How maximising space can maximise returns

By Cameron Micallef 25 February 2020 | 1 minute read

Property investors looking to maximise the use of space available can look into co-living arrangements, according to an industry expert.

How maximising space can maximise returns

Designed as an affordable alternative in the space between serviced apartments and hotels, co-living can help singles, young professionals and students bridge the gap between leaving home and buying a property of their own. 

Managing director Franco Bevacqua believes a lack of affordability is pricing people out of the property market, making co-living arrangements as cost-effective and efficient solutions for consumers. 

The managing director also believes investors can win through this living arrangement, with co-living providing attractive yields to the investor, with units in Melbourne being rented out for $300-$350 a week, including bills.

“Most importantly, they are proving to be a very attractive income-generating asset from an investment perspective, with average returns of around 14 per cent at this point,” Mr Bevacqua said.

Mr Bevacqua believes the co-living arrangements can help bridge the gap in the market as build-to-rent struggles to catch on in Australia.

“Build-to-rent has been slower to take off in the Australian market, mainly through the length of time it takes to see any decent return. We don’t have those challenges with the Studio Home concept,” Mr Bevacqua said.

Instead, the property investor highlighted the lower risks and cost associated with the sector.

“There is no planning permission required, so therefore no planning risk (under the building classification), while the build cost is generally lower than commercial rates, with an average eight to 12-month build duration,” Mr Bevacqua continued.

Finally, Mr Bevacqua said the industry needs to look at co-living differently as it varies from anything else currently in the market.

“High-volume, high-density developments are the norm in this market, and so it seems that build-to-rent is only viewed through that lens, which is not a very innovative way to look at it. It’s a completely different investment proposition,” Mr Bevacqua concluded.

RELATED TERMS

Returns

A return refers to the change in the price of an asset or investment, usually represented in price change or percentage change.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your... Read more



How maximising space can maximise returns
How maximising space can maximise returns
spi logo

Get the latest news & updates

Join a community of over 100,000 property investors.

Check this box to receive podcast updates

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.