Investing for good – and profit

“Within the sustainability-themed investments, we found that housing – in particular, social, affordable and disability housing – has become a major investment theme for large institutional investors, attracting $41 billion in investments, only behind climate-related investments.”

A new kind of property investment

For individual investors, ASX data reveals residential property is the second-most popular investment after Australian shares, with 35 per cent of investors having at least one investment property in 2023.

However, in this space, to invest in a socially responsible way, investors have until now been limited to providing accessible accommodation for people with disabilities, and demand for that type of accommodation can vary, according to Moxin Reza, Founder of Investor Partner Group.

Investor Partner Group aims to help property buyers and investors make conscious, informed decisions to grow a sustainable and scalable property portfolio while improving their lifestyle through evidence-based investing.

Reza says the accommodation desperately needed now – affordable housing, including affordable rooming houses or houses with multiple occupants – is a way individuals can invest with purpose while also creating wealth.

PropTrack reports rental vacancy rates plumbed a historic low of 1.1 per cent nationally in September while national weekly advertised rents reached $550.

Anglicare Australia’s 2023 Rental Affordability Snapshot, meanwhile, reveals 0.8 per cent of rental listings are affordable for an individual earning the full-time minimum wage.

Co-living provides investor options

Reza says co-living houses – in which houses are built or converted to provide such private features as an ensuite and courtyard for every bedroom, with communal kitchen and living spaces – are increasing in popularity among tenants and property investors alike as a solution to the affordability crisis.

Unlike traditional shared housing, in which tenants may rent a room and share facilities, co-living spaces typically come fully furnished and with a house manager who not only enforces rental agreements but general house rules.

“[Of] sustainability-themed investments, we found that housing – in particular, social, affordable and disability housing – has become a major investment theme for large institutional investors, attracting $41 billion in investments, only behind climate-related investments.”

— Responsible Investment Association Australasia (RIAA) chief executive Simon O’Connor

Utilities expenses including electricity and internet are included in the rental fee, with security features such as cameras installed in communal living areas to enhance safety for tenants.

Multiple tenancies in the one property keeps costs lower for renters while also providing a balance between privacy and social connection. Multiple tenancies also mean investors can earn substantial net income, which Reza says can range post-mortgage between $30,000 and $50,000 a year.

“There’s a lot of talk about rental pressures, rental vacancies, building property shortages and not a lot of affordable housing being available,” he says.

“We’re trying to create more wins for the clients and also providing affordable housing for people.

“These are not typical student lodges or student accommodation, or motels; these are well-furnished, high-quality, multi-unit dwellings or co-living opportunities.”

He says they are ideal for people under the age of 30 or single women over 55.

“These are the two big pockets where we find a lot of renters and a lot of landlords don’t tend to give rental accommodation to them because they can choose tenants with small families,” he says.

“One of the silver linings of COVID-19 is that people appreciate relationships, and affordable housing with shared living is something that helps build on relationships.”

Lenders embracing the opportunity

Reza says lenders are warming to the co-living concept and are now more willing to liaise with property investors willing to invest in it.

“You can get the 80 per cent loan prime rate on these loans, you can buy one with $125,000 deposit, and even with the Ferrari of rooming houses – a nine-bedroom, nine-bathroom house, housing nine tenants and generating $140,000 in gross rental income – you’re still only parting with about $220,000,” he says.

“There’s a lot of talk about rental pressures, rental vacancies, building property shortages and not a lot of affordable housing being available. We’re trying to create more wins for the clients and also providing affordable housing for people.”

— Moxin Reza, of Investor Partner Group

“Previously, there was not a lot of lender appetite around this, and they wouldn’t provide loans, but we’ve convinced a lot of lenders to provide lending solutions in this space as they understand the risk better.

“Co-renting/rooming houses with multiple occupants is a niche where investors are providing affordable accommodation for people who are going to progress in their life and move out and leave the space for someone else. It’s used as a jumping ground for people to do better in life.”

To learn more, visit www.helpmebuy.com.au.