House + Flat = excellent yield.

[Dean1337]

If possible, would or could you add an extra fence to the property? Thus giving each tenant a little back yard of their own. Are there any concil regulation you must pass first?

About getting two bin services, wouldn't this raise suspicion with the concil and hence them asking some questions about it?

If you ended up removing a tenant because someone complained, is there any legal ramification since your tenant would have signed a lease agreement? For example, you've agreed to provide a place for six month but all of a sudden the concil has demanded that they leave. Would you need to provide accomodations until the agreement is over?

 

[scouse]

dual tenants

I have one of these. 50's house at front $185 and one bedroom self contained unit $110 at the back. Water can be separately metered, called an upstream down stream system, I haven't done it but spoke to the water board and didn't seem a problem.
Shared driveway is the biggest problem as the front tenant is very very fussy, been there over 5 yrs, doesn't like rent increases & doesn't like anyone else using "his" drive.
Back unit has had 3 different tenants in 4.5 yrs, maily due to front guy?
I great earner dispite the occasional hassles.

 

[Aimjoy]

If possible, would or could you add an extra fence to the property? Thus giving each tenant a little back yard of their own. Are there any concil regulation you must pass first?

Should have mentioned earlier that Yes I put up a little fence - no council issues - fence what you like.

About getting two bin services, wouldn't this raise suspicion with the concil and hence them asking some questions about it?

Nope, many - well not many, but a few normal households have an extra bin service - especially if they have a big family.

If you ended up removing a tenant because someone complained, is there any legal ramification since your tenant would have signed a lease agreement? For example, you've agreed to provide a place for six month but all of a sudden the concil has demanded that they leave. Would you need to provide accomodations until the agreement is over?

I dunno - its never happened to me in 5 years - sorry. Besides I think it could take some 'months' of negotiating with council back and forwards - thanking them for their letter and asking for some explanation and then getting some advice and replying back to them etc etc - all courteous but time wasting stuff, that could take you to the end of the 6 month tenancy anyway. After that we let them go month to month - so only need 30 days notice (I think) - so again no issues there. Remember councils machinery works very slowly.... I went to an auction recently of council selling private land & homes for unpaid rates. I know slightly off topic - but they have to be unpaid for 5 years to even start proceedings. One homeowner kept removing the "For Auction" sign and refusing inspections up till the day prior to auction and then came to some arrangement at the 11th hour.

Aimy

 

[Dean1337]

Once again I have to thank everyone who has contributed to this thread. Particularly Aimy, who has gone to the amazing effort of answering all my questions.

 

[Highlygeared]

I have a property like this as well, except the workshop at the back needs plumbing...which i could do without too much trouble - question is, can someone tell me if the house (to lease out ) may not be as marketable/hard to get tenants if the use of the backyard is shared?? Thats where the current w'shop/studio is. I mean i wouldnt like to go out on the yard and have kids play when there's some single guy out the back.

 

[Aimjoy]

Once again I have to thank everyone who has contributed to this thread. Particularly Aimy, who has gone to the amazing effort of answering all my questions.

You're most welcome, I hope its been useful reading everybody's different views on this.

Aimy

 

[Aimjoy]

can someone tell me if the house (to lease out ) may not be as marketable/hard to get tenants if the use of the backyard is shared?? I mean i wouldnt like to go out on the yard and have kids play when there's some single guy out the back.

Hi HG,

No the house is not as marketable - as mentioned earlier, the rental return for the house will be lower and the vacancy rates potentially longer for the reasons you've identified.

You have to weigh all that up with the improved return from the additional rent you get.

These things work best if you can fence off separate areas or if there is rear lane access so that they don't come across each other. But choice of tenant/s will help as well.

Aimy

 

[Dean1337]

You're most welcome, I hope its been useful reading everybody's different views on this.

Aimy

It most definitely has been.

 

[RedPanda]

I have a house plus flat which is currently my PPOR. It is near TAFE and a University of Sydney Campus. I am now thinking of renting it out and buying a new PPOR because of the very high yield potential. I have two options.

