Ok, before we get going, I think it's a good idea to briefly define what a Rooming House is and what a Share House is.
As we live and breathe Rooming Houses, we probably take for granted that many people may not know precisely how a Rooming House works, especially if you're just in the researching phase.
A Rooming House will generally refer to a type of investment property designed and approved to allow each bedroom to be let out separately. In Brisbane, for example, you're allowed up to five apartment-like semi-self-contained studio rooms, each let out separately.
Rooming houses will have a common area that includes a shared laundry, kitchen, and often a living room. These types of dwellings are certified as class 1B dwellings and have been specially designed to cater to separate tenancies.
The Brisbane City Council rules and definitions regarding Rooming Houses can be found here:
Brisbane City Council Rooming Houses
The Queensland State Government has provided some recent updates to the Rooming Accommodation guidelines. These are worth having a read if you are interested in pursuing one of these projects:
A share house refers to two or more people who live in a permanent rental and share the costs associated with maintaining the household, such as utilities and rent.
Firstly it should be pointed out that, as per the above definition, a Rooming House is a dwelling that has been specifically designed and approved to be rented out separately. Each lettable area is made semi-self contained and as livable as possible. Each space comes with its kitchenette, bedroom area, lounge, and ensuite bathroom. The rooms of one of our Rooming Houses are more comparable to an apartment than a room in a shared house. They are akin to and often referred to as 'Micro Apartments.'
Most share houses are traditional residential houses with parties sharing bills and costs. Often there are no special design features or characteristics for individually self-contained spaces.
The design of the rooming house is critical to the final performance of the investment, and we have taken years to refine our plans, as we know that a better design can make for a happier higher, paying tenant who is willing to stay longer.
Each of our designs has been developed and improved upon over several years, focusing on providing the most attractive end product for tenants at a reasonable cost. Some of the fundamentals that go into each of our designs include the following:
A share house, in comparison, will often not have any specialized design features to cater to the individual. Most share houses we see in Australia haven't been designed for share house living and have actually been designed for a family.
Some of our Rooming House inclusions that separate our builds from a standard home build include:
These inclusions combine with our designs and layouts to provide an end product far superior to a room in a standard residential dwelling.
With a rooming house, each room is generally rented out, including electricity and internet. This means the tenants don't need to worry about splitting bills or working out individual shares of the bills as they would in a share house.
A Rooming House is a dwelling specifically approved to be let out to individual parties. As part of this, a Rooming House will have a 1b approval.
Under the Building Code of Australia, two types of Class 1 buildings exist. These are Class 1a and class 1b.
According to the Building Code of Australia:
A Class 1b building is a boarding house, guest house, or hostel with a floor area of less than 300 m2 and ordinarily has less than 12 people living in it. It can also be four or more single dwellings located on one allotment, which are used for short-term holiday accommodation.
Alternatively, you can see the Australian Building Codes Board information here.
As a 1b dwelling, there are additional requirements that a rooming house must have to meet the NCC (National Construction Code) requirements. For example, Rooming Accommodation needs other fire safety requirements to meet the code.
Each of our Rooming House spaces is a semi-self-contained micro apartment. An advantage of this is that each of them is individually lockable as an apartment would be. However, a share house in Australia is generally not allowed to separate rooms that are independently lockable from the outside, and doing so will often result in large fines from Councils.
While under the rooming house code, there is a requirement for some shared facilities, which generally include a full kitchen and often a seating area, we have observed that tenants don't usually use any of the shared facilities other than the laundry. However, the laundries come equipped with two 10 kg washing machines, and tenants will often use these.
However, with all of the self-contained amenities in each micro-apartment, tenants can interact as much or as little as they please. This differs from a share house where there is a need for everyone to interact, as the private spaces are not as well equipped.
The managing of a rooming house is a specialized area of property management. The property manager manages five unrelated parties and ensures the investment yields the best rental. With five lots of rent coming in, a slight increase in each room can make quite a difference to the overall investment.
While there are specialized property managers, there is also a specialized property lease for a rooming house. However, these leases are only for 1b approved dwellings and are therefore not generally able to be used in a share house.
The specialized Rooming House leases give additional rights/power to the property owner through the property manager. These leases can include house rules, and with a breach of the house rules, a tenant violates their rental agreement.
These leases will include the following:
If you'd like some further information on Rooming House Leases, please click here.
Our clients will generally provide their rooms for lease fully furnished. This means that a tenant can move straight into their room and don't require any of their own furniture or fittings. In fact, many of these micro apartments come with everything, including cutlery and crockery, plug-in hot plates, TVs, bedroom suites, and furniture.
We have found that high-quality and attractive furniture packages have made for excellent rents and yields and attract a higher class of tenants.
Overall, a rooming house is far different from a share house. The designs and inclusions with a share house are far superior to what most share houses offer. With the Rooming Houses that we provide, a better comparison is with a block of five apartments than with a typical residential house.
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