What Is a Rooming House? Your Complete Guide

Greg Khan
Oct 1
3 min read

If you’ve been exploring property investment in Southeast Queensland, chances are you’ve heard the term rooming house (sometimes called co-living or multi-tenant housing). But what exactly is it, and why are so many investors from first timers to seasoned SMSF trustees paying attention to this asset class?

This guide breaks down everything you need to know.

What Is a Rooming House?

A rooming house is a purpose-built residential property designed for multiple, independent tenants under one roof. Unlike a standard investment home with one tenancy agreement, a rooming house typically includes:

5+ bedrooms, each with a private ensuite.
6+ living areas, (One is shared).
Outdoor space for each studio.
1 x Shared common area — kitchen, living, laundry, outdoor space.
Individually leased rooms, each tenant has their own agreement.
Class 1B Building Code compliance, ensuring safety, fire and health standards.

Think of it as a hybrid between a family home and a small-scale apartment block.

Why Investors Are Interested

The rooming house model solves two problems at once:

Tenant demand: With housing affordability under pressure, many tenants prefer modern, private rooms with shared amenities at an affordable price. Vacancy rates are near zero in many SEQ suburbs.
Investor returns: Because each room is leased separately, the gross rent is significantly higher than a single-family tenancy. Well-located rooming houses regularly deliver 8%+ gross yields, with annual rent often above $100,000.

Legal & Compliance Requirements

In Queensland, rooming houses must meet strict rules to ensure safety and fairness. Key requirements include:

Building Classification: Class 1B under the Building Code of Australia.
Council Approval: Development and planning approvals specific to rooming accommodation.
Fire & Safety: Upgraded fire systems, smoke alarms, emergency exits.
Residential Tenancies and Rooming Accommodation Act 2008: Governs the rights of tenants and landlords in this model.

Tip: Always confirm your property is fully compliant before tenants move in. Non-compliance can mean fines, insurance voids, or tenancy disputes.

How the Numbers Work

Let’s compare a standard investment property vs. a rooming house:

Feature	Standard Home	Rooming House
Tenants	1 lease	5–6 leases
Gross Rent	$600–$750 per week	$2,200–$2,500 per week
Annual Income	$31,000–$39,000	$100,000–$120,000
Gross Yield	3–5%	8%+

Of course, you’ll also need to account for management, higher wear & tear and specialist compliance costs. But even after expenses, net yields remain attractive compared to traditional residential property.

Why Southeast Queensland?

Southeast Queensland is one of Australia’s strongest growth regions, thanks to:

Population growth driven by interstate migration.
Infrastructure investment leading into the 2032 Brisbane Olympics.
A housing supply shortage and rising rents.

This creates a perfect storm: investors seeking yield and tenants seeking affordable, private accommodation.

Risks to Be Aware Of

Like any investment, rooming houses carry risks:

Management complexity: More tenants = more admin, included in your property management fee.
Maintenance: Higher use of shared spaces.
Financing: Some lenders are cautious; work with brokers experienced in this niche.

The good news? With the right builder, property manager and compliance framework, these risks can be managed.

Is a Rooming House Right for You?

Rooming houses aren’t for everyone. But if you’re an investor seeking:

Strong, predictable cashflow.
Lower vacancy risk.
A long-term asset positioned in a growth corridor.

… then this strategy may deserve a serious look.

At Elev8 Property Investments, we specialise in sourcing, structuring and supporting investors through every stage of the rooming house journey, from site selection to compliance, settlement and beyond.