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Feasibility Case Study: 5+5 Year Rental Guarantee Co-Living – Morwell VIC

A couple in their 40s from regional NSW has made a decisive move to boost their income through strategic property investment. With two young children and increasing living costs, they’ve acquired their second investment — a high-yield co-living property in Morwell, VIC — designed to provide strong, steady cash flow from day one.


Investment Overview


  • Property Type: Co-Living House & Land Package (to be constructed)

  • Lot Size: 623 m²

  • Total Floor Area: 29 m² per unit

  • Contract Type: 2-Part Contract (Land + Build)

  • Total Price: $889,900

    • Land: $260,000 (with $15,000 rebate → net $245,000)

    • Construction: $644,990

  • Weekly Rent (Guaranteed): $1,750 ($91,000 p.a.)

  • Gross Yield: 10.23%

  • Rental Guarantee: 5+5 years at 10%+


Turnkey Inclusions


The property is fully furnished, with private outdoor areas for each room, a battery-ready 3.1kW solar system, and split-system air conditioning throughout. Common facilities include a dining area, laundry, fridge, and landscaped gardens with fencing and patios.

Year 1 Estimated Expenses

Expense Item

Amount

Property Management (7.7%)

$7,007

Letting Fee (2 weeks)

$3,500

Vacancy Allowance (1 week)

$1,750

Electricity & Water

$6,000

Internet

$900

Cleaning

$2,600

Garden Maintenance

$1,000

Council Rates

$2,500

1B Registration

$400

Solar Rebate

–$3,000

Land Tax Exemption

–$1,000

Total Estimated Expenses

$21,657

Year 1 depreciation estimate: $28,000


Finance & Growth Assumptions


  • Loan: $904,900 (100% debt)

  • Interest Rate: 7% (interest-only)

  • Holding Period (Land): 3 months

  • Construction Period: 9 months

  • Rent Growth: 5% per annum

  • Expense Growth: 2.5% per annum

  • Capital Growth Estimate: 7% annually

10-Year Capital Growth Projection

Year

Estimated Value

1

$889,900

5

$1,246,990

10

$1,563,935

10-Year Cash Flow Summary (100% Debt at 7% Interest)

Year 1

  • Rent: $91,000

  • Interest: $63,343

  • Expenses: $21,657

  • Depreciation: $28,000

  • Tax Refund Estimate: ~$10,200

  • Net Cash Flow (after tax): +$16,200


Year 5


  • Rent: $110,500

  • Expenses: ~$24,400

  • Depreciation: ~$22,000

  • Tax Refund Estimate: ~$8,500

  • Net Cash Flow (after tax): +$24,200


Year 10


  • Rent: $140,000

  • Expenses: ~$27,600

  • Depreciation: ~$15,000

  • Tax Refund Estimate: ~$6,000

  • Net Cash Flow (after tax): +$32,100


Scenario 1: 80% LVR


  • Loan: $711,920

  • Interest (Year 1): ~$49,834

  • Equity: $177,980

  • Net Cash Flow (after tax): +$28,900 (Year 1)


Scenario 2: Interest Rate Falls to 6% Post-Build


  • Interest: ~$54,294

  • Year 1 Net Cash Flow (after tax): +$22,700


Summary: Why This Works


  • 5+5 year rental guarantee at 10%+

  • Fully turnkey with high rental demand and depreciation benefits

  • Council rates and utilities included in conservative estimates

  • Land tax exempt (1B Co-Living)

  • Solar rebate included

  • Positive cash flow from Year 1 even at 100% debt and 7% interest


This Morwell co-living property delivers an ideal mix of high yield, strong after-tax cash flow, and capital growth potential. For this young family, it’s more than just their second investment — it’s a step toward long-term financial freedom.

 
 
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