Perth Guide to Share House Living for Property Investors
Perth Guide to Share House Living for Property Investors
For property investors in Perth, the share house market represents a significant opportunity for strong rental yields and consistent occupancy. This segment of the rental market, particularly popular among students, young professionals, and transient workers, demands a specific understanding of tenant needs and property management. Historically, shared accommodation has been a cornerstone of urban living worldwide, evolving from communal longhouses to modern multi-room dwellings.
Historical Context of Shared Accommodation
The concept of sharing living spaces is as old as human civilization. Early settlements often involved communal living arrangements for security and resource sharing. In more recent history, during periods of rapid industrialisation and urban growth, boarding houses and rooming houses became prevalent, offering affordable accommodation for workers migrating to cities. Perth’s own development, spurred by gold rushes and subsequent population booms, saw the rise of such housing models. Understanding this historical context helps investors appreciate the enduring demand for well-managed shared living spaces.
Understanding the Perth Share House Tenant
The demographic for share houses in Perth is diverse. Key tenant groups include:
- Students: Primarily from universities like UWA, Curtin, and Murdoch, and TAFE institutions. They often seek affordable housing close to campus, with good transport links and study-friendly environments.
- Young Professionals: Early to mid-career individuals looking for social interaction, cost savings, and convenient locations, often in popular inner-city or coastal suburbs.
- Transient Workers: Those on temporary contracts, particularly in mining or resource sectors, who need flexible, short-to-medium term accommodation.
- Backpackers and International Visitors: Seeking a social atmosphere and affordability while exploring Western Australia.
Each group has distinct priorities, from Wi-Fi speed and study spaces for students to proximity to public transport and social amenities for professionals.
Key Considerations for Property Investors
Investing in share houses requires a strategic approach to property selection, setup, and ongoing management. Perth’s diverse suburbs offer varying appeal to different tenant demographics.
Location, Location, Location
Proximity to essential amenities is paramount. Investors should target suburbs with:
- Universities and TAFE Colleges: Areas like Crawley, Shenton Park, Bentley, and Murdoch are prime for student housing.
- Major Employment Hubs: Proximity to the Perth CBD, Joondalup, or industrial areas can attract professionals and workers.
- Public Transport Networks: Access to train lines and bus routes is critical for tenants without private vehicles. Suburbs along major train lines are highly desirable.
- Lifestyle Amenities: Proximity to shops, cafes, parks, and recreational facilities enhances the appeal for all tenant types. Coastal suburbs like Scarborough and Fremantle also attract a strong market.
Property Suitability and Setup
Not all properties are ideal for share housing. Investors should look for:
- Sufficient Bedrooms: Properties with 3-5 bedrooms are typically the most sought-after.
- Multiple Bathrooms: A minimum of two bathrooms is highly recommended to avoid morning rush-hour congestion.
- Shared Living Areas: Adequate communal space for dining, lounging, and socialising is essential.
- Outdoor Space: A garden or patio area can be a significant drawcard.
- Storage: Ample cupboard and storage space for multiple tenants is important.
Data Point: Properties with an additional bathroom compared to similar-sized single-occupancy homes can command up to 10-15% higher rental income in the share house market.
Furnishing and Inclusions
Most share houses are rented fully or semi-furnished. Essential inclusions typically include:
- Common Areas: Sofa, dining table and chairs, television.
- Kitchen: Refrigerator, oven, microwave, toaster, kettle, basic cookware and utensils.
- Laundry: Washing machine.
- Bedrooms: Bed frame and mattress (though some tenants prefer to supply their own).
- Utilities: Reliable high-speed internet is a non-negotiable for most. Consider including water and electricity in the rent or setting up a fair cost-sharing system.
Durable, easy-to-clean furniture is a wise investment for long-term wear and tear.
Legal and Management Aspects
Navigating the legal framework and management responsibilities is crucial for successful share house investing in Western Australia.
Lease Agreements
There are two primary lease structures:
- Individual Leases: Each tenant signs a separate lease for their room and a share of common areas. This is generally preferred by investors as it simplifies bond management and responsibility for rent if one tenant leaves.
- Joint Lease: All tenants sign one lease agreement. This is simpler to manage but means all tenants are jointly and severally liable for the entire rent, and the departure of one tenant requires a lease variation or replacement.
The Residential Tenancies Act 1987 (WA) governs all rental agreements and provides a framework for tenant and landlord rights and responsibilities.
Bond and Rent Collection
Bonds are typically held by the Rental Tenancies Bond Administrator (RTBA). Consistent and timely rent collection is vital. Property managers are highly recommended for this, especially for out-of-state investors.
Property Maintenance and Upkeep
Regular maintenance is key to tenant retention and property value. This includes:
- Routine Inspections: Conducted according to legal requirements to assess property condition and address minor issues.
- Repairs: Promptly addressing maintenance requests to ensure tenant satisfaction and prevent larger problems.
- Cleaning: For properties where common areas are cleaned professionally as part of the rent, clear schedules must be maintained. For self-managed cleaning, clear expectations must be set.
Historical Note: Early boarding houses often had strict rules regarding the maintenance of personal spaces and shared facilities, a principle that remains relevant today.
Tenant Screening and Selection
Thorough tenant screening is essential to ensure reliable occupants. This includes:
- Reference Checks: Contacting previous landlords.
- Credit Checks: Assessing financial history.
- Employment Verification: Confirming stable income.
- Interviews: Assessing personality and compatibility, especially in a shared living environment.
Maximising Returns and Minimising Vacancy
To achieve optimal returns, investors should focus on creating a desirable living environment. This includes ensuring all utilities are functional, the property is clean and well-presented, and a good relationship is fostered between tenants and the landlord or property manager.
Perth’s property market, with its growing population and diverse employment sectors, offers a robust environment for share house investments. By understanding the historical precedents and contemporary demands of this market, investors can create successful, high-yielding properties.