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There are certain strategies that can help maximise rental return for investors, but is renting individual rooms one of them?

There are certain strategies that can help maximise rental return for investors, but is renting individual rooms one of them?

Although renting room by room can be a profitable approach, you will need to cater for the risks involved. You may assume that by renting out individual rooms, you will receive more income; however, when a number of unrelated tenants live under one roof, the risks start to escalate, which may affect your cash flow. 


If you are going to have a number of people living in your property who do not know each other, then they may want added security. Each bedroom you rent out should have its own individual lock and key and all of the common doors, such as the front door, will need to be accessible for all tenants.


Most share accommodation properties will require some sort of furnishing. Whether you only furnish the common areas or all of the rooms, it will be an extra cost coming out of your pocket. There is also a good chance the furniture will sustain some wear and tear and unless a tenant admits to causing the damage, you will be responsible for the repairs.


Having a group of unrelated tenants living in one house could increase the amount of wear and tear on the property as each tenant will have their own friends and family visiting regularly.

Cleaning is usually one of the main sources of most arguments in a share house as not everyone will take on the responsibility of keeping the house tidy. This could result in a higher tenant turnover and may make it harder to find new tenants if the main areas aren’t kept clean.

You may want to consider hiring a professional cleaner, but this extra cost will come out of your rental income.


One of the possible issues you will need to consider with renting room by room is that you may experience a higher vacancy rate compared to renting a property with one tenancy.

Some reasons why room-by-room accommodation has higher tenancies include:

• Having a group of unrelated people living together could increase the chance of disagreements and result in people moving out on a more regular basis.
•If your tenant pool consists mostly of university students, you may find during the holiday break (November to February) it is difficult to rent out the rooms.
•Students may initially live in student accommodation but then move out after finding friends or a partner to move in with.

In order to cater for a higher vacancy rate, you will need to create a sufficient buffer for each room. Consider what type of tenant your property appeals too and if they are mostly students, you will need to budget for the university breaks.