1. Rent it out separately to two tenants. (Potential income 350+200=550)
2. Rent it out to group of TAFE students or teachers. (Potential income 700-800)

I am more inclined for the second as it would generate much higher income but not sure of how it can be done and any issues with that. I intend to self-manage.

Has anybody done that? What are your thoughts on it?

 

[undercover]

I work in Town Planning Enforcement in Vic (council) and deal with these cases if brought to our attention. Like it has been mentioned unless you have a town planning permit for a seperate dwelling or sub it is illegal.

We find many REA don't advise this to its clients and often the way council finds out about such properties is via realestate.com because the agent does this great add stating in BOLD about the nice little granny flat out the back which can be rented out for $$$.

My advice is to obtain a permit for this practice because I have seen first hand trouble and expense which can occur.

 

[HiEquity]

I am totally amazed reading this thread at the attitude of some towards practices that are just plain illegal! Guys - it's not worth it - just get the permit for a second / third tenancy and operate within the law. Keeps everything sweet with insurances etc as well.

The "it's alright if no-one finds out about it" / "I'm not hurting anyone" arguments just don't stack up. There are very good reasons why these laws are in place and if you are going to play the game then play by the rules!

Rant over.

 

[Aaron Sice]

what's it cost for a permit....$88? $124? it's always some poxy amount - just get th elicense and be done with it.

what if there's a fire and it's not licensed? insurance may be void! what if someone dies in that fire now your insurance in null and void....?

 

[undercover]

The cost for a permit is $569 (cost of between 10K and 250K). (vic metro council)

The cost of the fine is $567.10 for a person and $1134.20 for a company/business, not to mention the added costs with termination of leases...etc. Not to mention the fact council may seek further penalty via the courts. (I have seen this happen)

Would also hate to think of the complications/consequences which may arise come Tax time if the property was deemed illegal and weather or not your deductions would be in breach of any tax regulations?

 

[RedPanda]

Guys, I am also of the opinion that everything should be done legally. Why are some people assuming that things are done illegally. I bought the house in question last year and it wasn't a very smooth deal with the vendor over something he committed but wasn't on paper (that's another matter). Within a few days of moving into the house, somebody from the council came knocking on my door saying that they have a anonymous complaint by somebody ( I suspect vendor himself made the complaint just to harrass me) that the house has a granny flat which is not approved and that it was advertised as dual income by the REA. I asked him whether it is not approved and he said he has to check that. He told me that he will get back to me on this and said that if it was not approved I have to get it inspected and get it approved. Till date he hasn't got back to me. Should I assume that it is approved? Anyway, even if it isn't I'll get it approved. But my question was regarding dual tenancy and renting out to a group of students. I don't know whether multiple students would sign one lease or can I sign multiple lease with them. Any advise on that front?

Cheers

 

[undercover]

Guys, I am also of the opinion that everything should be done legally. Why are some people assuming that things are done illegally. I bought the house in question last year and it wasn't a very smooth deal with the vendor over something he committed but wasn't on paper (that's another matter). Within a few days of moving into the house, somebody from the council came knocking on my door saying that they have a anonymous complaint by somebody ( I suspect vendor himself made the complaint just to harrass me) that the house has a granny flat which is not approved and that it was advertised as dual income by the REA. I asked him whether it is not approved and he said he has to check that. He told me that he will get back to me on this and said that if it was not approved I have to get it inspected and get it approved. Till date he hasn't got back to me. Should I assume that it is approved? Anyway, even if it isn't I'll get it approved. But my question was regarding dual tenancy and renting out to a group of students. I don't know whether multiple students would sign one lease or can I sign multiple lease with them. Any advise on that front?

Cheers

Don't assume anything, you would need to apply for a town planning permit, pay the fee and await councils decision.

Or apply to council for a town planning history report on the property which will show you all previous applications on the property to see weather or not it already has a duel occ permit.