A Positive Spin for Investors On Dunedin Hyde Street Keg Race

Posted on Tuesday, September 10 2013

Dunedin University Investment Property – Hyde Street Keg Race.


Recently the annual Hyde Street keg race made national news after a group of students decided to test the structural integrity of one property’s roof and it failed. As a result many landlords have been pressing to get the keg race banned. It appears those efforts are falling on deaf ears and the tradition seems set to continue for years to come.

Instead of complaining, landlords of Hyde Street flats should be walking around with a constant grin from ear to ear because their investment business just gained huge publicity that has very effectively hit their target market and, if used to their advantage could prove to be very profitable.
It would be fair to compare what is about to happen to Hyde Street with what happened to Castle Street a few years back. In 2005/ 2006 it was very difficult to tenant a flat in the campus area for above $105 a room per week. There was a psychological barrier at $100 per room and you would see many flats advertised at $97, $98, $99 as landlords tried to get every last dollar they could without deterring prospective tenants. Come 2007 you would have struggled to find a flat on Castle Street renting for less than $115 a room and many were at $120+.
Currently on Hyde Street there are a large number of flats tenanted at less than $110 and I know of a few that are at $100 a week. Hyde Street is barely half the size of Castle Street and there is about to be a fairly significant increase in demand for flats there as students look to be a part of one of the last scarfy traditions left at Otago University.

There are now a small number of flats in the prime campus area renting at over $150 a room. Quality 3 and 4 bedroom flats are in high demand and low supply. It’s safe to say that once rent gets over $130 per week, parents generally play a greater role in paying the bills. A student’s main priorities are location, the condition of the kitchen and bathroom, whether or not there is a heatpump, and perhaps the size of the bedrooms. These things help you achieve rents of $125 – $135 a week. But if you want to be getting rents of $150+ then you need to give the students a valid argument that will convince their parents to pay an extra $30+ a week for your place rather than paying $120 for the place next door. Now what is the one thing parents fear more than anything else when their child goes to Otago University? It’s that they will rush in and sign a lease for a cold, damp, leaky flat. If you can offer a flat that is double glazed, insulated and has a heatpump then you are well on your way to achieving rents that most would have thought unattainable 2 years ago.

To summarise, in my opinion the best investment one could make in the Otago University area at the moment is a 3 or 4 bedroom flat on Hyde Street. The returns will be very pleasing if you just maintain the property but you will be laughing all the way to the bank if you invest money in the right upgrades.

By Matt Cutler Dunedin University Investment Specialist.


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Expert's Bio

Matt Cutler

In 2005 while studying law, economics and history at Otago University, Matt started working part time as an assistant property manager. In 2006 a full-time roll opened up and he has been managing student properties ever since. In late 2011 Matt started selling University Investment properties and achieved record sales within the first 12 months. He has now developed a position as a respected advisor in the industry.

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