Renting a house as shared accommodation

[h8dk97]

Hi there,

I'm thinking of buying a house and making it shared accommodation for students. The house that I have in mind is not in the proximity of any university but it is very close to the train station (direct line to one of the uni's), close to shops etc.

Has anyone gone through this experience, what are the pros and cons, what should I be aware of. Any useful info would be much appreciated.

Thanks in advance.

 

[Icarus]

I did this for a short period of time with a place I had in Rockhampton (Central QLD) a few years back.
Are you living close to or in the house to keep an eye on the students and the condition of the place? I found that property managers weren't that keen (at that stage - 5 years back) to manage this type of arrangement.

- Pros - higher rent when rooms rented out individually

- Cons - Had one group of students that "enjoyed life" a little too much one night and did a bit of damage to a few doors and walls. Insurance covered the repairs, but was still a bit off-putting as this was my first IP.
I know that I was a student once, and other people's belongings probably didn't rate too highly on my list of priorities either.

I would recommend that you put individual locks on each of the bedroom doors and look for places with more than one bathroom/tiolet (or at least seperate rooms for the two). Also, buy brick! It hurts more when they try to punch through it!

Overall, I have had worse tennants in other IPs. Stopped renting to students after long term tennants moved in and have been there ever since. Would probably do it again if the need/oppertunity arose.

 

[The Y-man]

Has anyone gone through this experience, what are the pros and cons, what should I be aware of. Any useful info would be much appreciated.
.

Quite a few post in the past on this, but for Victoria:

Make sur eyou know the legalities involved.

You come under the "Romming House" definition
http://www.consumer.vic.gov.au/CA25...ses?OpenDocument&1=83-Rooming+Houses~&2=~&3=~

The main points are:

You need to lodge a bond for each housemate separately.

The bond can not exceed 14 DAYS rent (not the usual 1 month)

You need to produce a condition report for each housemate

You can't charge for electricity, gas, water etc, unless they are separately metered to each room

You can not ask for more than 14 DAYS rent in advance (not the usual 1 month), and you must issue a reciept


As you can see, there's a lot more overhead to run it properly - one of the reasons we gave it up.

We also found that we were getting undercut by illegal operators - eg you'll often see ad's for super cheap rent, but with 1 month bond, and shared bills.


Things to be prepared for:

1. expect your house to run at 36 deg C during winter (heater will be on max with all windows open or aircon on if provided)

2. each tenant will also run a 5kW personal heater in each bedroom with window open (in an attmept to "stay warm")

3. washing machine to be run at full water load for 3 pieces of underwear

4. a car wash to be running in the front yard

5. time in the shower to be regulated by the amount of hot water in tank (goodness knows how they know when to come out for the instant hot water systems!!)

6. It is mandatory for all lights, TV's, appliances to be left on 24x7

7. Furniture and appliances in common areas will go missing. Tenants are liable for their room - not for common areas - so they will often go out locking up their room, but the front door will always be unlocked (even if there is no one home)



Cheers,

The Y-man

 

[h8dk97]

Thanks for your reply Icarus. What concerns me is that the property that I'm interested in is not very close to uni but as I mentioned it is a walking distance to transport. Do you think it would be a problem finding tenants? As far as I can see there are not many students in the area. Thanks again.

 

[h8dk97]

Quite a few post in the past on this, but for Victoria:


Things to be prepared for:

1. expect your house to run at 36 deg C during winter (heater will be on max with all windows open or aircon on if provided)

2. each tenant will also run a 5kW personal heater in each bedroom with window open (in an attmept to "stay warm")

3. washing machine to be run at full water load for 3 pieces of underwear

4. a car wash to be running in the front yard

5. time in the shower to be regulated by the amount of hot water in tank (goodness knows how they know when to come out for the instant hot water systems!!)

6. It is mandatory for all lights, TV's, appliances to be left on 24x7

7. Furniture and appliances in common areas will go missing. Tenants are liable for their room - not for common areas - so they will often go out locking up their room, but the front door will always be unlocked (even if there is no one home)



Cheers,

The Y-man

Thanks very much Y-man, good info to start with. Do you think the easiest way would be to include all those things in rental rather than trying to charge them for utility bills separately? What about telephone and internet, how would you ensure each tenant is charged fairly, for what they used? Thanks.

 

[Xenia]

I just did a seminar on multi-let properties, pros/cons and recorded it.

Only short about 30 mins.

It will be made available through our website in a few weeks. Just waiting for our web guy to work it all out! It is for SA but you might be able to get a tip or two.

 

[The Y-man]

Do you think the easiest way would be to include all those things in rental rather than trying to charge them for utility bills separately? .

See what I wrote in my first message: You have NO CHOICE - you HAVE TO include it in the rent. It is ILLEGAL to charge utility bills separately (unless each bedroom has a power meter, a gas meter and water meter ).

What about telephone and internet, how would you ensure each tenant is charged fairly, for what they used? Thanks.

You disconnect the phone (tell them to use their own mobiles) and don't have internet.... otherwise you may be heading for a world of pain....

Cheers,

The Y-man

 

[The Y-man]

Do you think it would be a problem finding tenants? As far as I can see there are not many students in the area. Thanks again.

You'll probably find all sorts applying (typically those who can't afford a place outright, or those who can't rent due to no history etc)

Cheers,

The Y-man

 

[propertyVIC]

rooming house

I also looked at this recently.

What put me off (for now) was that in order to have even a four bedroom house rented out by the room, you need a commercial grade fire system... ie roof sprinklers or a combo of hose reels, exit signs etc which would cost tens of thousands of bucks. Hard to get quotes without proper plans but was told 60K-ish for a 10 bedroom place at a guesstimate.

If you built from scratch, fire system wouldn't cost as much.

I suspect that for this to work financially you'd need a big house with lots of bedrooms or (brainwave) a townhouse development where each dwelling only rented out three rooms so you weren't officially a rooming house???

My friend who is an education agent in China said overseas students do prefer to walk than catch PT (cost reasons)... but I imagine that if you price appropriately it wouldn't be the end of the world.

Also, students will do all they can in order not to pay rent over the long semester break so you'd need to account for some vacancy.

If anyone's interested in running this type of business AND living in it, there's a big legit, registered on on sale in Brunswick for about 2 mill. Charges super-high rates as they provide the women and girls with cooked meals, act as schoolgirls guardians if need be etc etc.

http://propertyvic.blogspot.com