Home and Income sizes, BIG or Small

[Jarm]

Hi all,

What are your thoughts on buying big home and income properties. We have been looking at 5 or 6 bedroom places upstairs with 2 bedrooms below. How easy to rent out the 6 bed part in peak season in Wellington. I know the draw backs are probably students may be the only parties interested what are the other things to think about/concerns and positives. What should I make sure I check in due diligence process?
Are sticking to 3bed plus 2bed are better option?

Regards

Jarm

[Orkibi]

Hello Jarm.

Home and Incomes are good for better cash flow producing properties.

2 Separate dwellings are always better then up and down situation BUT if it is a good Deal and there is good floor insulation between the units then that could be an okay.

Main things to look up for is:

1. Both flats are fully legal and the local Council acknowledge the 2 inhabitable area with 2 legal cooking facilities.
--- Get a LIM and look at the property file and talk to the council.

2. there is a proper fire rating walls and ceiling between the units

3. separate electric and water meters.

4. If it is a rental property, talk to the property manager and or vendor fins out about occupancy rates or if they have any long term issues with tenants etc.

I hope that helps

[PatMat]

If you rent the 5-6 rooms flat by room (instead of to a single tenant) you risk being treated as a boarding house. That may turn your residential property into a commercial category with many negative consequences - lower LVR requirement, higher insurance, stricter fire safety rules, etc.