I've checked out a 3 bedroom house recently with a shabby but separate 4 bedroom student accomodation unit at the back (which ressembled that house the community built for the Simpsons in one episode with mistakes everywhere!). I have a few reservations. If I factor in the P&I repayments/rates/stamp duty etc with the current rent (note the owner is collecting the rent on a monthly basis) and what I'm going to offer (which is close to what they'll accept) it turns out to be a pretty good return. My question is, are there legal limitation to the number of people who can live in a house? I would’ve thought so (when I think of commercial property with fire restrictions), but I’m wondering what the laws are?
There are a bunch of international students (all men btw) in both places and they've pretty dirty but at least the rooms didn’t look trashed (I didn’t even get to look at all the bedrooms for privacy reasons). I don't think I'd necessarily have to fix anything. Hell, they're living in it as is! The thing is, the land alone would be worth 150k less than what I'd offer so the buildings are pretty cheap, no matter what condition they’re in when I factor in the land value.
There’s nothing stopping the renters from leaving and I doubt I’d get anywhere near that much rent if there weren’t so many people crammed into the two places. What other caveats should I be looking out for? If I put in an offer, it will be subject to building and termite inspections of course.