Why rooming houses?

Investing in rooming houses can be a smart move—especially if you're looking for high yields, strong demand, and a way to contribute to affordable housing. Here's a structured breakdown of the key benefits:

Financial Benefits

• Higher Rental Yields Rooming houses typically generate 3–4 times the rental income of traditional properties due to multiple tenancies.
• Positive Cash Flow - With gross rental yields often exceeding 10%, investors can enjoy strong monthly returns.
• Tax Advantages - Rooming houses may offer greater depreciation benefits and can be exempt from land tax under certain conditions.
• Reduced Vacancy Risk - Multiple residents mean that even if one room is vacant, others continue generating income.
• Flexible Investment Strategy - You can hold the property for cash flow, land bank for future development, or convert it to a traditional rental later.

Social & Community Impact

• Affordable Housing Solution - Rooming houses provide accessible accommodation for singles, retirees, and low-income workers, helping ease housing stress.
• Diverse Resident Base - Residents often include healthcare workers, tradespeople, and hospitality staff—many of whom seek long-term leases.
• Community Contribution - By offering safe, regulated housing, investors help stabilise neighbourhoods and support local economies.

Operational Advantages

• Zoning & Planning Efficiency - In Victoria, Class 1B rooming houses can sometimes skip the planning permit stage and go straight to building permits.
• Portfolio Diversification - Rooming houses add a unique asset class to your investment mix, balancing risk and return.
• Location Leverage - These properties thrive near transport, employment hubs, and amenities—areas with consistent rental demand.