How hard is owning a share house?

Anon_

Anon_

There is a large property coming up for sale soon (in Adelaide) which I am very intrigued with. The main house has 6 bedrooms, possibly a 7th and out the back there is a granny flat with 2 more bedrooms. So 8-9 bedrooms in total.

Is it ridiculous to you think you would get that many tenants, and would trying to rent each bedroom just be too much of a hassle?

Would much rather try to rent the home to a large family, but wouldn't imagine the rent be nearly as good. Although having a large family would be hard to find a large enough home, so they might pay a premium?
 
Not sure about SA but in VIC I was looking at this and you need to register with council as a rooming house which has it's own criteria. Not sure about renting to students under the table though :D.
I'm sure you could rent the main house and granny flat separately. Or rent to one tenant and let them sublet.
Check out your local council regulations.
 
Anon_ said:
Good news is it's close to both. Close walk to our biggest tafe and a maccas.

Would you usually have utilities included in the rent?
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I live in a share place (trying to minimise my expenses).

Landlord here pays the utilities because he can't be stuffed dividing it up, especially if people have moved in / out during the billing period.

People who normally live in share places (students) are people who don't want to pay bills and don't have furniture. Just want to pay one price and have it cover their room, desk, internet connection, utility bills...

I sometimes see shared places available for rent usually advertised by private landlords or through one particular agency. Me thinks that most agencies don't want to deal with it. Maybe I'll go talk to that one particular agency one day, they probably have experience dealing with multiple tenancies.
 
Friends son lives in one (8-9 rooms, extra large kitchen, 4 bath, large lounge/dining area) near UOW in Wollongong. Pay weekly rent (~$150) and gets a room, internet and all utiltities included).

I think tenants are based on social network of people from further down the south coast as they all seem to know each other.

So I suppose they get +$1350 pw rent on a house that cost $640K (source: onthehouse) plus what ever it cost to add an extra 2-3 beds and a bath (converted garage into beds, a bed to a bath - est $60K ) all within the existing structure.

Thats about a gross 10% return on my esimate although it may have higher maitenance and higher outgoings than norma but never any vacancies going on the current shortage reported in the local media for uni students this year.
 
Anon_ said:
Good news is it's close to both. Close walk to our biggest tafe and a maccas.

Would you usually have utilities included in the rent?
Click to expand...

Yes include all utilities. Sounds like you have a go-er then.

However - just be careful when it comes to finance - some valuers will value it as 'student accommodation' and the bank will run away so fast. To avoid this ensure that you don't modify the house too much - keep it looking like a house, both inside and outside.
 
Great, would definitely include all utilities then. Would this also mean that all utilities would be a tax expense then? Like it's a great property, but the only doubts would be because it is on a main road which is generally quite busy.
 
I know its stereotyping but generally the type of families that have 8 or so kids are not the type you want to be renting to.

Sounds like it could be an ideal setup for a caretaker in the granny flat and student accommodation in front.

Only problem with including utilities is then you can end up with them not caring about the amount they use. ie run electric heater all winter with the window open. Cost splitting is a bit more work but it creates a bit of pressure to not waste.
 
Anon_ said:
Great, would definitely include all utilities then. Would this also mean that all utilities would be a tax expense then? Like it's a great property, but the only doubts would be because it is on a main road which is generally quite busy.
Click to expand...

Yes the utilities would then be tax deductible. I wouldn't worry about a main road too much unless it is super-busy.
 
Check with your local council as to how many unrelated people can live in a property before it is declared a rooming house with resultant fire safety regulations to comply with.

Failure to abide by Council and Fire Services regulations could see your insurance voided in the event of an accident or injury.
Marg
 
Doovalacky said:
Only problem with including utilities is then you can end up with them not caring about the amount they use. ie run electric heater all winter with the window open. Cost splitting is a bit more work but it creates a bit of pressure to not waste.
Click to expand...

We get around this problem, by making it one of our property rules (we have about 40 rules).We also make them sign a separate paper (as referenced in the lease) stating if they open a window during our heating season, they will be evicted, and they agree to pay the extra utilities. We inform them when we turn on the heat, and again when it is shut off.
 
For those who do own a share house... mind sharing how many people are usually tenanted, what price they pay and average utility costs?
 
I'm guessing most student share houses are furnished? Also, are they self managed to maximise profit or do you still go through a property manager?
 
cimbom said:
I'm guessing most student share houses are furnished? Also, are they self managed to maximise profit or do you still go through a property manager?
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Self-managed....even if you could find a PM the fees would be so high to render the investment not worth your while.
 
I cannot understand the mentality of trying to maximise rent by flouting the rules on share houses.

Why bother building up an asset base only to risk everything you have should something happen that involves an insurance company. What happens if one of your students causes a fire (recent thread about this) and the place burns down? What happens if somebody dies? You will lose everything because the insurance company will wipe you, not to mention having to live with the guilt and anguish.

Of course, most illegal share houses never have problems of this magnitude, but what if.....?

I just don't get it.
 
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