Rooming Houses… What I Think

Hi all,

I was recently asked my thoughts about rooming houses, and thought I would post my reply below, in case anyone else is interested.

***

I don’t own rooming houses, so I don’t feel I have enough knowledge and experience to comment on them as a strategic investment, sorry.

Generally speaking though, I would make these observations:

a. It is residential property, used in a commercial way (i.e. scale)
b. There are tenancy and planning rules that will need to be closely followed
c. Management will be critical
d. The government has flagged it wants residential property for homes, not investments. It makes me wonder how rooming houses will perform in that landscape
e. When it comes time to sell, you will only sell to another investor. If the rules change to make rooming houses less favourable or profitable, you could experience a value loss

I recommend getting educated and informed on the risks and returns of the strategy.

All the best,

– Steve