Boarding House

Discussion in 'Other Asset Classes' started by Nbaird, 5th Jan, 2017.

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  1. Nbaird

    Nbaird New Member

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    Hi All,

    Ive got a couple of Boarding Houses subject to DA, one is almost ready to lodge, Be really keen to talk with people interested or have been able to complete. Im really happy with the team I have organised.

    Hope to hear from like minded people, Im in the Illawarra NSW
     
  2. Cooln

    Cooln New Member

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    I got a house at Illawarra NSW. 500 metre away from wollongong train station. I am the like-minded people but I have never done any conversion from normal house to boarding house.

    Do you just lodge to council for change of use or need architec to design for you?
     
  3. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    There is a lot of talk on the forums about areas and speculation on whats going up and whats down however there isn't enough talk about specific strategies (outside of timing of markets) such as developing, converting or building certain types of buildings, in this case boarding homes.

    I have 2 clients that have done boarding homes in Sydney and they have turned out to be awesome cash cows - we are talking about gross 15% yields on total development costs excluding depreciation or negative gearing.

    Resales are also strong as commercial lenders love them almost as much as childcare centres. The development falls under the NSW sepp. It would be great to hear about stories of other investors who have done similar developments.
     
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  4. Otie

    Otie Well-Known Member

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    A house I have just purchased is currently being used as a boarding house (transitional housing). From what I understand, the current owner does not have council permit for what he is doing. Its managed by a local property manager. Currently, its a normal house in a residential area, but each bedroom has a lock on it, as do the kitchen cupboards. We are getting vacant possession when we settle, however I am just wondering what are the pitfalls for this style investment property? From what I have come across in my 10 mins of research it seems to just be the insurance and the turnover of tenants? Is it difficult to get council approval usually? We are planning to just use it as a normal IP with one set of tenants, but I thought I should probably look into the boarding house side of it incase it is worth the hassle. Its in Melbourne.
     
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  5. ellejay

    ellejay Well-Known Member

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    Anyone done this in Melb? I've got a huge 4 bedder that would be perfect for this. About to be rezoned RGZ. Tried to rent by the room a while back but wasn't local enough to make it happen.
     
  6. ellejay

    ellejay Well-Known Member

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    Can't you just ask the seller what it was renting for and why he didn't go for consent. Also why are they selling?
     
  7. Marg4000

    Marg4000 Well-Known Member

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    Fire safety will be a big issue.
    Also area zoning may or may not permit this use.
    You will also have to meet boarding house requirements.
    Marg
     
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  8. Otie

    Otie Well-Known Member

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    According to the sellers PM, the seller is unmotivated and doesn't work, and cannot afford to keep the IP. I don't know how much of this is true though. I have not spoken to the seller, and the agent doesn't seem to know much of the back story.
     
  9. Otie

    Otie Well-Known Member

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    I did think that fire safety would be a big one. Not sure whats involved with this to be compliant. Currently its just like a normal house, but the locks on the bedroom doors. Each room has opening windows. Its actually 70's ex commission home. I might ring the council and find out what is required to make it compliant, then toss up if its worth it. What seems weird is the agent said the seller was only getting market value rent, which makes me wonder why you'd bother with it, unless he didn't want to advertise the fact he was getting above market rent since he isn't doing it legally.
     
  10. Joynz

    Joynz Well-Known Member

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    Minimum standards in rooming houses
     
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  11. Otie

    Otie Well-Known Member

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    Had a chat to my PM, she said rent yield wouldn’t be much better anyway, and definitely not worth the hassle.