Subleasing - Advice and guidance from the wise.

N

nhg

Hi,

I have run then numbers on the apartment I am in and realised I could make $300/week profit subletting it. Neighbours are already doing this and have discussed it with their tenants. Only cost to me is the initial weeks renting out rooms (already found ways to mitigate loss) and the bond.

Now this has opened up a world of possibilities for me, however I would want to learn to do it legally. Having fixed price contracts with the owners etc.

Are any members on this forum involved in sub-letting that wouldn't mind having a chat with me?

Any legal advice or words of wisdom from those that have done this previously.

Please share or PM me, I would greatly appreciate any guidance in this matter.

Thanks.
 
So to clarify, you're renting a place as a tenant and you want to be the lessor and find sub-renters?

Are you going to be living there yourself or?
 
I want to set up a few. So I won't be living there myself.

Have worked out how to bring people in already, and have done basic research into how much and these tenants requirements.

Numbers from my next door neighbour.

1. $700/week rent.
2. 3 bedrooms, 2 people per bedroom at $200/pp and car spot rents $50/week
= $1250/week.
3. All bills and fully furnished.
4. Vacancy rate is <1 week.

So $1250 - $700 = $550/week.
Subtract bills from that...

No serious capital required, make enough to hire someone else to manage it for me.
I have some more sophisticated sub-letting ideas brewing but I need to get the right legal advice.
 
...2 people per bedroom? Are you serious? What sort of place is this that people pay $200/week for half a bedroom with 5 other people?

How familiar are you with property management? Because you will be managing 6 high maintenance type leases at a time.

Sounds like a practical and legal nightmare.
 
nhg said:
Subtract bills from that...
Click to expand...

Bills will be huge in that situation. At least $100pw for power and more like $200+. If they're not paying (and you're not living there) they won't care about power usage. AC/heating running constantly. Clothes dryer used constantly (therefore needing to use more AC). There will be fridge issues so each room will have at min a bar fridge.
 
I do it. I have express permission in my lease to be able to do it though.

I supply unlimited wifi and all utilities. Surprisingly the 4 people in there only use about $60/mth electricity and with Vivid I have them on a $80/mth unlimited mobile broadband plan so no phone at the premises.

Mine are long term by the room renters though.
 
This is very common in Sydney CBD and surrounding areas. Some apartments have 3 people per room and 3 people in the loungeroom, one living on an enclosed balcony etc.

I would be worried about the OHS type risks - fire etc.
 
Does this cross over the boarding house rules ? Been a bit in the media about people cramming back packers into "slums" of late.

One guy had people living in dongas on an industrial site, he got away with it until there was fire.

I would think the neighbours are the ones who could cause problems by complaining to council
 
I say go for it

What I have learnt reading this forum is that the moment everyone here tells you not to do something you should immediately go and do it
 
Lol $200 each per person per room.

Will these people be related parties to live in a room together I.E 1 bed?

Or will you need to provide bunk beds or two single beds.

Have you got permission from your landlord?

What if your landlord wants to sell and gives you an eviction notice what happens to all your set up costs?
 
Boarding House Legislation 2012

If you rent to 5 or more unrelated tenants in NSW you are now automatically classified as a boarding house due to new legislation enacted in 2012.

You need to register with department of fair trading and then have to comply with a whole host of council safety requirements, fire checks, insurance issues etc etc etc

You will not get a landlord to agree to allow you to do this.
 
Erin Woods said:
If you rent to 5 or more unrelated tenants in NSW you are now automatically classified as a boarding house due to new legislation enacted in 2012.

You need to register with department of fair trading and then have to comply with a whole host of council safety requirements, fire checks, insurance issues etc etc etc

You will not get a landlord to agree to allow you to do this.
Click to expand...

Correct and I doubt any landlord would let you have the place at market rent if you let them know you want to put 6 people in it as it's additional wear and tear.

In my situation it is a 4 bedroom home and I am allowed to sublet it to 4 people.
 
westminster said:
Correct and I doubt any landlord would let you have the place at market rent if you let them know you want to put 6 people in it as it's additional wear and tear.

In my situation it is a 4 bedroom home and I am allowed to sublet it to 4 people.
Click to expand...

Numbers stack up as profitable?

Mind if I give you a ring to ask a few questions?

I want to do it legally, not into the business of doing the dodgy.

Am thinking commercial lease with option to extend. I've seen a few setups, all legal. One mate rents places from $80-450/week, subleases them between $700-2800 at full capacity (not backpackers). He is pretty lazy and rarely gets more than 70% which is actually quite doable.

I've been trying to JV with him for 2 years, can't replicate it without his know how. Well that's the lie I tell myself anyhow.
 
nhg said:
Numbers stack up as profitable?

Mind if I give you a ring to ask a few questions?

I want to do it legally, not into the business of doing the dodgy.

Am thinking commercial lease with option to extend. I've seen a few setups, all legal. One mate rents places from $80-450/week, subleases them between $700-2800 at full capacity (not backpackers). He is pretty lazy and rarely gets more than 70% which is actually quite doable.

I've been trying to JV with him for 2 years, can't replicate it without his know how. Well that's the lie I tell myself anyhow.
Click to expand...

I cannot imagine how your mate is subletting a place for $2800 a week (that he is paying $450 for) and doing it legally?
 
Mine is not terribly profitable - besides some $ the other upside for me was the property was in CBD and I got use of the parking bay so I no longer had to pay parking in the city. I now lease that out as I'm no longer working in the city. I still park in the visitors bay if I head into the city now and then which is still very handy.

So I make around $200pw. Over a year it's less than that as I had fitout out costs to get it all furnished
 
wylie said:
I cannot imagine how your mate is subletting a place for $2800 a week (that he is paying $450 for) and doing it legally?
Click to expand...

Hired a 4 bedroom place under a commercial loan.

Retro fitted it for <$5k.

Rents the rooms out for $50/ half day to a niche market (no, not a brothel).

Though that one hasn't made more than $1200 in a week.

He has opened 4 in 18 months, had another 2 which he closed down. Reckon when he gets the system down pat, he will expand like crazy.
 
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