Renting out rooms individually to increase rental yield

It can work out more but lots of hassle – eg. who manages it all, will you live there too? What about energy bills, cleaning etc. You will probably have to cover this out of your rents

Property Managers arent keen on this either.

I actually lived on a place where the owner rented out the rooms individually while i was at uni – briefly. There were problems with no one wanting to clean common areas, broken common appliances – who do you blame if no one owns up. generally less care was taken with the place and the yard etc because no one had sole responsibility.

Hi there,

A fellow investor uses this strategy very successfully to date with students, and is achieving yields of 12% to 13% in a typically 4 to 5% yield area.

The downside is the time involved.  He would be personally spending 5 to 6 hours a week across 3 properties to make it happen.  You are unlikley to get property managers to do it for you.

Cheers

Mark

Hi
I have properties in university areas which I've rented out like this for many years to different nationalities but mostly Australians.  The key I believe is to start with one person or two who you yourself select for acceptability.  You can tell very quickly and see it over a couple of weeks the standard of caring for your property.  It is very important to present the property at a good standard even being quality furnished.  This attracts people who like to live in this kind of environment and who don't want the burden of bringing in a new item (fridge etc) every time someone departs .  These starters then have the choice of taking on the extras eg 2 more for the house so give  them the right to select the extra people required.  They are not going to take on house wreckers or grotty people if they have proven already the standards you started with in initial presentation.  At this point you take over contact with the new ones in terms of the financial transaction only and welcome them in the usual way.  It does not mean the first one or two takes responsibility for the others but it frees you from the continual selection process as tenants change over time.  You check the scene a couple of weeks after and then if everything is ok extend the period until your next visit.  People do not like being told what to do but they usually love the feeling of responsibility being handed over in a diplomatic way.  As far as cleaning the house goes it is there responsibility and certainly if stoves and bathrooms start to get grotty then simply tell them (diplomatically) it is not acceptable and on your next check if the problem persists then give them notice.  The earlier you nick things in the bud for most people they respond……and if you don't do this it gets worse.  The best students are in their 3rd year or postgraduate as most of the newbies have little idea of domesticity, want to party being free from parents and fail a lot of units in their first year…..so not good for your house.
Carpe

I have three sub-leased houses around a university in Melbourne. We've significantly increased the rents, by taking a 4 or 5 BR place and providing fully furnished rooms.  We pay a cleaner to go through each fortnight and clean all common areas. For us, it has worked very well, but we have to put in a few hours here and there managing things.  Essentially you've got to run it like a business. If you just sign students up, and leave them to themselves for 6 or 12 months, you'd be in for trouble.  If you build a bit of rapport with them, show them that you value the house and value them as a rent paying tenant, you'll get some respect and minimal issues.