Hi There all,
Just wondering if anyone out there has any info on setting up resi homes into Boarding houses??
A friend of mine recently was telling me about an investor who was buying resi home in sububan Melb. and converting them into 5+ br boarding houses. He was doing this by means of buying an average 3br home, then erecting a wall in the middle of the lounge and making 2 more br, thus 5br in total. pretty much 5br with kitchen and no living areas! I’m told he is renting each room out at $110-$135 pw. All outgoing are on landlord. the tenants just pay the rent only. He rents them though a society for people who have been though a hard times (ie divorce, etc…)he has 4 of these properties. I’m told the places are kept in resonable condition, he actually tells me that having no living areas helps with that.
I’m told the returns his returs are 10%+ pa.If any one know more pls reply
John [biggrin][biggrin]
Sounds good.
I lived in something similar when I went to uni is Sydney. Students are also a good market. Some places even have balconies converted into little bedrooms.
Terryw
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Another possibility is spending a bit more and getting a house with two living areas, and turning that living area into a bedroom or, depending on the size, two. I’m a student renter and I’d much prefer to have a living area to veg in once the studying gets too much. Instead of having it as a lounge room, have it as sort of a common room at boarding houses and possibilty provide some appliances.
In doing that, you could charge more rent.Some students are from better off families and aren’t really looking to sacrifice their standard of living if they need to move interstate for study. This might be a good market to target as all the responsibilities of independent living are initially a shock, which could impact on studies. They’d be willing to pay that extra to avoid responsibility. Yet with computers on all day, five people showering and cooking; the bills could get pretty high. Another benefit of targeting students is that advertising can be free through there website and you could possibly get references off staff there, reducing the risk of false references.
I’ve read about a telstra phone where users get have their own pin number or something, it might be something worth checking out to lower the outgoings.
Ask your friend to go into more detail as most people are only too friendly to help. Get him to show the mechanics of how it works, the finances and risk involved, and the legal side. For instance, if theres no lounge room pets would be out of the question.
I’m bringing my advice from the perspective not of an investor, but the person who would be interested in something your offering. Its hard to find good student accomodation and you could find a little niche market if you chose the right area.
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