In this New Property Australia Case Study A client was seeking their first investment and was looking for a high yielding property that would enable them to receive a positive cashflow.
Rooming houses offer the opportunity to lease each lettable space separately. By doing this, high yields are achievable, and in some cases, 10% or better may be possible.
Whilst each habitable space is self-contained, under Rooming House legislation there is a requirement for a common area that includes 1 shared laundry, kitchen and living area which allows the higher returns to be achieved. This does vary from council to council. Rents achieved from this type of dwelling are far higher than letting a single house in the same location.
Rooming houses are managed by specialised and experienced Property Managers, who have each tenant sign a separate lease. Each lettable space is self-contained and includes an ensuite, small living area, kitchenette, and sometimes may have external access. The maintenance of the shared areas, plus the costs of water, electricity and Internet are the responsibility of the property owner. A Rooming House is a residential dwelling that is certified as class 1B, and specifically designed for separate tenancies. In Brisbane City Council Area, a Rooming House has a maximum of 5 lettable areas, with a maximum of 5 unrelated parties, and a total floor area no larger than 300m2.
Critical to any property investment is the delivery of a return on that investment. Rooming houses are uniquely strong as a type of property investment. Not only do they offer a high yield, but also Capital Growth. This is for multiple reasons:
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There is massive demand for Rooming House rentals from young professionals. These means that Rooming House property investments have a very low risk of vacancy.
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For many, the goal when considering property investment is to reduce their reliance on their active income. Rooming houses are a fantastic source of passive income. For many New Property Australia clients the goal with rooming houses is to buy a few of these and then retire and live off the income these property investments produce.
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The team at New Property Australia is readily available to discuss your property investment goals and what the next steps in your property investment journey should be.