Boarding Houses

Looking for an investment that combines high yields with steady demand? Boarding houses could be the answer. These properties are at the forefront of affordable housing solutions, offering investors a chance to secure reliable income while addressing a growing societal need.

What are boarding houses?

Boarding houses are residential properties that provide affordable, long-term accommodation to multiple tenants, typically on a room-by-room basis. Tenants share communal facilities like kitchens, bathrooms and living areas, but each tenant has their own private room. These properties often cater to students, lower-income earners and individuals seeking budget-friendly housing close to urban centres.

In Australia, boarding houses are highly regulated, requiring operators to meet specific safety, health and tenancy standards. They are often located in inner-city suburbs, close to universities, transport hubs and employment centres, making them attractive to both tenants and investors.

Recent trends with
boarding houses

With residential rents climbing across Australia, demand for affordable housing options has grown. In particular, cities like Sydney, Brisbane and Melbourne have seen an uptick in boarding house developments, driven by planning incentives and changes in zoning laws that encourage higher-density living.

The rise of new-generation boarding houses has also modernised the sector, attracting a broader tenant base. These properties often offer amenities like private bathrooms, air conditioning and secure access, appealing to tenants who value affordability without compromising on comfort. 

What is the future for
boarding houses?

As housing affordability continues to be a national concern, boarding houses are expected to play an even larger role in providing cost-effective accommodation. As such, government incentives for developers and investors, such as reduced fees and expedited approvals, are likely to remain a driving force. Furthermore, population growth in metropolitan areas will sustain demand for affordable shared housing, ensuring steady returns for boarding house investors.

Why invest in a
boarding house?

A boarding house investment’s ability to generate higher-than-average rental yields is a major drawcard. With multiple tenants paying rent, income streams are diversified, reducing the financial impact of vacancies. Boarding houses also tend to have lower purchase prices compared to other commercial properties, making them accessible to a wide range of investors.

Key factors to consider for a
boarding house investment

When buying a boarding house, it’s important to consider:

  • Location: Boarding houses in areas near universities, employment hubs or public transport attract more tenants.
  • Tenant demand: Research local demographics and the demand for affordable shared housing.
  • Compliance and regulations: Boarding houses must meet specific zoning and safety standards, which vary by state.
  • Maintenance costs: Managing multiple rooms and communal spaces can involve higher ongoing expenses.

To maximise your return on investment, consider targeting properties in high-demand locations with growth potential. Upgrading older properties to meet modern standards can justify higher rents and attract a more reliable tenant base.

Professional property management can also help ensure your boarding house operates efficiently and remains compliant with local regulations.

Why buy a boarding house
with Costi Cohen?

Buying a boarding house without expert guidance can lead to:

  • Purchasing in a location with weak tenant demand
  • Overpaying due to a lack of market knowledge
  • Overlooking regulatory compliance requirements

At Costi Cohen, we take the stress out of the process by providing expert advice and tailored solutions. Our team has extensive experience in the boarding house sector, ensuring we can identify high-performing properties that align with your investment goals.

Our approach begins with a detailed consultation to understand your objectives. We then conduct in-depth market research and due diligence to find properties that offer strong returns and long-term growth potential. From negotiations to settlement, we manage every step of the process, so you can invest with confidence.

How to finance the
purchase of a boarding house

Financing a boarding house differs slightly from traditional property loans due to its classification as a commercial or specialised residential asset. Most lenders consider rental income as a key factor when assessing loan applications.

Loan-to-value ratios (LVRs) for boarding houses typically range from 60-70%, reflecting the unique risks associated with this asset class. However, some lenders offer favourable terms for modern, compliant properties located in high-demand areas.

It’s advisable to work with a finance broker experienced in commercial and residential investment loans to secure competitive rates and terms tailored to boarding houses.

Explore some of our
Boarding House Purchases

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Costi Cohen — Australia’s premier commercial real estate consultants

Whether you’re a seasoned investor or new to the market, our expertise will pave the way for your success in commercial real estate. We’ve looked after more than 250 commercial properties and are prepared to help you discover your next investment opportunity. 

No matter your timeline, budget or preferred location, the expert team at Costi Cohen can help you find a commercial property that aligns with your needs. We invite you to get in touch with our team for a consultation today.

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