Zoning in on rental success

Some parents go to drastic lengths to secure their children a place in a popular public school – including renting a home in the school zone without living in it.

Schools have responded with demands for more evidence of residency including asking to see recent utility bills and annual lease renewals. There are even anecdotal reports of school principals staking out rental properties in the evenings to check whether the home is genuinely occupied by the family.

There is little data on how much extra you can add to the rent if the property is in a desirable school zone but estimates suggest it can add 10 to 15 per cent to a property’s sale price.

According to Victorian real estate agency Noel Jones, a three-bedroom property just outside the popular Balwyn High School zone advertised at $460 per week would attract an extra $20 to $40 a week if it was located within the zone.

RentCover General Manager Sharon Fox-Slater said property investors wanting superior returns because of their position within a school zone should avoid properties near the edges of the zone.
“Some schools become a victim of their own success and shrink the zone so they don’t exceed their maxmum enrolment,” she said.

Property managers should be alert to the risk of tenants renting a home in a good zone but not living there.
“If a property isn’t occupied on a long-term basis, it can affect the landlord’s insurance cover. It also leaves the property more liable to being occupied by squatters. And, with no-one to report any damage, problems like leaking roofs go unchecked.”