Signed a contract to buy a shared accommodation rental, the numbers look good on paper (purchase price mid $500K, theoretical rental return $800+/wk), but the more I dug into it the more scary it got. The main disadvantages are :
1. Ridiculous insurance premium $5000 & up. Many investors have the vanilla landlord insurance policy which doesn't cover property leased by the room. I know disasters don't usually happen, but if they do ............................
2. High cost of compliance such as fire and council.
also high tenants turnover and long vacancy. Been told by couple of local rental managers that some rooms have been advertised for tenants forever.
Most likely will cancel the contract, would appreciate opinions/experience for or against buying rooming rental properties.
1. Ridiculous insurance premium $5000 & up. Many investors have the vanilla landlord insurance policy which doesn't cover property leased by the room. I know disasters don't usually happen, but if they do ............................
2. High cost of compliance such as fire and council.
also high tenants turnover and long vacancy. Been told by couple of local rental managers that some rooms have been advertised for tenants forever.
Most likely will cancel the contract, would appreciate opinions/experience for or against buying rooming rental properties.
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