Buying a boarding house
- Thread starter Elliotte
- Start date
Hey I met a Somersoft member and didn't even know! Your huge old chest freezer is going great guns and filled to the brim with meat already and many BBQs afoot by guests now.
Have you got tenants now? My poor pup is up to three checkups now at vet and one emergency surgery on her paw but finally looks like it is getting better!
Have you got tenants now? My poor pup is up to three checkups now at vet and one emergency surgery on her paw but finally looks like it is getting better!
And to think i almost took it too the tip, glad it's been useful.
Still waiting on getting tenants in, getting rather frustrated especially after spending 10K and a few weeks of 15 hour days.
Considering looking for a new property manager but not sure if the Tamworth market has just gone a little soft.
I did read this week that vacancy rates are now about 4.2% which does seem a bit soft. But to be honest I don't rate any of the property managers in Tamworth - they are hard to deal with, stressed and disinterested with a bit of a god complex towards locals. Next year I might get my property licence and challenge them I reckon.
Yes, you could be a property manager in your spare time, Elliotte.
(That's the first time I have ever used one of those face things.)
Actually most of my rejects end up in secondary or tertiary homelessness which is awful. There needs to be much more crisis care available, social workers, drug dependence units, juvenile intervention blah blah... A charity will try and throw me money - and quite a lot per night - to take someone off their hands but I refuse as they have problems that need addressing and I'm not the place for it.
I think my property model would be to rent houses off people like BMW and be upfront about paying them more than market rate - say 10% or something, then getting permission to furnish them, offer to do all repair/maintenance (not structural) and have permission to let them short term to groups in Tamworth. I turn away tonnes of people that want to share their own private space and not be in a guesthouse. I could fill multiple houses a week. There are about another 1000 workers coming to town soon for some big building projects. It would sort of be like the ADF model and I'd guarantee rent etc as I would be paying it weekly. Of course my return on all of that is taking a 300/week house, paying $330 for it and spending a few thousand on furniture and then putting groups in there paying $1000+ a week. The houses stay in better condition really than regular tenants as cleaning teams go in weekly, repairs are done urgently so it doesn't affect bookings, staff are always in and out to see if anything dodgy happening...
I'm a cashflow gal and I don't have the capital to buy any more property yet with Rex still be renovated - we have now starting peeling back the really ugly renovation of past to get back to bare wall or frame in a few spots. Would you believe we found an old copper boiler in one room. We wondered what the lump under the lino was hiding - a big square corner of the house covered over. Anyway that is my idea to keep me busy once kid starts school next year. I may even give up one of my Sydney guesthouses as the profit margins are too low with rent prices too high now here.
I think my property model would be to rent houses off people like BMW and be upfront about paying them more than market rate - say 10% or something, then getting permission to furnish them, offer to do all repair/maintenance (not structural) and have permission to let them short term to groups in Tamworth. I turn away tonnes of people that want to share their own private space and not be in a guesthouse. I could fill multiple houses a week. There are about another 1000 workers coming to town soon for some big building projects. It would sort of be like the ADF model and I'd guarantee rent etc as I would be paying it weekly. Of course my return on all of that is taking a 300/week house, paying $330 for it and spending a few thousand on furniture and then putting groups in there paying $1000+ a week. The houses stay in better condition really than regular tenants as cleaning teams go in weekly, repairs are done urgently so it doesn't affect bookings, staff are always in and out to see if anything dodgy happening...
I'm a cashflow gal and I don't have the capital to buy any more property yet with Rex still be renovated - we have now starting peeling back the really ugly renovation of past to get back to bare wall or frame in a few spots. Would you believe we found an old copper boiler in one room. We wondered what the lump under the lino was hiding - a big square corner of the house covered over. Anyway that is my idea to keep me busy once kid starts school next year. I may even give up one of my Sydney guesthouses as the profit margins are too low with rent prices too high now here.
While I'm chatting away I should tell you it all we had The Rexinox in the last few weeks - the one year anniversary of me buying Rex coincides with the Equinox ha ha.
We're going strong mostly fully booked with a wait list at times. We have just cleaned out the last place of junk - a storage shed. So it has taken a year to go from 32 rooms + outdoor areas full of junk down to not a single spot of junk! We have a super fun new bathroom custom made by a handyman. My tradie guests tell me it is a little dodgy but not like I see any of them offering to help out - they just whinge at me lol. I'll try and put some photos up.
We've got a good rep in town now. Have had a few incidents of scummy guests and most of them came by referral from JobLink which in town does provide money for accommodation. One suspected drug dealer, one nut case who passed himself off as working for me and collected some rent and took it! Fraud charges for him. One cash box gone missing. Lesson being of course not to let anyone else decide on my guests - I can't take any referrals at all.
