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Renting out upstairs separately (Dual occupancy)

Discussion in 'Property Management' started by cherubym, 3rd Feb, 2016.

  1. cherubym

    cherubym Well-Known Member

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    Hi PCers,
    Looking to purchase a highset property in Logan that already has tenants downstairs, but upstairs is vacant. Utility metres are not separated. The current owner has been self-managing the property and electricity/water is included in the rent. There's no common area, apart from the frontyard. The backyard is clearly separated out between the two. Is it easy enough to rent out upstairs? Or does it normally take a long time to get someone who is willing to rent only upstairs?

    Cheers!
     
  2. RPI

    RPI Property Lawyer, Town Planner Business Member

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    Chances are this would not be approved under the Planning Scheme

    You should check that out first as an enforcement notice from Council will be expensive to deal with later. You may be able to get approval or it may be self assessable but make sure before you buy.
     
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  3. cherubym

    cherubym Well-Known Member

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    The council said its all good, as long as downstairs is legal height. So I'm just wondering if any form users here could shed some lights on how only upstairs can be rented out. The property has no heating or A/C, so utility fee should be quite cheap to be included in the rent.
     
  4. Xenia

    Xenia Adelaide Property Manager Business Member

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    Yes it can be done, it may take a bit longer on the market.
    If there is a blowout of electricity, water costs however it adds to the expense so that is a consideration.

    You also need landlord insurance for each tenancy and damage within common areas can't be claimed.

    Tenants viewing the property need to clearly understand the situation and I would suggest a rule book to keep the piece between tenants. Ie no Loud music or disturbances after 10pm, take out rubbish, parking in common areas or anything else that can reduce the length of one tenancy due to the behaviour of the other.

    Property managers would be able to do this too.
     
  5. Lambo

    Lambo Member

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    Make sure downstairs is legal height. I had an agent in Logan tell me a place was legal height downstairs and it turned out it wasn't.
     
  6. WattleIdo

    WattleIdo renovating Premium Member

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    Hi @Lambo, is that Urgup as your avatar? I lived there for close to a year back in 89-90.
     
  7. larrylarry

    larrylarry Well-Known Member

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    Legal height means at least 2.4m?
     
  8. Lambo

    Lambo Member

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    Yep! I was there last year. Awesome place.
    I believe it is minimum 2.4 for bedrooms measured from the lowest point of the ceiling.
    My most recent IP also had tenants in place downstairs which was not legal height. I ended up moving them out and am going to rent the place as a whole. Less rent but less hassle and don't have to worry about insurance issues if something goes wrong.
     
    Last edited: 18th Feb, 2016
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  9. Davothegreat

    Davothegreat Well-Known Member

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    Definitely 2.4m minimum for a bedroom. Not sure if it applies to living areas but you won't be able to mount ceiling fans or other obstacles if the ceiling is any lower than 2.4 regardless of the room type.

    Is there a fire barrier between the floors? If a fire occurs within the downstairs tenancy and damages property or worse yet injures or kills the upstairs residents and there was no barrier then you'll be up for it.
     
  10. brettc

    brettc Well-Known Member Business Plus Member

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    I can't speak for all policies but that's not quite correct in relation to ours (RentCover), and I would think similar applies to others. Insured correctly the common areas are still covered because one owner owns the whole property. With us that would mean having one RentCoverPlatinum policy which covers building and common areas to the whole property as well as landlords/contents to one unit, then have an additional RentCoverUltra policy to cover landlords/contents to the other unit.

    This is no different to a granny flat situation where you would do exactly the same thing.
     
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  11. mcarthur

    mcarthur Well-Known Member

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    IIRC, it's 2.4m over at least 50% of the room. There's other points about light (windows) and air as well, but the general assumption is that the height will break you before the other items. Note you'll need to have fireproofing between the stories - which may effect your height too. Also the underneath slab has to be 150mm (I think) above the surrounding land. Etc. Etc.
     
  12. Xenia

    Xenia Adelaide Property Manager Business Member

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    Hi Brett
    Thank you for clarifying, I have not worked with ebm very much, a few properties this year came through to us with ebm policies so I'm kind of looking forward to processing something through ebm to get a feel for it - kind of :confused:

    What about in a rooming house situation? Where each room is a seperate lease.
     
  13. brettc

    brettc Well-Known Member Business Plus Member

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    A rooming house is a different matter because of the shared facilities within the house. We don't do the landlord policies on them, best we could do is have a broker find the best cover they could for the property, but really you would be looking at defined events cover I believe.
     
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  14. cherubym

    cherubym Well-Known Member

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    That was exactly what I was quoted for a week ago. But I am getting rid of the tenants downstairs and find another tenant who will rent the whole property, so will need to update the policy and hopefully, less premiums with it.