We live very close to the University of Wollongong. In our street a number of four bedroom houses have been bought up by investors and turned into seven to nine bedroom student accommodation. Lounge rooms have been divided into two rooms, dining rooms and laundries turned into bedrooms. The local council says that is not a problem as they are not boarding houses. As we are retired and looking to move in the next year or so we are wondering if it would be a sensible move to convert our house into a nine bedroom student accommodation and use it as income. We feel however that it may not be legal even if others are getting away with it. If we sell our house it will probably be used for that very purpose. Surely change of use requires a DA as it is adding to major parking problems in the street? We live in a pleasant, leafy area but are finding that the investment houses are slowly becoming run down, lawns of some get mown infrequently and rubbish is often left lying around. It must be said that most landlords respond quickly to complaints about noisy parties (after 2.00am) but house prices seem to be lower than a couple of years ago. This may not be due to the student influx but just a general trend. Our area has many pluses, including the amenities provided by the university and the beauty of the local escarpment and proximity to the city, beaches and public transport. Just as a matter of interest what are the legal implications of converting a suburban house to student accommodation?
Boarding Houses
- Thread starter oricus28
- Start date
It is my understanding that it is fine to have student accommodation, however when a certain number of rooms is reached it then becomes classed as a boarding house & NOT shared accommodation. There are a number of quite onerous rules to be had for a boarding house that are not required for shared accommodation.
I can't go into specifics, (I don't know them) however I did look at purchasing a (legal) boarding house some time ago & decided that it would require more work than I was willing to do. From memory, once you have over a certain number of rooms you need a license, special insurances, special fire hoses & additional bathrooms & more.
I know there are some investors that have the maximum number of rooms allowable under normal shared accommodation & they do quite well. In fact my local PM has mentioned that they currently manage a few 4 bed houses that are rented out as shared accommodation & that I should look into it for one of my current IP's. In this situation I would not be creating extra rooms, but the yeild would increase considerably over renting out to a family.
I can't go into specifics, (I don't know them) however I did look at purchasing a (legal) boarding house some time ago & decided that it would require more work than I was willing to do. From memory, once you have over a certain number of rooms you need a license, special insurances, special fire hoses & additional bathrooms & more.
I know there are some investors that have the maximum number of rooms allowable under normal shared accommodation & they do quite well. In fact my local PM has mentioned that they currently manage a few 4 bed houses that are rented out as shared accommodation & that I should look into it for one of my current IP's. In this situation I would not be creating extra rooms, but the yeild would increase considerably over renting out to a family.
I don't see any legal issue, you'd simply be renting by the room instead of renting a whole house. That still falls under the Residential Tenancy Act.
I would however, seek council advise (in writing if you can manage to swindle it) stating that approvals aren't required to convert lounge rooms to bedrooms.
From what I've read here on the forum it is an excellent way to increase yield, however, is subject to seasonal factors.
I would however, seek council advise (in writing if you can manage to swindle it) stating that approvals aren't required to convert lounge rooms to bedrooms.
From what I've read here on the forum it is an excellent way to increase yield, however, is subject to seasonal factors.
Another thing I do recall now, thanks to Joanna mentioning this, is that with a boarding house, it doesn't fall under the Residential Tenancy Act, whereas renting by the room does.
in Adelaide, if you rent out 6 rooms or more individually, then you're classed as a 'boarding house' and would need to seek approval by Council.....then it gets messy with all the fire regulations etc that you would need to ensure the building complies with which may cost a bit more money.
having said that, many are renting out more than 6 rooms without council approval but that is the risk you must be willing to take should council discover your conduct.....worst case scenario in this situation is to kick out some tenants to make it not a boarding house and if the numbers on that worst case scenario still leaves you with a profit then its something that you might be willing to do (i'm not saying go ahead and break council rules! just do it at your own risk!)
i'd check with the council again....as you probably know, there's such a high turn over with council planners these days (well in Adelaide this is the case anyway) that the person you spoke to on the day may not be providing the most accurate info...i'd check 3-4 times at least if this was the reason for a purchase.
having said that, many are renting out more than 6 rooms without council approval but that is the risk you must be willing to take should council discover your conduct.....worst case scenario in this situation is to kick out some tenants to make it not a boarding house and if the numbers on that worst case scenario still leaves you with a profit then its something that you might be willing to do (i'm not saying go ahead and break council rules! just do it at your own risk!)
i'd check with the council again....as you probably know, there's such a high turn over with council planners these days (well in Adelaide this is the case anyway) that the person you spoke to on the day may not be providing the most accurate info...i'd check 3-4 times at least if this was the reason for a purchase.
In Victoria you have to get a "prescribed accomodation" permit for 6 or more individually leased rooms. This comes with regulations you must comply with but they are not too onerous, and the cost of the permit is about $185/yr and the council will inspect yearly.
For 11 or more rooms (excl Kitchen, bath , laundry, but including living rooms and bedrooms) you are considered a boarding house and then serious regulations kick in including having to advertise to get planning permission, fire measures etc.
For 11 or more rooms (excl Kitchen, bath , laundry, but including living rooms and bedrooms) you are considered a boarding house and then serious regulations kick in including having to advertise to get planning permission, fire measures etc.
