PDA

View Full Version : Dunedin for student flats



whirly
22-05-2009, 11:11 AM
My daughter plans on going to Otago Uni in 2013. I am looking at buying a flat down there before then so she and her mates can pay it off and she'll come out of varsity with qual's and an investment.

Any advice re: areas to buy and how to approach my research. I have not owned investment properties before. My motivation is to have her paying her rent to herself through ownership.

thanks
whirly

minimoke
22-05-2009, 11:29 AM
Step One - get her enrolled in Kiwisaver. After three years she'll get $1000 a year up to $5,000 for a deposit subject to simple criteria. (and so should her mates!)

Step Two - Check out Welcome Home loans. $200k loan with no deposit!. Plus if you want to borrow more you need 15% deposit over $200k.

Step Three. Knowing the "free" benifits in the first two steps for a privately held house, get accounting advise on an alternative which could see the house run as a "business".

whirly
22-05-2009, 12:29 PM
Thanks MM for the practical advice.

I wasn't aware of welcome Home and will refer a young couple I know who are struggling away trying to raise a deposit before house prices take off again.

Kiwisaver will be easy and so will seeing my accountant so cheers.

More ideas on how to make this a success welcome.

w

AMR
22-05-2009, 08:02 PM
In fact I went to apply for a welcome home loan just today. They don't need a deposit but will require adequate loan servicing income. They also will ignore all potential income from flatmates (not at 70% of the projections, not 50%, zero!!).

[I had a grand plan of buying a 3 bdrm house and paying off the mortgage by using flatmates but obviously I still need a deposit.]

Get to know the areas around tax deductions - they make investment property far more attractive than the yields would suggest.

STRAT
22-05-2009, 10:37 PM
seeing my accountant so cheers.

More ideas on how to make this a success welcome.

wHave a chat with him about one of these too Whirly. ( LACQ )

http://www.companyformation.co.nz/laqc.html?gclid=CLaHtK3qz5oCFQ6jagodZ0072g

fungus pudding
22-05-2009, 10:57 PM
Have a chat with him about one of these too Whirly. ( LACQ )

http://www.companyformation.co.nz/laqc.html?gclid=CLaHtK3qz5oCFQ6jagodZ0072g


I'd suggst using two stones to kill these two birds. Rent a place in Dunedin, and invest in something better to own than a student flat in Dunedin. The vast majority are very old, very high maintenance villas. Although a few units have been built in recent years, they usually are cramped with maximum permitted site coverage and small bedrooms. Remember students tend to study and almost live in their bedrooms. Renting rather than owning allows flexibility to move to the best location after the first year, and it's much easier to sort out flatmates as you can shift or swap flats mid-term or year. That's common. It is not easy to boot out a flatmate you don't want.

AMR
22-05-2009, 11:23 PM
Not to mention that with villas, banks and financiers are very tight on their criteria, I mentioned terraced houses and they said they would only approve finance on the recipet of a builders report.

Sideshow Bob
23-05-2009, 09:25 AM
Generally it is seen as 'desirable' to go for the Halls of Residence in the 1st year. Just out of home, all meals cooked, a couple of hundred instance friends who are all in the same situation - much easier than flatting with 'randoms'. 2nd year invaribly many students like to flat right near the campus in the party streets like Leith & Dundas street. Previous comments about quality of housing are correct, with some newer units being built of late, but many in the immediate area being poor quality, with price based strictly on yield, rather than quality. Maybe consider the lower part of North East Valley, as out of the main campus, but still lots of students, supermarket etc, good bus connections, walking distance and a bit cheaper.

You've only got 4 years to prepare yourself......

Steve
23-05-2009, 02:29 PM
Of course, if you were to consider North East Valley, make sure that it is on the sunny side!

My first property purchase was a villa in Maori Hill that I rented out to senior students. Personally, I wouldn't rent to 1st/2nd years based on what I was like in my earlier days...

