Warning! Do Not Engage A Rooming House Builder Until You Have Read This
Investing in a Rooming House in Brisbane is one of the most lucrative investments you can make. However, using the wrong Rooming House Builders can cost you time and money, reducing your profits and risking your financial future. At The High Yield Property Club, we have over twelve years of experience in working with Rooming House builders in Brisbane.
We guide our clients through the process of building, managing, and profiting from Rooming Accommodation investment in Brisbane. Using our comprehensive knowledge, we’ve created a selection criteria for choosing the best Rooming House builders to safeguard your investment and set you on the path to success. We will share the key points with you in this article.
Why Should I Build Rooming Houses in Brisbane?
Brisbane is one of the fastest-growing capital cities in Queensland, with the Federal government forecasting a massive 16% growth by 2032. Coupled with a projected property market increase of 30% to 40%, it’s clear that Brisbane is a lucrative location for savvy investors.
While there is a high demand for housing, the supply is low. In fact, for one demographic, single-person residents, suitable housing options are virtually non-existent. That’s where Rooming Houses come in! Rooming Houses provide a solution for those seeking
affordable one-bedroom housing while maintaining the look and feel of a home. They are ideal in urban and suburban locations and offer investors a high-yield rental return. With The High Yield Property Club, our Brisbane Rooming Houses generate an 8%+ return, making them an attractive option for new and established investors.
Issues to be Aware of When Building A Rooming House in Brisbane
Building a Rooming House in Brisbane is more challenging than purchasing a land package with a house from a developer. Since the property is built on established land, following all regulatory codes is essential. According to the Brisbane City Council, all Rooming Houses must have the correct building classification for their specified use.
Some properties may require a building development approval laid out in the Dwelling House Code. It must also comply with the Rooming Accommodation Code set forth in the Brisbane City Plan 2014. You also need to apply for approval for the occupation of a building along with possible additional applications through the City Council.
Another important aspect to consider is the Rooming House Design. Simply throwing up a building and adding rooms for tenants isn’t enough. You want to ensure you create a welcoming and inviting space, inside and out. It should have thoughtful design elements to attract your ideal tenant. What makes a Rooming House attractive to tenants?
An Outdoor Living Space :
Brisbane is a gorgeous city with hot summers and mild winters. Young, single tenants want access to attractive outdoor spaces where they can relax and entertain. By adding individual or shared outdoor living areas, you make your Rooming House feel like a home.
Separate Bedrooms :
The Rooming House ideal tenant is a single person with a steady job searching for affordable housing options. While there are studios available, the open concept lacks privacy. Rooming Houses offer a separate bedroom, bathroom, kitchen, and living area in every room, making them an attractive option. For the same (or less) than studio apartments, tenants can have a private space that fits their needs.
Solar Power :
Solar power is an excellent way to lower costs and increase the sustainability of a Rooming House. Younger adults are incredibly invested in the environment and look for earth-friendly options whenever possible. Offering solar power shows your commitment towards sustainable practices, which sets your Rooming House above the rest.
The Top 4 Things to Look for in Rooming House Builders
When searching for Rooming House builders, there are some extremely important things you should look for. Ensuring your contractor meets these guidelines is the best way to guard against builders going bust and threatening your investment.
Experience in Building Rooming Houses :
Brisbane is a relatively small market when it comes to rooming house builders. And they vary greatly in quality, service, price and experience. Using builders who specialise in Rooming Houses is vital to meeting codes and ordinances and safeguarding your investment. Your builder should have at least five years of experience working on Rooming Houses, ten years of experience in building homes in Brisbane, and possess a comprehensive understanding of all Rooming House requirements. This includes the updated regulations specified in the National Construction Code Ignoring these requirements could be a costly mistake, causing financial distress in the future.
Experience with Older Blocks of Land :
Many Rooming House investments are built on older blocks of land due to their sought-after Brisbane City Council location. They are very different from building on large, brand new housing estates.
While there are many benefits to choosing these lots, there can be numerous additional costs. A few common issues include build over sewers, easements, retaining, unwanted trees, zoning, and many other set backs. Qualified Rooming House builders have encountered these problems before and know how to address them quickly and cost-effectively. They will know the problems prior to the build, and be able to address them.
