A comprehensive guide to investing in a rooming house

If you're looking for a property investment that offers both positive cashflow AND potential for capital growth, then a rooming house may be the perfect option for you

If you're looking for a property investment that offers both positive cashflow AND potential for capital growth, then a rooming house may be the perfect option for you. This type of property is becoming increasingly popular with investors in Brisbane, as it offers a great way to secure a high and stable return on your investment. In this guide, we will provide an overview of what rooming houses are, the benefits of investing in one, and some tips on how to get started.

What is a rooming house?

A rooming house is a type of residential property that provides self-contained accommodation for tenants, typically with their own bedroom and shared kitchen, bathroom and living spaces. Rooming houses are often used by people who are looking for affordable housing options, or those who require temporary accommodation.

The best rooming houses are those that suit long-term tenants. Each tenant has their own bedroom, ensuite, lounge and dining. Each room has its own locks, and they are fire- and sound-proof.

Brisbane City Council supports rooming houses

Unlike many other local councils in Australia, Brisbane City Council encourages rooming houses as a way to help with the supply of good quality rental accommodation. Brisbane City Council's City Plan allows rooming houses with a maximum of five occupants. The property must comply with Council's Rooming Accommodation Code, which covers such things as fire safety and parking.

What are the benefits of investing in a rooming house?

There are many benefits associated with investing in a rooming house, including:

- Positive cashflow – With rooming houses typically renting for higher prices per room than traditional houses or apartments, they can offer investors a great way to achieve positive cashflow. It's not unusual for a rooming house to have a 10% rental return.

- High demand – There is often high demand for rooming houses, as they offer a more affordable housing option than other types of accommodation. This can help to minimise vacancy rates and maximise your return on investment.

- Capital growth potential – In addition to providing a good income stream, rooming houses also have the potential to increase in value over time, providing investors with the opportunity to make a profit when they sell.

If you're thinking of investing in a rooming house, there are a few things you should keep in mind:

- Location – Rooming houses are typically most popular in areas where there is high demand for affordable housing. As such, it's important to choose a location that is close to public transport, amenities and employment options.

- Research – It's important to do your research before investing in a rooming house. Make sure you are aware of the local market conditions and the potential for capital growth in the area.

- Finance – When applying for finance to purchase a rooming house, lenders will often require a higher deposit than they would for a traditional residential property. It's important to be aware of this and factor it into your budget.

If you're looking for an investment that offers good returns and the potential for capital growth, then a rooming house could be the perfect option for you.

If you’d like some help to find a rooming house for sale in Brisbane, please contact me - Buying Agent Enza Lyons at Property Deals Group. I often get rooming houses for sale, but they do sell quickly. By joining my Property Deals Club you’ll get early notice of any rooming houses on the market. Go to propertydealsgroup.com.au to register now.

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