Renting By Room

[akira]

I talked to a few people and this is what they have said:

# You don't supply toilet paper or any other little things, not even towels or sheets

# Have the place idiot proof, no dainty, fragile furniture etc. Just have walls, windows and maybe some very basic cheap furniture like a table, sofa etc

# Have large shared fridge but buy a bunch of cheap mini fridges from kmart and lease them out if they prefer them.

# Don't have Gas, idiots will leave it on

# Supply a coin washing machine and dryer and a outdoor line if possible

# You make very clear rules (no heaters etc)

# Put up rules/notices around the place in clear laminated.

# You have regular room inspections

# Internet unlimited for 6 or more people otherwise lower the price and let them get their own or get a limited option and setup a login/quota for each person

# Be selective with tenants, go for quiet Asian girls for the best tenants

# Place ads in Gumtree

# Make it nice for them so they want to stay there, (without spending much money) get rid of any trouble makers promptly or the good tenants will move out. Get the odd newspaper, bring some cheap food you pick up from Asian grocer or just do little things to please the tenants and make them happy to have you as landlord.



Anyway I won't be doing this but could consider it in the future if I purchase the right place.

Been there done that. Did it for 6 years, that was before council tighten the law.

Managed 15 students (2 houses).

Would I do it again, properly now. Very good money. Profit around 30k between 2 houses before tax.

Very easy to run. What is annoying is finding the new tenant once their contact expired.

 

[Perp]

For 8 years, I owned a 17-room student accommodation.

A lot of the advice here is good, but I disagree with HomeBuyAU about a large shared fridge; we ended up removing the shared fridge and only having individual bar fridges. The shared fridge ended up with a lot of rotten food in it that mysteriously didn't belong to anybody, and was a real hygiene issue.

If you have to have heating or cooling - and in many climates, you do have to have one or the other or both - then go to the trouble of putting each room's A/C on individual electricity meters. There's still one master meter and one account, but you then get tenants to pay for their individual usage. If people want it on all day and night, they can, but they pay.

With regards to cleaning, I think the best option is to have a professional cleaner come through once a week (minimum). It's just part of the cost of doing (this kind of) business.

Washing machines and dryers - washing machines don't cost that much to run. I found it was cheaper to just supply a washing machine and let students use it free, than to rent a coin-operated washing machine. And that's with 17 rooms! With 5 or fewer rooms, there's no way you'd make back in coins what it costs you for the coin-op machine. Dryers, on the other hand, are expensive to run. Again, even with 17 rooms, I didn't make back in coins what it cost me for the machine, so if I had my time again, I'd just not supply a dryer. If you have to supply a dryer - and in some places, such as Melbourne, it's probably essential - I'd still be inclined to just supply a regular dryer rather than use coin-op, and somehow regulate reasonable use, e.g. get electrician to wire it so that it only goes for 45 minutes (for instance) before having to be turned on again. Or put it in a locked room where tenants have to get the manager/caretaker to let them in, so that you can somewhat keep control of its use.

 

[akira]

Individual bar fridge cost so much to run and supply. What we did is provide a big fridge, the cheap 430L Westinghouse (4 rooms per fridge). Divide into 4 sections and assigned 1 section per room. If they are moving out, they will have to clean their allocated space (fridge, pantry, room).

In term of common area cleaning, the student will have to do it. The common areas are split into 3 sections; living room, toilet/bathroom and kitchen and dining room. A weekly cleaning roster is provided. Cleaning products are supplied; they are pretty cheap, all home brand. We tend to find that the one willing to do weekly cleaning won't be the party type. All cleaning must be done before 10am sunday and we do weekly check.

Tenant selection is very importan. Only target Chinese, Korean and Japanese; due to cooking issue.

I wouldn't bother with coin operated machine, just get a 5L top loader per house; only cost around $400. Dryer cost so much to run and they tend to encourage frequent washing, so avoid them at all cost.

No air cond at all, the only cooling unit is a cheapy $10 fan.

 

[Perp]

No air cond at all, the only cooling unit is a cheapy $10 fan.

Horses for courses, but students looking for accommodation in February in Brisbane want air-con! It cost me, over the 8 years, less than $2 per week to supply and maintain air-con to every room. (That includes initial installation.) The real estate agent said it got me $15-20 per week in extra rent. Seems like a no-brainer to me.

Your ideas about dividing up the fridge and having the students clean the common area can work - we tried it - but you have to be far more hands-on than I was willing to be. If you're willing to police it vigilantly, good for you, but that's a job, not an investment.

 

[akira]

Depending on your target price range and what is comfortable for you. Not sure about now, but 5 years ago the market is flooded with international students and we hardly had issue with new tenant during summer. We did think about installing aircond, but we couldn't justify the upfront cost

Rent collecting and cleaning check up 1/2 hr max every fortnightly. New tenant, maybe 1hr.

 

[Mindmaster]

Been there done that. Did it for 6 years, that was before council tighten the law.

Managed 15 students (2 houses).

How did you manage that many? If each house has 4 bedrooms, I'm guessing students had to share.

If so, did that mean a big drop in rents and make finding new tenants more difficult?

 

[akira]

How did you manage that many? If each house has 4 bedrooms, I'm guessing students had to share.

If so, did that mean a big drop in rents and make finding new tenants more difficult?

