The neighbour across the road is moving out and asked if I want to rent his 4 bedroom house. He knows me well so he's willing to give it to me cheap for $700pw rent (it's generally $950-1000pw here). It's about 200mtrs to the main shops - the location is unbeatable really. I just did some searching around and it seems like rooms here rent for about $300-350pw. I was thinking of sub-leasing out each room separately (he's ok with this, he just doesn't want the hassle of managing it himself, as long as it's all taken care of by someone he trusts). Seems like an opportunity to make some easy pocket money on the side. I know other landlords squeeze like 4 people into bedrooms in such highly sought after locations but I'm not interested in this - just one person (or couple) per room. Part of being a good investor is managing risk and I'm not looking to jeopardise all the other stuff I've built up by breaking the law (e.g. imagine if there was a fire, I'd be screwed). So I guess I'm looking for a quick crash course on: 1) What's the legal limit? E.g. if a few couples move in, that could quickly amount to 8 people. In QLD it's only 5 unrelated parties. What's the rule in NSW? 2) Since I'm sub-leasing, will there be implications on me taking out landlords insurance? 3) What else should I consider? I've have quite a number of properties of my own but they're all managed by agents. I have also self managed before, but A) not in NSW, and B) not one room at a time. Since I live across the road it almost seems like a no-brainer for me to handle this myself. I just want to make sure I have all my bases covered.