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CO-LIVING
What is co-living?
A co-living house is a shared living arrangement where up to three individuals live together in a single residence, each having their own bedroom and ensuite bathroom while sharing common areas such as kitchens, laundry and living rooms. Co-living spaces are designed to foster community, affordability, and convenience, making them popular among young professionals, students, and others seeking a more communal lifestyle.
The Residential Tenancies Act 1997 defines any residence where one or more rooms are available for occupancy when rent is paid, and four or more unrelated people live in the building as a rooming house. Therefore, as long as there are only three or less people in the house and the house is less than 300m2, the residence will be classified as a co-living house avoiding the unnecessary cost of complying with the National Construction Code (NCC) 1b classification.
Co-living houses have risen in popularity recently with single lone households being the fastest growing household type in Australia. Due to rapidly rising building costs during COVID (+40%) and a strong increase in rents, 5-9 bed rooming houses were unable to fill the gap due to the higher development costs.
Like a rooming house arrangement, the landlord typically furnishes all common areas and pays for all utilities, cleaning of common areas and maintenance of outdoor gardens and lawns. This allows the tenant to pay rent that is all inclusive of costs.
Unlike rooming houses, co-living houses do not require you to be a registered operator.
There are no restrictions on where you can build a co-living house in low density residential areas, however they are more commonly built in urban and suburban areas. These areas have a high demand for affordable rental housing and are near universities, city centres, or areas with good public transport links. In rapidly growing suburban areas, co-living houses can meet the needs of people seeking affordable housing options close to employment hubs or educational institutions.
Why Invest in Co-living?
Investing in co-living has several advantages of traditional residential property including:
High Demand: There is a strong and increasing demand for affordable rental housing nationwide with single lone households now being the fastest household type in Australia. This trend is driven by factors such as an aging population, higher divorce rates, and a growing preference for independence among younger people.
Multiple Income Streams: Having multiple tenants on individual leases means you are highly unlikely to have a period of no rental income.
Attractive Returns: Strong rental yields up 50% higher than a traditional residential house.
Strong Depreciation: Purpose built co-living houses have multiple bathrooms meaning you have a higher depreciation deduction allowing stronger after tax cashflow.
Why use The Property Room?
We have built many rooming houses in Victoria and Queensland and are familiar with this type of living arrangement.
Builder: Experienced builders with fast build times
Design: Various designs from 3 to 4 bedrooms including rooms with private ensuite bathrooms. Only three tenants can live in a co-living house so the 4th bedroom can either be used as a common area or a private area for one of the three tenants. In our experience a 4th bedroom will lead to a better valuation.
Maximise Your Income: Earn three different rental incomes from $300-$400 per week per room per tenant.
Minimal Vacancy: We only build in high demand areas and provide a rental appraisal from a rental manager who can manage your co-living house tenants once construction is completed.
