A. Well designed, built and managed Rooming Houses can be the best residential investment possible, often on par with, and exceeding returns on commercial property, where yields are generally the best available.

There are several reasons why smart, informed investors are turning to Brisbane Rooming Houses rather than stand alone (Class 1a) houses and Commercial properties:

1. Multiple Rents – Due to the separate room rents, Rooming Houses provide multiple streams of income from one house.

2. Vacancy Mitigation – If one resident vacates without notice (a rare default), only 20% of income is lost, with  80% of income continuing to fund an investment loan.  This means the property remains cash flow positive. However, with a single income dwelling, 100% of income is lost when a tenant vacates or breaks a lease, until a new lease is signed.

3. Higher Yields – Separate room rents mean yields are at least double, and sometimes triple a Class 1a (single household) dwelling with the same floor area and room numbers in a neighbouring house. This means your Rooming House value exceeds a similar build in the same street.

4. High Demand – Renters love high-end modern Rooming Houses for the comfort and convenience of a house with furnishings, utilities and internet included in the rent, when compared to the value of renting an apartment or single household dwelling, where they need to add the extra costs of furnishings and services.

5. Selling – Should you decide to sell your Rooming House, demand exceeds supply. This demand results in the best possible price. The best sales agent understands both the residential and commerical investment buyer with a large database and target of both buyer profiles.

6. Depreciation Allowance – (For new builds), you enjoy fresh and hihger than usual depreciation allowance. Rooming Houses have depreciation benefits which exceed other assets due to furnishings and applicances inclusions, meaning an investor can depreciate the construction material and all chattels within the house. This results in higher than usual tax benefits.

A. When referring to Brisbane Rooming Houses, the short answer is yes…and no. Although people can understandibly be confused, there is a difference.

A Rooming House in Queensland is defined in State legislation as ‘rooming accommodation’ but classified under the Building Code of Australia (BCA) and the National Construction Code (NCC under licence from the BCA) as a Class 1b dwelling (boarding house).

Nationally, Class 1b dwellings are limited to  fewer than 12 occupants, however is limited by Qld State legislation to no more than 5 occupants and 5 rooms.

Class 1b Brisbane Rooming Houses are limited to 300m2 livable floor space, located usually in Lower Density Residential zones. In Queensland a Boarding House is generally understood to have more than 12 occupants, most commponly found in Medium Density Zones, categorised as Class 3 Buildings in the BCA and NCC.

Boarding Houses may hold more occupants, usually with an onsite manager. Rooming Houses do not usually have an onsite manager.

Boarding Houses typically have smaller, cheaper rooms, often catering to lower socio-economic occupants.

Rooming Houses generally cater for employed, middle income single adults.

A. No – while some students might choose to live in a Rooming House, most students will prefer to live on or near a campus with their fellow students.

Rooming Houses cater mostly to single, adult workers.

A. Across Australia, room rents vary depending on multiple factors including regions, council areas, neighbourhoods, proximity to amenities and infrastructure.

In Brisbane, a Rooming House room can rent from $300 per room per week, or over $500 per room per week depending on various factors including size and included amenities.

Room rents in the same street in separate houses can vary by $50 or more per room, simply by the quality of the dwelling, inclusions and room sizes.

For example, our Rooming Houses rent for as much as $140/week/room more than other Rooming Houses in the same street, in outer suburb industrial areas (up to – and even over – $500/room/week) by appealing to occupants who prefer to pay more, as counter-intuitive as that may appear to be.

It’s critical for your Rooming House success that an experienced, knowledgeable, preferably licensed manager is engaged to protect your asset, take care of your renters and ensure your best possible yield.

A. People like you and me. Rooming residents are no different to people who live in non-Rooming House dwellings.

Rooming Houses appeal to employed, middle income single adults. This demographic is growing and needs good quality, convenient, comfortable accommodation.

Australian government statistics (ABS) show the proportion of family households has been declining while single adults are increasing.

In 1986, families made up 77% of Australia’s households; in 2016 it was 71%. Over this same period, the number of single-person households increased from 19% to 24%.

Rooming House residents come from all walks of life; nurses, police officers, truck drivers, front line workers, retail, commercial and industrial workers, building workers, office workers, sales reps, IT consultants, developers etc. – with a proportion of occupants being single adult women over the age of 50.

They are sisters, mothers, brothers, aunties, uncles, nephews, nieces…often the people who serve you at the supermarket, drivers who deliver your food, keep us safe from crime, on call when we need an ambulance…typically Rooming House occupants service us all, and hold our communities together.

At Brisbane Roomig House, our occupants are typically doctors, engineers, business managers, government employees, IT developers, consultants, with most earning high, triple-figure annual incomes. 

A. This decision will be based on your personal and financial circumstances.

Generally speaking, it’s best to build a ‘fit for purpose’ Rooming House to provide residents with the best possible living experience and therefore attract occupants happy to pay more rent. This goes for anything in life. Better quality attracts a better price.

Why pay for an older house, never meant to be a Rooming House, then convert to something it was never intended to be, with all the conversion costs including full noise insulation, necessary for a successful Rooming House, only to end up with a fraction of the rent? Older houses with smaller rooms rent for less per room.

With recent property price increases, buying and converting an existing house can be as much or more than building new. Yet the new will provide better rent.

If you have an existing older house you’re considering converting to a Rooming House, weigh up the cost of conversion, including noise insulation, (meaning a total internal strip-out and refit). This may make the prospect less viable than a new build, depending on a variety of factors.

Renters prefer newer Rooming Houses with larger rooms, so will be happier and pay more rent.

Overall when you add up the costs of an existing, older house + conversion costs vs. new build, the rental income and return often favours new builds.

A. Valuing a Rooming House is much the same as valuing a Commercial property. The banks and informed valuers consider Rooming Houses to be ‘commercial’ properties, regardless of them being a residential dwelling.

Rooming House valuations are based on yield, or more specifically, the cap rate (rent less outgoings), not comparable houses in the area.

To accurately value a Rooming House:

1. First add up the property’s total weekly rent.

2. Then multiply weeks in a year.

3. This will give you the total annual rent (gross income pa.).

4. Look online for the area residential rental yield (search for the suburb + yield). Investors like to earn much more than the area average yield, so double the yield to appeal to investors (this is a thumb-rule, as each investor has their own tolerance).

5. Deduct the cost of outgoings (depending on the house, around $15,000 – $22,000 pa).

6. Divide the net income pa. by the average commercial cap rate. The cap rate (i.e. capitalisation rate) is the commercial property return, which can be found on most commercial property listings web sites.

E.g. Rent : $440 per room per week x 5 rooms = 2,220/week

Annualised: $2,220 x 52 weeks =$114,400 gross pa. (Our Rooming Houses do reach these gross rental figues, and more).

Deduct outgoings. Let’s use $18,000 = $96,400

This is your net income.

Research existing up-to-date cap rate. At time of writing, this ranged around 6% in a large metro Eastern suburb capital city. We’ll use 6%.

Net income ($96,400) divided by the cap rate (6%) = $1.606m

A. The short answer is Yes.

We are able to accommodate your Super fund needs.

We work within the Australian taxation Office (ATO) guidelines to help you own one or more Rooming Houses in your SMSF.

A. Many investors aspire to owning a Rooming House. However, these residential investment assets are rarely available for sale due to the rental yield. Why would someone sell a Rooming House when it’s providing the best possible rent returns?
Partnering with a Rooming House developer can get you on track for your  own Rooming House.
You can Invest in Rooming House projects with as little as $100,000 to get double digit annual returns, or contract an experienced, knowledgeable specialist Rooming House developer to help guide you through the process.

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