Rooming Houses – Effective for Capital Growth and Yield

Rooming Houses are possibly the most effective high yielding property investment option currently available in the marketplace. At New Property Australia we firmly believe that Capital Growth and yield don’t have to be mutually exclusive. Rooming houses definitely offer the potential for both Capital Growth and high yields.

How Do They Work?

For those that aren’t yet up to speed with the concept. Rooming Houses are an investment property option that allow an owner to rent out up to 5 semi-self-contained rooms separately. Thus getting a much larger rental amount than a single house. Rooming Houses have some common facilities such as a large shared laundry and full kitchen. With each room having its own facilities including an ensuite and kitchenette. These purpose-built properties enable the investor to get phenomenal yields and, in most instances, the individual rooms are being let for between $280 and $320 depending on the suburb.

We have seen a number of these properties lately with rooms getting approximately $300 per room for a total of $1,500 per week and yields around 10 per cent have been standard.

Once built and with a yield of 10% owners often have the option of on selling their properties for profit as there are many investors seeking an established high yielding investment. Rooming Houses enable an investor to seek out a block of land in an area that has great potential Capital Growth and then maximise the yield of the property, enabling great income return and Capital Growth potential.

Much more effective than a standard house

The effectiveness of this investment concept was highlighted recently where we had our specialist property managers compare the rent for a Rooming House and a standard 4-bedroom house. The standard 4-bedroom house rented for $500 per week whereas the Rooming House was able to get 5 rooms at $300 per week for a total of $1,500. The house would get a yield of around 4.7% and the Rooming House a yield of over 10%.

So What is the Catch???

So what is the catch I hear you ask? Well……. The catch is that they are harder to put together and require a set of specialist skills and knowledge to come up with. But………. that’s where we come in. The New Property Australia team has a vast network of experienced contacts and consultants who are able to put together custom Rooming House packages for investor clients.

What Now?

If you would like assistance or would like further information on Rooming Houses please send through an inquiry below and we’d be happy to give you a call from our investment advisors. 

Or, if you’d like to speak directly with an expert Rooming House Builder Click Here.