4 standard rooms, 1 dining and double garage = 7 rooms. Most of the time they are either inside their room in front of laptop or outside. Less common area means less cleaning and more room to rent out. I've converted the dining room back, but left the double garage as is. Currently rented to a family. I reckon they properly rent out the double garage to other students.

 

[Perp]

4 standard rooms, 1 dining and double garage = 7 rooms.

This is both illegal and appalling.

 

[willair]

4 standard rooms, 1 dining and double garage = 7 rooms. Most of the time they are either inside their room in front of laptop or outside. Less common area means less cleaning and more room to rent out. I've converted the dining room back, but left the double garage as is. Currently rented to a family. I reckon they properly rent out the double garage to other students.

Something like this can have explosive consequences,not only from the fire safety-insurance side of things but from when someone slips over or if there is ever a fire and you end up on the wrong end of a custodial sentence..

 

[akira]

This is both illegal and appalling.

Illegal - 100% agreed, that is why I stopped 5 years ago. When just starting out, $15k profit per house is very tempting. So did it for 6 years and decided it is enough.

Appalling - not sure about that. 4 bedrooms per toilet, bathroom, kitchen with 6 seats dining table and 6 x 3m living room fully furnished with sofa and tv. Each rooms are fully done up and furnished with double bed, bed side, extra large study table, proper office chair. It is pretty comfortable. Most of the tenants stayed until they finished their course. Very low turn over rate. Around 40 different tenants for the 15 rooms during 6 years of doing it.

 

[akira]

Something like this can have explosive consequences,not only from the fire safety-insurance side of things but from when someone slips over or if there is ever a fire and you end up on the wrong end of a custodial sentence..

The place is fully done up with all safety alarm and fire blanket and extinguisher in the kitchen. We did had one hiccup, a tenant was cooking and received a call from friend and left without turning the stove off. The pot was badly burned and smoke everywhere, we got scared and gave tenant 2 wks to find a new place.

I wouldn't recommend going down this path. Too much of a risk.

Heard of even more horror story. A house in Macgregor, opposite Griffith uni, has around 15 Indian students in 4 rooms with 1 toilet and bathroom. The owner hired 2 portable loo for them. Each tenants paid $120 per week for this extreme condition.

 

[geoffw]

Tenant selection is very importan. Only target Chinese, Korean and Japanese; due to cooking issue.

That's called racism.

 

[akira]

That's called racism.

Oh man. They are every where, as long as you don't show it out. If I am not managing the place, I don't really care. Since I am managing the place, I have to be picky on tenants. Did had 3 Indian tenants, I think they are the western type. No body or cooking odour. Pretty good and clean tenants. Had one, don't know what nationality, very strong smell. Can't even stand it. In low season, I'll rent to who ever is interested in the place. In peak season, the ads are only in languages that I am targeting.

 

[knightm]

Do any of you rent your properties by room?

Well to the OP as you can see some do rent by the room, legally and illegally. Its not impossible but proceed with caution and do things properly if you don't want to risk fines and custodial sentences in case of negligence. As you can see from some of the posts it really is up to your own moral compass how you apply and adhere to the rules on this. Personally I could never sleep at night unless I know what I am doing is fully lawful and insurable.

 

[rohan22no]

I have 2 houses which I rent by the room which also have granny flats. About 10-12 individual tenants at any time. Sure, issues come up, but 99% are instantly and easily solvable. Its obviously NOT for the passive investor. You have to keep on top of things. For me, its worth it, and the extra cashflow is awesome.

Quick tips
- Get them to share the electricity bill. Its not hard. "Hey guys, the bill has come in, you each owe 1/4 - deposit to my account, when all the payments are in, the bill gets paid.". Sorted.
- Unlimited, or close to it internet plans are cheap. Get it.
- Furnishing is relatively cheap - get stuff off gumtree, Fantastic furniture/Ikea, charity shops. I furnished (pretty well) a 5 bedroom house for about $3500 total.
- As homebuyAU said - You cant go wrong with quiet asian girls.
- I've generally targeted females over males - easier to have an "all girls" house in my experience.
- Enlist the current tenants to search out new tenants for/with you. They are always keen to have a say in who's moving into the new room, and it takes the weight off your hands.

Re: Racism - Theres nothing wrong with targeting a certain race, its a fact that different races have different cultures and (for example) different standards of cleanliness. In my reasonably-sampled experience, I've had almost no trouble at all with Chinese and Japanese tenants paying rent and keeping a house clean. I jump at them! Indians and Pakistanis (again, in my experience) are toward the other end of the scale. I have friends from the subcontinent, but I will never rent to a random Indian or Pakistani again.

 

[Perp]

I have 2 houses which I rent by the room which also have granny flats. About 10-12 individual tenants at any time.

Is this legal, or are you another one to whom the rules do not apply?

If the latter, what's your plan for if there's a fire?

 

[rohan22no]

Is this legal, or are you another one to whom the rules do not apply?

If the latter, what's your plan for if there's a fire?

Ring the fire brigade

 

[Perp]

Ring the fire brigade

Your tenants can ring the fire brigade, you'll need a lawyer, and somebody to bail you out.

 

[rohan22no]

Your tenants can ring the fire brigade, you'll need a lawyer, and somebody to bail you out.

Na...


na

 

[wylie]

Na...


na

Google "Childers backpacker fire" and see if you might rethink your casual attitude.