Abracadabra
23-05-2009, 03:39 PM
Hi Whirly, I thought very seriously about doing the same thing a couple of years ago. I have two kids there at the moment, and it seemed an ideal opportunity. We decided against it for a couple of reasons. I know another set of parents who had bought a property there for their children a couple of years previously, they decided after a couple of years to sell the property. The kids found it too much of a hassle organizing flatmates, also they found the responsibility way too much of trying to keep the flat in some sort of order!

whirly
24-05-2009, 03:56 PM
Thanks for your excellent replies. The consensus of all of this seems to be that my daughter would be better off renting for a few reasons. I agree that the first year in a hall of residence would be a good start but after that its either of to partyville or paying a landlord top dollar to live somewhere conducive to studying and starting off adult life, establishing good networks and relationships etc. Time will tell but I don't think she's going to be part of the party-animal scene.

Yes I have concerns about her dealing with the responsibility but if it was getting to her I could perhaps get a property manager. (obviously this factor would have to be accounted for before making the investment).

You have to find flatmates you can live with regardless of whether you rent or own the flat anyway so hopefully she will fall in with the right crowd.

A few of you have also led me to some very good resources regarding property investment in general, thank you. Whatever happens if I am to purchase an investment property anywhere then its stuff I need to know.

On that I will leave my next question for a separate post.

cheers

W

whirly
24-05-2009, 04:00 PM
Rent a place in Dunedin, and invest in something better to own than a student flat in Dunedin.

So...whats a better to own than a student flat in Dunedin?:confused:

fungus pudding
24-05-2009, 04:28 PM
So...whats a better to own than a student flat in Dunedin?:confused:


There are quite a few commercial property deals around. Proportional titles are syndicates, and returning around 10% cash - paid monthly with usual tax deferred, and an investment of $50,000 usually, although some are $100,000. Buy a mixture of these and generate a real income. Better still are listed property trusts which are currently being given away. They are all PIEs so that's a big advantage if you are a 39% taxpayer. e.g. Goodman property trust is returning 12.5% after tax. Difference is that you can generate the equivalent of a wage for around 400,000 with these things, remembering the tax advantages. That's not possible in residential stuff, and certainly not in the Dunedin student market.

Dr_Who
25-05-2009, 09:24 AM
Never rent to students. If you have to rent to them, better to rent to the medical, pharmacy, science students. Dont rent to engineering, commerce, law students. Talking from experience as a landlord.

Billy Boy
31-05-2009, 03:00 PM
I put three boys though Otago uni.
All started with a hall of residence for the first year.
Then went flatting.
The advantage with H-o-R in year one is they make their own group of
friends. This group will generally stick togeather all the way through uni.
Get their own flat etc. My kids still keep their groups togeather. Did
their O,E's as one etc. Even give free advice etc to one another.
Lawers, Accounts, I.T's, so on. I have no regrets in that respect and
it's how I would do it again.
Whirly...Buy a house if you must but do it in the second year and it
does not need to be on Campus as your kids will have that sort
of crap aged out buy then. Or they will know what they want..?
I am pleased I did not buy a house as my kids went their (3) own ways.
Two have Hon's Deg's in science & the other is a well known animator.
Cheers BB

lissica
01-06-2009, 11:34 PM
Maybe consider the lower part of North East Valley, as out of the main campus, but still lots of students, supermarket etc, good bus connections, walking distance and a bit cheaper.

You've only got 4 years to prepare yourself......

North East Valley is great...a bit of a longer walk but most students don't mind. We chose to flat there as students because the flats tend to be a bit nicer and quieter than the main student ghetto (Leith, Castle, Dundas Streets spring to mind). The houses in those streets are awful.


Never rent to students. If you have to rent to them, better to rent to the medical, pharmacy, science students. Dont rent to engineering, commerce, law students. Talking from experience as a landlord.

From my experience...it was the Arts and Science students who had the worst flats. Med Students...most of us were pretty tidy!

Agree with above comments about Halls of Residence...it's a great experience for first years and they miss out if they go flatting directly.

Yossarian
02-06-2009, 03:18 PM
I wouldn't buy one.

I went to Otago for 5 years, finishing in '98. I lived in some right dumps, and the landlords just didn't care. You need to have that mindset to own student flats.

Also more importantly, your daughter will resent you for it. Give her her freedom, let her have fun, don't get involved.

Halls of Residence are ok - I did it for my first year and made a few good friendships. Certainly for 'freshers' they are not a bad idea to 'orient' yourself to dunedin and university more generally. But never never never go back for a second or third year. I knew one guy who was in the Hall for 5 full years (his entire tenure in Otago)... I'm sorry, that's just plain sad. That said, he now makes close to a million a year.... hmmm.....