Thoughts on student rental accomodation

[johnny1230]

Hi, all

Does anyone have student rental houses?
Are they good positive cashflow or are they quite hard to manage?
What problems do you normally face with students as tenants?
Have any of you built specific garages onto the property for extra rooms & income?

Any info on this subject would be great.

Thanks

[Cassandra]

Hi Johnny

Student flats can be harder work to manage & oversee with more care required to perform regular inspections. Housework lawn mowing & rubbish removal are not typically high priority for students ;-) I have teenage daughters myself and have had to train myself to not "sweat the small stuff" when they leave all their clothing -clean & dirty- in piles over the floor & school papers strewn from one end of their bedroom to the other -and unless it's putrefying organic matter-I think a landlord must also accept some untidiness & a housekeeping standard that is less than their own. As long as it is superficial - "Judgement day" is always the final inspection when I expect restoration to the clean & tidy standard the property was let at.(I have been pleasantly surprised to find a vacated tenancy left in a better condition than throughout the tenancy) I think too that a landlord should be realistic about a higher wear & tear -simply for the amount of "foot traffic" and the number of adults sharing common living areas, kitchen & bathrooms. Student flat parties can be a nuisance to the neighbourhood and cause property damage. Typically students are young, carefree, and hell-bent on having a hedonistically good time in between study and part time jobs- but having said that I have met some impressive young people that take their responsilities seriously and want to prove themselves & retain good references for thier future.
Some "babysitting" maybe required as they lack life skills & experience to deal with commonsense matters such as setting up utility accounts & knowledge of such things such as changing blown fuse wires & and they are ignorant of property maintenance concerns, omitting to report anything that does not impinge on thier direct & immediate comfort. Regular inspections are a must. Relationship breakdowns between "flatties" are common but I recommend having all tenant parties "jointly & severally" nominated signatories on the Tenancy Agreement as it spreads the liability for arrears & other costs rather than pursuing just the one "head tenant". However when the "flatties" keep changing this can be extra work in updating the bond with "change of tenant" bond forms & amended Tenancy Agreements. Some tenants try to pay their rents in individual share parts to my account - I dissuade this as i really am not concerned with who has or hasn't paid rent for the group and they need to get the mindset that they are a collective partnership. I recommend that the tenants themselves have a "Flat Share" Agreement and pass them a template that I poached from Victoria University's website - this agreement is between the tenants for allocation of other flat utility costs and how they operate their flat "kitty" accounts. More importantly, their weekly or fortnighly rent A/P is more likely to be honoured before any other bills are to be met in the event that a single tenant hasn't paid thier share to the rent account. Student tenancies have a higher turn-around and to avoid the risk of tenants giving notice at the end of the school year, leaving the awkward months of Nevember/December with propertiy vacancies, most landlords insist on a 12 month fixed term.

Students can be a greater risk of being a defaulting tenant as depsite a landlord doing credit checks the young person may have no or little credit, or past tenancy history to report. Some landlords request parents/gaurdians to sign as Garantors- check out the document factory & this would be an implication especially for tenants under 18 years of age (refer: Minors Contract Act 1969)

However, yield can be worth the extra diligence required as demand for a well located flat is very good in the early months of the year & a premium rent can be achieved owing that the student rental market is hot & the total rent is apportioned whereas the same rent value maybe out of reach for a 1 or 2 income family in the same area.

Good Luck
ps- if you need student or other rental property managed in Wellington-feel free to send me a PM :-)

[pgflt]

Overseas Students

For what it is worth, we run a 5 bedroom, 2 bathroom house with communal kitchen/dining/laundry facilities in Nelson, close to the polytech and downtown and achieve excellent returns with less hassle than we expected. All our rooms are fully furnished plus linen and towels and have ADSL broadband connections. Students pay a weekly rent per room, which includes power, cleaning of common areas and lawn mowing. We have had a mix of New Zealand, US, German, Chinese, Korean, Malaysian and Ziimbabwean students, with minimum stay of at least 6 months. We achieve around 12% return, and having 5 income streams there is always good cash flow. Rooms generally pass on by word of mouth. This may reflect the above average condition of the property. Management involves more time than our other conventional rentals, but considering that room rates vary from $125 to $200 per week, the effort per dollar of income is proportionate.
This property will be on the market shortly, as we expect to be moving overseas. Enquiries welcome.

[johnny1230]

Is it fairly easy to install asdl ethernet points into each rooms?

[Jai]

Hey johnny1230, yup. The easiest solution to an existing property that you aren't relining walls is to install wireless. A wireless ADSL router is needed or an access point and then likely a USB adapters on each PC that doesn't have wireless inside. Costs.. could do it for $2-300. If you're a bit PC savvy you should be able to do it yourself.
Cheers Jai