All Topics / Legal & Accounting / Limit on maximum number of tenants for a house?

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  • Profile photo of tchtch
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    @tch
    Join Date: 2004
    Post Count: 10

    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.

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    Check if the second dwelling has been council approved and that the vendor provides such proof. That each bedroom has a smoke alarm (it is against the law in some states to sell a house without smoke alarms).

    There is no law limiting the number of people in a house, however there are regs which regulate boarding houses and the like. There is another poster on this board who owns student accommodation and she can provide a wealth of information.

    Profile photo of tchtch
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    @tch
    Join Date: 2004
    Post Count: 10

    Thanks for that. Have due diligence with the council on my letter of offer as well. And will check for the smoke alarms. Seems they were made compulsory here in Victoria some time ago. Will have to read up some more on the units. Re student accommodation, it wouldn't technically be defined as "student accommodation". It's just a basic 4 bedroom unit at the back of a block…. with a lot of students in it!

    Profile photo of yarposyarpos
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    @yarpos
    Join Date: 2004
    Post Count: 247
    tch wrote:

    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?

    not so much a legal limitation but a risk you might want to check.   If you plan on having insurance , check the T&C's of the policy as some companies have constraints on numbers of tenants and/or numbers of leases and/or duration of leases

    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.

    Profile photo of yarposyarpos
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    @yarpos
    Join Date: 2004
    Post Count: 247

    check insurance cover if you are having it.  some companies have issues with number of tenants,  and/or number of leases,  and/or minimum length of leases

    Profile photo of tchtch
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    @tch
    Join Date: 2004
    Post Count: 10

    yarpos,
    You mean landlord insurance? Not compulsory but I'll have to look into it with such a decent rental return, and in that case, I'm sure they'll check these points. Have to verify even if they've got a bond down.

    Profile photo of yarposyarpos
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    @yarpos
    Join Date: 2004
    Post Count: 247
    tch wrote:
    yarpos,
    You mean landlord insurance? Not compulsory but I'll have to look into it with such a decent rental return, and in that case, I'm sure they'll check these points. Have to verify even if they've got a bond down.

    yes I meant landloard insurance.  The overall policy can cover structure and contents, not just rental coverage.   Dont be so sure they will check these points,  mine didnt and I only twigged that it could be an issue do to a passing comment on a thread here.  The company doesnt care much about your risk they just want their premiums and to minimise their risk.   I was fortunate that the managing agent had stuctured it in a compliant way…..for that company:  one lease, 6 month minimum, all to sign.

    Profile photo of newbi2newbi2
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    @newbi2
    Join Date: 2008
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    Check with the council in your area PRIOR to submitting an offer on their "boarding house" rules. If you exceed a certain number of warm bodies that are unrelated in a house then it falls under the boarding house catagory and there are different fire codes etc that you will have to meet, particularly if you are in QLD (which was overhauled after the Childers Disaster).  If you find out prior to submitting an offer that this property is not recognised as such, and is in breach of the codes, then you will have a great bargining tool, ie if its sale price is derived partly or wholly from the rental income………..I am sure you understand.
    Mick

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