Me and a friend just bought a property that we are going to turn into a rooming house in eastern suburbs of Melbourne . We know very little about what we are doing . We have heaps of Questions. How do we manage the place ? how do we collect rent ? how do we get the people to clean up after them selfs ? how do we deal with a trouble maker ? how do we deal with people wanting to be up all night ? how do we deal with conflict between people that dont see eye to eye ? insurance ? there are so many questions so if you can give us as much info as possible it would be great [drummer]
Hey Rick,
Nothing like having a solid plan in place and having performed solid research on the subject before taking the plunge….good luck with your endeavours.
On a positive note, you are an inspiration to all of the folks out there suffering from ‘Analysis Paralysis’. Step up to the plate and have a crack at it.
Let us know how steep the learning curve is.
Cheers,
Dazzling
“Go hard or go home”
Ha ha ha Just about falling asleep needed a good laugh to wake me up thanks for the support
Need people to respond not just read I need help in more than one way:)
Go BUY Steves latest book.
One of the Mappers bought a house with about 20 bedrooms.
Yack have read it but still doesnt answer the questions I need answered. Thanx anyway
Hi Rick, I’ll have a go at your questions. I’ve seen these types of properties managed by a real estate agent, there’s no reason you cant do the same. Just talk to some and find out what the deal is.
Each room is leased separately, each tenant has to pay their own rent and bond and in the tenancy agreement, cleaning, use of common areas etc. would be covered. Trouble makers and night owls and conflicts would be the propety managers concern. However, these places are usually filled with students, so the risks of hoons would probably be minimal.
Insurance shouldn’t be too much hassle, just tell your insurer what exactly the arrangements are to avoid any nasty surprises later on. You’d probably pay a bit more, but who cares, atleast you’d be covered.
I think this type of investment is great but make sure to get a decent agent and do the right thing by your tenants, and as it said in Steves book the likelihood of trouble is greatly minimised.Hope this helps…Good Luck! G7
Thanks G7 anyone got anymore info would be great
I reckon its a bloody lot of work for what you get.
My cousin in the UK has 4 houses in Lincoln. He is a university professor and rents these rooms to uni students.
It became quite painful and not worth the effort for the return. Now he rents the rooms to polish (Poland) migrant workers. He gets paid a bit more and they are less hassle.
Hi Rick
Just fin reading Reno Kings newest book Real Property Real People UnReal Profits. It talked about niche market and explained all the things that went wrong and what they did to turn it around.
Worth a read to have an understanding what dangers/rewards may lie ahead.
Cheers
Jenny
Jenny1
Thanks Jenny will have a read
[drummer]
Hey Rick,
Reading over your post, i was thinking of asking the a few of the same questions down the track..
I have lived in a share house (19 rooms) in the eastern suburbs of sydney for just over 2 months now and really enjoy it, in fact i will consider looking into buying my own in the near future depending on how the market is going and my own circumstances… ill answer some of your questions based on my observations so far..
How do we manage the place ?
Get a retired person / couple to live there rent free and keep an eye on the place, collect rent, show new ppl around etc etc
how do we collect rent ?
see above
how do we get the people to clean up after them selfs ?
depends on where your talking about, common areas like tv room and hallways are cleaned by the care taker or a tennant for a reduction in rent, the kitchen i find is usually looked after by the ppl there as they soon get grumpy and tell the person off who eats and soesnt clean up after themselves, also a limit on cutlery and utensils forces ppl to keeps things clean..
how do we deal with a trouble maker ?
hmmm depends on what it is, screen potential tennants, my place is 75% girls (yay) they seem to cause less problems apparently… choose ppl who are at uni, working or both, or ppl who are going to be around for a while, they usually try their best to stay in 1 spot, so they generally behave.
how do we deal with people wanting to be up all night ?
Well, just make sue the TV room has a door, ask ppl to limit their noise after a certain hr (make this well known as a condition of entry so to speak)
how do we deal with conflict between people that dont see eye to eye ?
U dont, one will leave, the rooms are usually cheap and people wont be bothered hanging round in conflict… or perhaps rotate one of the tennants to another room away from the other person when one becomes vacant..
insurance ?
buggered if i know lol
Hope that helps
Jason
Thanks a lot Jason [drummer]
Great Post TeacherK6.
I odn’t have any myself, but my folks run a claeaning business and one of theri jobs is a roomhouse. In this one they odn’t have a live in caretaker, it’s run through an agent and the folks clean all the common areas once a week. The real esate agent pays them and charges the owner. They also clean the rooms ofr nayone that wants theri individual room cleaned but are paid direct by the perosn in the room for this service.
PK
Hi Rick,
You will also need to contact the relevant authorities in Victoria (don’t know who they are [dunce]) as rooming houses need approval, licensing and special insurance.
I am sure someone will be able to fill in the gaps for me.
Derek
[email protected]Property Investment Support Available.
Hi Rick
Great idea! Lots of guys we know do exactly this but in a little smaller scale and they keep a hands on approach. They live in the house them selve’s however none of the people living in the house actually know this. It works out well, the guys who move in pay 4 weeks bond, and rent 2 weeks in advace. It is a sort of casual arragement. With each person responsible for finding a replacement when they want out, becuase that is the only way you get you bond back by getting it off the next person who moves in. It is a great little money maker, but the down side is make sure there house is built to last…..
Hope this gives you an idea of a slightly different possible angle.
Cheers
Rhttp://www.aussiefinancial.com.au. AussieFinancial is Australia’s most comprehensive consumer financial information and financial planner referral service.
Thanks guys/gals[drummer]
Anyone got anymore for me?[drummer]
Hi Rick
Have you made a final decision on what kind of establishment you want it to be ? e.g. backpackers, boarding house, rooming house, student accomm., share accommodation . . . ..
There are a number of alternatives, different markets, quality of occupants varies, can be seasonal, different legal structures, usually under different legal acts. It’s important to know what rights owners/managers have when renting accommodation and when ejecting people or occasionally when calling the Police to eject people to be able to quote your rights to Police, they often don’t know for sure and become uniformed lame ducks. Tenants and some other types of occupants have rights galore these days.Some types of properties have higher occupant turnover, higher higher wear’n’tear & maintenance, more management required, closer cash income scrutiny required. Other options require less cash scrutiny, are less labour intensive. I guess it depends on how hard you want to drive yourselves and the property.
Not always does more work make more money.
I favour longer term occupants with better socio-economic profiles, less problems.
Whatever you decide to do, get all the ducks in a row. If there is an association for your sector of the industry, join now and get into the info loop, liaise with other members etc.
Good luck, congrats, your gutsy can-do attitude is admirable and attracts help as always. (The cosmos delivers.) Please let us know on this forum how it’s progressing in the deep end.
cheers [biggrin]
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Will do thanks for your input[drummer]
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