A few fun problems that we didn't expect. Turns out the sewerage system was blocked from one end of the property to the other. I thought it was my son flushing a Happy Meal toy that started the issue but eventually we had to get someone with a water jetter thing. Raining pads and tampons and surgical stuff and rubber tubing and other drug stuff I reckon. Ahem. GROSS. No idea how long it had all been building up. Decades I guess.
We are still working with council on the fire upgrades. Latest news is we may avoid having to have sprinkler systems over side boundary windows which would save me $20K plus. But everything else is done.
I employ about five staff casually now so I don't have to scrub toilets myself or stay in the reception.
I'm pouring most profit back into projects around the house - we redid all the switch boards lately as one example. I've moved out of the house so I have some space and a better work-life balance. About 9 months in I finally started paying myself $1000 a week after having just had food covered and no real income and now it is close to double that at times with only a few hours work needed. So I am almost at that magic passive income people on here talk about. But I need to pay off my overdraft and credit cards still - I haven't touched them since buying the place and they are quite high! Trouble is I see the cash flow and think...mmmmm...what could we do this week with it? I'm not good with long term planning yet.
My son starts school next year so I am a bit worried about what to do with all the hours during the day and also that I won't be free to travel so we are about to start a couple of months of on/off travel to wrap up the year. Hawaii, Paris (bucket list for a five year old is Disney!), Iceland (bucket list for me to see Northern Lights) and Sri Lanka.
In January I need to decide if I want to start to step down the Sydney businesses or keep them going. I think I could almost replace the income just by focussing more on Rex and keeping our rates up and occupancy up and bills down and staff levels down. The profits in Sydney are small now. During the time I've been on AirBNB it has gone from something like 191 places for rent to 7500 in Sydney alone. Might be time for me to find the next new and exciting thing.
We're going strong mostly fully booked with a wait list at times. We have just cleaned out the last place of junk - a storage shed. So it has taken a year to go from 32 rooms + outdoor areas full of junk down to not a single spot of junk! We have a super fun new bathroom custom made by a handyman. My tradie guests tell me it is a little dodgy but not like I see any of them offering to help out - they just whinge at me lol. I'll try and put some photos up.
We've got a good rep in town now. Have had a few incidents of scummy guests and most of them came by referral from JobLink which in town does provide money for accommodation. One suspected drug dealer, one nut case who passed himself off as working for me and collected some rent and took it! Fraud charges for him. One cash box gone missing. Lesson being of course not to let anyone else decide on my guests - I can't take any referrals at all.
A few fun problems that we didn't expect. Turns out the sewerage system was blocked from one end of the property to the other. I thought it was my son flushing a Happy Meal toy that started the issue but eventually we had to get someone with a water jetter thing. Raining pads and tampons and surgical stuff and rubber tubing and other drug stuff I reckon. Ahem. GROSS. No idea how long it had all been building up. Decades I guess.
We are still working with council on the fire upgrades. Latest news is we may avoid having to have sprinkler systems over side boundary windows which would save me $20K plus. But everything else is done.
I employ about five staff casually now so I don't have to scrub toilets myself or stay in the reception.
I'm pouring most profit back into projects around the house - we redid all the switch boards lately as one example. I've moved out of the house so I have some space and a better work-life balance. About 9 months in I finally started paying myself $1000 a week after having just had food covered and no real income and now it is close to double that at times with only a few hours work needed. So I am almost at that magic passive income people on here talk about. But I need to pay off my overdraft and credit cards still - I haven't touched them since buying the place and they are quite high! Trouble is I see the cash flow and think...mmmmm...what could we do this week with it? I'm not good with long term planning yet.
My son starts school next year so I am a bit worried about what to do with all the hours during the day and also that I won't be free to travel so we are about to start a couple of months of on/off travel to wrap up the year. Hawaii, Paris (bucket list for a five year old is Disney!), Iceland (bucket list for me to see Northern Lights) and Sri Lanka.
In January I need to decide if I want to start to step down the Sydney businesses or keep them going. I think I could almost replace the income just by focussing more on Rex and keeping our rates up and occupancy up and bills down and staff levels down. The profits in Sydney are small now. During the time I've been on AirBNB it has gone from something like 191 places for rent to 7500 in Sydney alone. Might be time for me to find the next new and exciting thing.
I like the bathroom Elliotte; perhaps the build quality is dodgy, but otherwise drive on!
what's the procedure to get commercial lease of a boarding house? For a normal boarding house say 10 rooms, how much money I am looking to invest to start operating?
Too many variables here to give a straight answer Eli - where are you looking? Many of these are owned and self-managed as they are of a size which don't justify external management or permanent onsite management. There generally isn't a lease in place as it is self-managed not a situation where you will find an owner accepting of putting a lease in place with someone who is going to sublet the property.
