Student Accomodation

[feimao0724]

Hi guys,

I am wondering are there any capital growth potential for student accomodation ? (normally such student accomodations have high rental yields)

I don't expect the CG for such accomodations is great, but can it go negative in several years time?

Any thoughts are welcome.

Thanks.

 

[Xenia]

If it is a normal house that you are renting room by room it should have the same capital appreciation as any other property.

If it is a purpose built multi-let property then the appreciation will depend on the commercial demand.

 

[Rob Williams]

Any thoughts are welcome.

Are you talking about the purpose built high density buildings run by Unilodge etc?
If you accept the proposition that 40% plus of CG is driven by owner occupier demand, then, arguably such apartments will suffer the same CG issues as serviced apartments under contract to Sebel, Oaks etc.
Because Owner Occupiers are cut out of the market, you are left with a large number of specialisd rental properties being available to a small % of the population. The laws of supply and demand are not conducive to the same level of CG you will get for a similar property to which OO's can bid.
The high yield is partly a function of the low entry cost.
Having said that, I have been looking at serviced apartments with fresh eyes recently, with a view to maybe adding one (or more) to my portfolio, maybe even my SMSF, so I get a balance of positive and negative cash flow.
Not sure if I've answered your question or not, but I had fun trying