NSW: Tenant sub letting property but willing to increase the rent reasonably

People,

If I own and self manage the property in Sydney NSW area, with 3 bedrooms + 1 study available, I assume then it is legally possible for 6 people to rent with minimum 6 months stay for each person ?

Can anyone please show me the law that states about the maximum number of occupant in a property ?

 

You need to google "boarding house legislation nsw".
I think (??) the maximum number of unrelated persons living in a property without running foul of the legislation is 5. (but don't hold me to that)

 

But it is not a boarding house, it is a normal residential property which happens to be available for rent to generate honest income that I will declare to ATO.

Since this is not an apartment unit, I guess there is no risk of sudden inspection which might scare or worry the tenants.

OK, I will look it up.

 

You don't have to try to convine me. Here's the link: http://www.adhc.nsw.gov.au/sp/deliv.../boarding_house_program/boarding_house_reform
It is 5 or more people that catches you.

 

Many thanks @Proper Property for the link, so I guess if it is just 4 people it is not classified as a boarding house.

 

wonder how it works if its for only 3people - 3 rooms

tenant's partners come time to time?

 

May want to check your landlord insurance policy on this.. I don't know much in this area, but may be an area of exposure!

 

@gach2 well if the "partner" comes then so be it, because in the legal contract there is only 4 names maximum to be registered due to the maximum limit under 5 before I need to get boarding house certificate.

If it happens to be more than 5 people in the house at the same time, then not so much to worry because this is not an apartment which is prone to sudden inspection.

 

This isn't as simple as you think.

If you have 3-4 of them on the lease they'll want to move out at separate times and get a replacement in. You'll be editing the lease a lot. You'll have to take care of common areas yourself as they won't. You'll have to take care of utility bills and possibly internet yourself as the rooms won't have separate meters.

The alternative is that you have a tenant on a head lease and let them sublet and sort out all the aforementioned stuff. The risk here is that he disappears and you're stuck with 2-3 uncontracted nobodies in the house.

For both methods check if your PM and insurer are on board.

 

Cool, thanks @D.T.
I just wanted to maxiize yield by cutting cost as much as possible.

perhaps AirBNB is the way to go here ?

 

i honestly cannot see it being worth the time for such a petty return

e.g rent = 400pw (tennants pays the bills and sorts everything out) and 30pw to pm to manage
rent to 4 parties = $150x4 = $600 pw ( bills are maybe 100pw) you have 4 parties = 4 headaches and you manage

$130 a week for what will end up as being a part time job is not really worth it

Now if you doing with 5 properties or a property that has 20 rooms and being able to save/gain $600 a week it may be worth for part time job. I still personally would not bother in this situation.

Unless your really strapped for cash and have no other investment/wealth creation option at this stage i would stay away from this option.