Hi yc85
Welcome to the Forum!
There is nothing wrong with studio apartments as such, but there are a number of factors which you should consider:
The property you are considering has a ‘rental guarantee’. Does this mean that it is Student Accommodation? The lack of car parking would indicate this as overseas students (the target market) rarely, if ever, have cars.
If so, lenders treat this type of property as a Commercial deal, and the most you pay be able to borrow would be 65%.
This would mean you would have to contribute 35% ($70,000) plus stamp duties and costs. Can you afford to do this?
Student Accommodation cannot be rented on the open market. It can only be rented to registered students. This can severely limit your capacity to rent it and if the management company is not efficient, could leave you with ongoing vacancies. Could you afford that?
If it is not a student accommodation arrangement, then 20 square metres is not going to appeal to many people, if at all. 20 square metres is a bed-sitter, not even a studio, and would rarely appeal to anyone wanting permanent accommodation.
For $200,000 you would be able to buy a standard flat capable of being rented to a broader market than just to students. As you are not earning an income right now, it would be somewhat perilous to enter into a binding contract for two to three years ahead.
Having said that, my son bought a student apartment off the plan when he was 16 & half. The building was not completed until he was 18 & four months, but in that time he had saved very little extra money and his earning were still negligible. We managed to structure a deal but it involved using the family home as equity. Would you have a similar back up plan?
It is important to be enthusiastic but it is more important to be practical. Student apartments and serviced apartments are more for the Claytons investor – they are the property investment you make when you don’t want to be a landlord. They involve large amounts of cash and / or equity and while there is the promise of continuing income, and capital growth will generally happen as with almost anything to do with property, they can be the devil to finance and take a considerable time to sell should you ever want to do that.
You may care to cut your teeth on the research for this one, but from the somewhat sketchy reasons you have given, it may not be the most appropriate investment for you at this time.
Cheers
Kristine