One of the most common problems with using inexperienced rooming house builders is that they will quote on a particular block making their build look like the cheapest option, then after the contract is signed they will tell the client that there is an unforeseen variation in the build, costing the client tens of thousands of dollars in out of pocket expenses that they did not borrow money for. We have seen this practice with inexperienced rooming house builders too many times.
Financial Stability :
An investor’s biggest fear is having their contractor walk off the job or go out of business mid-project. And this is a very valid, and very real consideration… one that needs to be taken very seriously. According to Business Insider, hundreds of builders in Queensland are at a high to severe risk of failure, with many already going out of business within the last twelve months.
Additionally, an analysis by SVP Partners places construction as one of the top fields with a high financial risk. Many of these building companies have a high staff turnover rate, which can slow your build and cause it to go over time.
Another consideration of financial stability is client and build volume. Has the builder taken on too many builds and too many clients than they have capacity for? Check if the builder has dealt consistently with volume building over the last five years at least – ideally ten years. New builders taking on too many builds will not only cause the builder to provide sub-par service, but also puts them at risk of financial and operational instability.
Additionally, rooming house builders will quote as cheaply as possible in order to win the business. This will cause them to create a cheap end finish – which is definitely not recommended when building a long term investment asset that will be worth over one million dollars once completed. Sadly, these “cheapest option” build prices also can come with the corner cutting when it comes to retaining, building to plan, and adequate site preparation which can have significant consequences.
These issues above put enormous financial burden on the builder, which can eventually lead to shutting their doors.
To avoid this nightmare scenario, choose a building company that has maintained their work crew anywhere from five to thirty-plus years. The more established the contractor, the higher the chance they will have the financial stability to continue working on your rooming accommodation build.
At the High Yield Property Club, we have significantly upgraded our comprehensive financial stability criteria and checks, and have a panel of builders to avoid these problems.
Quality Materials :
Many Rooming House builders will give you a cheap quote to undercut the competition and win the bid. While using the least expensive builder may be tempting, you often get what you pay for. Cheaper builders use cheaper materials, which can cost you more in the long run. Their concern isn’t about creating an incredible property that attracts tenants; it’s the bottom line.
Your Rooming House is an investment in your future, a legacy for generations to come. It is a million-dollar investment, and you can’t cut corners. The right builders will use high-quality materials and finishes that will last the test of time. You will have a better return on investment, better quality tenants, and an end product you can feel proud of.
What to Avoid When Selecting Rooming House Builders
Now that you know what to look for with your Rooming House builders, it’s important to know what to avoid. While many contractors talk a good game, their history and experience is what matters
Newly Established Rooming House Builders :
As the Brisbane population grows, many contractors are looking to cash in on the housing crisis. They see the need for builders, and they are more than happy to acquiesce. Unfortunately, many have little to no experience with building Rooming Houses, which can mean trouble for unsuspecting investors. While they may know about residential construction, they lack the expertise to deal with the specific requirements of Rooming House builds.
Before hiring a builder, research the company. Make sure the company is at least ten years old. Never settle on a contractor that doesn’t fit all the boxes outlined above. Your Rooming House is a large investment, and you want your rooming house builder to be able to handle it the right way from the beginning.
Out of State Builders :
Every state in Australia has specific codes and laws for Rooming Houses. If you use a builder from another state, they may not have the comprehensive knowledge necessary for adhering to these laws. Queensland has strict coding for all Rooming House properties, and it’s vital to undergo the correct procedural requirements. A builder may tout their experience working in the industry for years, but it must be within the state.
Shady Ethical Practices :
As we stated before, many builders only care about making money. They have no problem cutting corners to lower costs while still charging you for high-priced materials. Beware of shady ethical practices and only use builders who are transparent and open about the entire process.
They should willingly show you their credentials and be upfront about all costs and timetables. Again, ask other investors, property managers, or past clients about their experiences with the company. They will tell you the truth and save you from making a costly mistake.
Why You Should Use The High Yield Property Club
At The High Yield Property Club, we have over twleve years of experience working with Rooming House builders. While many building companies say they will save you money, our extensive connections with the most trusted Rooming House builders in Brisbane ensure we can complete the build with the best value for money.
We work with a panel of builders who are financially vetted and proven trustworthy. At The High Yield Property Club, we complete the entire process from land sourcing to building, providing greater value for your money and unparalleled peace of mind. See why we are the most trusted name for investors seeking the financial freedom owning a Rooming House delivers.
Contact us today to discuss your rooming house building needs