Hi Just wondering if anyone has had any experience with running share houses? I have seen 3 listed for sale in my area, Frankston VIC that seem to be very well run and bringing in a good return $40K/year each. These types of houses seem to get a lot of bad press but I can't see why if they are well run that they would not be a good investment. Any thoughts? The 3 houses in question have only 5 bedrooms each a caretaker in each and long term tenants. I would like to manage them myself. Frankston always seems to pop up in reports of areas with good potential for capital growth. Do you agree? Many thanks for any thoughts. Cheers FF
Hi Frankston Fella,
Welcome to the forums!
I've only leased to individuals/families so can't tell you much about the logistics of a share house. However, a common theme on these forums about this type of investment is there is some difficulty getting insurance. If you search the site you should find more information about this.
Andrew
itsandrew
Go as far as you can see and you will see further.
Thanks Andrew, have already spoken with my Insurance Broker, she has told me that as far as insurance goes it is the same policy as any investment property…..as long as your registration and Essential Safety Measures are all up to date. Appreciate the reply and the welcome…cheers mate FF
Here's a couple of threads that might be of interest.
https://www.propertyinvesting.com/forums/property-investing/help-needed/4333713
https://www.propertyinvesting.com/forums/property-investing/value-adding/4328993There are more posts on this topic if you search under "rooming house" and "boarding house". Hope this helps.
Andrew
itsandrew
Go as far as you can see and you will see further.
you're a good man Andrew! Many thanks I will be sure to check out the links…cheers!
This week is crunch time….so any thoughts greatly appreciated! cheers
Hi
I run share houses in Adelaide so, make sure you have included all costs in your figures, electricity, internet, water, cleaning etc. They take more time than the normal rental house as you have 5 tenants not one. If you use a insurance broker make sure they talk to the insurance company, not just tick boxes online, as most will not insure this type, I can help if you buy one.
AND, are the houses council approved as a 1b dwelling, if not and there is ever a fire etc, no insurance company will pay out, if someone injures themself no cover either
The good part, better return.
Have funBarry
Thanks Barry that's very positive…and much apreciated advice! The houses are approved 1B and council registered, have hard-wired smokies and emaergency lighting they have occupancy permits so I can only assume all safety work has been done.
Did speak to my insurance broker doesn't seem to be any probs there…Calliden I think she said will insure.
The vendors have provided all costs associated with running the houses, they don't seem too bad, gas helps!
and yes the return is great at just under 10%….I'll keep you posted as to how I go cheers mate FFI guess the other consideration is finding tenants!
The vendor says he will assist for 6 months in finding new tenants until the new buyer is "plugged" in to the system. I imagine that with such a rental crisis that finding tenants isn't too much of an issue. Anyone have any thoughts?
All 3 houses have at least one person in them that has been there since they opened, I guess that is a good sign…..
cheers FFAdvertise on http://www.gumtree.com. Also there might be a government assisted housing program in the area. In Geelong it is called Diversitat. Basically helps new migrants find somewhere to live for their first little while in Oz. Advertise with local TAFE and Unis…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks Jac! I'm sure there are a quite a few agencies around, we have a couple of good ones in Frankston who have expressed interest so I'm sure that'll be fine. Not sure about students tho, what do you think? Quite often not around for a full year….thought I might be better to target regular local people, cheers for the post
Students could of course be considered a bit of a nuisance in that regard, but you could get around the issue by making the shortstay rate higher
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks Jac, so are you thinking like a yearly rate perhaps averaged over their stay…that could work, I have heard some students will pay almost their entire stay in advance…worth considering…cheers FF
seems two of the properties have gone under contract….so I'll just have to look at the last one on Netherplace Drive, looks OK all female share house very settled, house dog named Poh…maybe it's an omen…I love Poh's Kitchen
Frankston Fella wrote:Thanks Jac, so are you thinking like a yearly rate perhaps averaged over their stay…that could work, I have heard some students will pay almost their entire stay in advance…worth considering…cheers FFThat's exactly what I'm thinking yes. If it is legal, I'd be asking overseas students to pay a large amount upfront as well. Don't think this is legal though.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Heres one of my little CF+ secrets.. eg: one of my own investment properties is a share house, I have one guy in there who runs the show and collects the rent, he gets a reduced rent for his time, he acts as a caretaker so to speak, mow's the lawns as well etc. theres 4 people in the house and 1 in the converted garage and I am $250 a week cash flow positive with it. You just need to pick the right people. I have advertised in local papers as share house, vego, no alch and cigs etc. The kind of people I get are alternative minded with very clean habits. This works well for me.
thanks to Jac and Sue for their replies!!
well Sue I reakon you have got some great tips for everyone there, sounds like your share house would be a great place to live! Well done and thank you so much for your contribution! cheers FFHi Sue
Very interesting. So it's not really a rent by the room but a share house. Do you have letting contracts of any kind with each separate individual? I'm also interested in the manner in which your share house is insured? ie Do you tell the insurance company that it is just one tenant who sublets, or do you tell them you actively sought separate people for each room or….?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
As far as OS students the ones I have had rarely gone home etc, if they do and want the room still they get 30% off rent if they are away for more than 14 days, I have had international students for more than 3 yrs stay. I advertise on RE.com under share acc, 50 per mth, if I have a room at the start of the year I will put it on the Uni sites.
The only company I know of that insures this type is GIO, do not believe your broker if they say another, get them to speak to the company not just online. If you get general landlords insurance and something happens you will not be coveredThank you for that insight, I thought RE.com might be the best place to advertise, sounds pretty reasonable! I have had a look and there doesn't seem to be a lot of share accommodation available at any one time.
Thanks for the tip about insurance I will make sure my broker checks GIO, many thanks again FF
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