/Fitzroy are good examples of such suburbs in this State - I've experienced some fall in demand in my houses in these areas but vacancy rates are still 0%.