What Is A Rooming House - Everything You Need To Know

What is a Rooming House?

Rooming House Builders are experts in building Rooming Houses for our clients. So what exactly is a Rooming House? Well, we should start by providing you with a definition. A rooming house is a class of investment property that allows each room to be let out on separate leases. As an example, in Brisbane City Council Area, you can have up to five apartment-like semi-self-contained studio rooms, all let out separately.

Rooming houses have a common area that includes a shared laundry, kitchen, and living room. This type of dwelling is certified as a class 1B dwelling and has been designed specifically for separate tenancies.

What are the Rules For Rooming Houses in Brisbane?

The Brisbane City Council allows a rooming house to have a maximum of five lettable areas, with a maximum of five unrelated parties, and

a total floor area no larger than 300m2.

Please click here if you want further information on the Rooming House Rules for Brisbane.

What are the Advantages of a Rooming House?

Several key advantages are associated with Rooming Houses as an investment property concept. Below are some examples of the benefits offered by this exceptional opportunity include the following:

• Up to 5 different rents for one dwelling/block of land. They generally create a much better yield than a comparable single dwelling in the same area.
• There is a massive demand for these rooms, which are often entirely rented within days. We've found an excellent range of young professional tenants applying for these micro-apartments.
• When a tenant signs the lease, they agree to the house rules. If they break the house rules, they are breaking the agreement. There are both prescribed rules (apply to all rooming accommodations in QLD) and rules made by the property manager; this makes the tenants aware of the behavior standards of the property and gives greater control over leases.
• This is generally the best and highest land use for a low-density residential block.
• Each room is entirely lockable and independent.
• Risk mitigation: by having separate leases. If one person were to move out, you still have up to 4 rents coming in until a suitable replacement tenant is found.
• Only one set of rates is payable for the property.
• It provides affordable housing in areas where it may otherwise be unavailable.
• There is high depreciation due to the level of fixtures, fittings, furniture, etc.
• No Body Corporate fees.
• Provides positive cash flow and higher rental yields to the investor.
• In many instances, these dwellings are code assessable, meaning they don't require specialized development approval.
• A similar apartment development would incur massive fees. If you were to build a similar apartment project, you would be faced with hundreds of thousands in associated fees from Council, such as development costs, DA submissions, headworks, engineering, architects, town planners, and so on. Not to mention the huge cost of the higher-density land, which diminishes the investment yield. But with this product, we cut all of that out and don't have the uncertainty of waiting on Development Approval.

What do Rooming House rooms look like?

Each room in a Rooming House is semi-self contained and has been designed to be let out separately. Each has an ensuite bathroom, kitchenette, bedroom area, and lounge. The rooms are independent and lockable. They are akin to apartments and are often referred to as micro apartments.

See the below image of a rooming house room to give you more of an idea. 

Is there a demand for the Rooms?

There is significant demand for micro-apartments in Brisbane. Most rooms are leased out in a matter of days. We instruct the property managers to prepare tenants before property handover so that the investor has income as soon as the property is ready. 

We try to target areas where there is a demand for single accommodation and where there isn't much supply. In addition, we target areas with transportation, employment, and amenities. 

We have found a considerable demand from young professional tenants for this semi-self-contained product. Our property managers frequently have waiting lists of tenants ready to move into the rooms as they become available. 

Can they be two-story as well as single-story?

A rooming house can be both two-story and single-story. We design our rooming houses to best use the individual block of land. We have numerous two-story and single-story designs that we have

produced for satisfied clients.

Here is a single-story rooming house facade

Here is an example of a two-story rooming house facade.

Who manages the tenants?

Specialist property managers manage rooming houses. Therefore, you should engage a property manager with expertise and skills in these types of dwellings. Furthermore, property management is very important in each room's rent and investment yield. 

There are special leases for this kind of dwelling, and each individual signs onto a separate lease for their room.

Feel free to send through an inquiry if you want us to refer you to an expert property manager. 

What type of inclusions do they have?

We have refined our rooming houses over several years with our designs and inclusions to ensure that it is as appealing to tenants as possible. Also, we have extensively consulted with our professional and experienced property managers to put together a specification sheet that draws a high yield without capitalizing. 

The entrance doors to our rooming houses and each of the internal units have smart electronic locks that are wifi, and blue tooth enabled. This permits the property manager to change the pin codes externally if a tenant moves out. This keeps the property safe for current tenants and minimizes any mucking around with multiple sets of keys.

The shared spaces have a full kitchen and sitting area for residents. The kitchen has complete inclusions, such as stainless-steel kitchen appliances; however, we have found that most tenants just use their kitchenettes. The laundry has two 7-kg or 10-kg washing machines for tenants to use.

Included is a Wifi System with and Wifi boosters throughout the property, similar to what you might see in a shopping center, and Wifi Access points in each room for direct access. 

Each studio has semi-self-contained inclusions:

• A kitchenette with rangehood, sink, etc.
• Robes and storage
• Lounge and sitting area
• A full ensuite bathroom.
• Split-system reverse cycle air conditioners and ceiling fans.

The build of the property itself has been specifically designed and also includes the following:

• Acoustic Wall batts between the bedroom and bathroom walls,
• Acoustic batts Between Floor Levels and Ceilings in two-story designs.
• Two 250-liter hot water cylinders
• Acoustic doors.
• Solar panels are offered as an option.

We have been specifically designed to minimize the noise transfer between the apartments and maximize the privacy of the rooms. 

We have a specialist group that provides furniture packages for our micro-apartment projects. These packages ensure that a tenant can move in and have everything they require. 

We utilize a higher quality specification and inclusion for our properties which draws a higher quality tenant and sets our rooming houses apart from any others in the market. 

Where to from here?

If you would like to speak with a Rooming House expert about a potential rooming house build, please send through an inquiry and one of our consultants will come back to you.