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Single Storey

5 x room Class 1B Rooming House

Period

2023

Location

Yarrawonga VIC

Status

Completed

Class 1B Rooming House

5 x rooms: each with kitchenette, ensuite and private outdoor courtyard. Double lock up garage

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"The best way to get started is to quit talking and begin doing."

- Walt Disney

Frequently Asked Questions

What kind of return on investment can I expect?

When creating a complete rooming house solution (land and build), we aim for a gross rental yield of 10%. This compares to an average gross rental yield of only 3% to 5% for traditional rental properties.

ROI can vary depending on several factors, such as the number of rooms and expected rent per room, so we provide you with projected returns based on the proposed solutions during the consultation stages. As a guide, the gross rental income for a rooming house with 4 rooms is usually around $70K per annum, whilst a rooming house with 9 rooms can be around $150K or more per annum.

Should I furnish my rooming house?

This is a conversation to have with us and your chosen property manager leading up to construction completion. There are pros and cons to both, depending on many factors including your target tenant market, location and the rental yield you’re aiming for.

As a general rule, we’ll often advise our clients to initially furnish a percentage of rooms. We can connect you with professionals who can help source, purchase, deliver and set up appropriate furniture for these environments.

Can I leverage off the equity in a rooming house?

Yes, just like most other property investments, you have the ability to leverage off the increased value and usable equity available, subject to your overall financial situation at the time. Increasing the value and subsequently increasing the equity in a rooming house is usually through increasing the rental yield, as the valuation method is often commercial.

In addition, there is often equity uplift at the end of a project once construction is completed and the rooming house is fully tenanted, subject to actual rental yields obtained.

Leveraging is essentially pulling the increased value, in relation to the debt on one property, to put into and help purchase another property in lieu of cash.

Will a rooming house maximise the ROI on a current property I already own?

If you already own property, it may be possible to knock down the existing dwelling and build a rooming house that will most likely significantly increase the rental yield on that property and provide a 'best and highest use' of land outcome.

If you have unencumbered land or significant equity in the investment, the rental yields and positive cashflow can be very high.

As with any potential rooming house site, the planning provision requirements to obtain an exemption from a planning application need to be met, and any planning controls need to be assessed.

Want to explore the potential of a rooming house investment one-to-one

We’d love to walk you through the estimated numbers to outline the life-changing outcomes you could achieve. Get in touch to book a no-obligation chat with our expert team.

Get in touch