The Power of Positively Geared Investments with Co-Living: How Rooming Houses Can Boost Your Real Estate Returns
As interest rates and the cost of living continue to rise, more property investors are seeking solutions to maintain positive cash flow and future-proof their portfolios. At Jabel Property, Melbourne's leading Rooming House investment and consultancy agency, we have seen how co-living properties such as rooming houses can be a powerful tool for investors aiming for passive income. In this post, we break down the advantages of positively geared investments through co-living and why this strategy is gaining traction among savvy investors.
What Is a Positively Geared Investment?
In simple terms, a positively geared investment is a property where the rental income exceeds all ownership costs, including the mortgage, management fees, maintenance and other outgoings. This means your investment generates surplus cash flow each week. For investors, this approach provides a buffer against changing market conditions, helps cover unexpected expenses, and allows for greater flexibility as your property portfolio grows.
Learn more about positive gearing.
Why Co-Living and Rooming Houses?
The traditional residential investment property (such as a single-family home or standard apartment) might only bring in one rental income stream. In contrast, rooming houses or co-living properties are purpose-built or converted homes, designed to accommodate multiple unrelated tenants, each with a private bedroom and shared living facilities.
This structure allows investors to collect multiple streams of rent from one property. Not only can this significantly increase the property's cash flow, but it also spreads your risk across several tenants instead of relying on just one or two. Read more about rooming house basics from the Victorian Government Consumer Affairs.
The Financial Benefits: Cash Flow and Beyond
Higher Rental Yields: Because you are renting out individual rooms rather than the entire house, the combined rental return is often much higher than a traditional lease.
Positive Cash Flow: Higher yields mean the rental income is more likely to cover all expenses, creating a surplus, or positive gearing.
Lower Vacancy Risk: With multiple tenants, the impact of one vacant room is much less than a vacant house, smoothing out your income.
Greater Flexibility: Co-living homes appeal to a wider range of tenants, including students, young professionals, and essential workers, keeping demand high even in changing markets.
Why Is Demand for Co-Living Rising?
Melbourne, like much of Australia, is facing record housing affordability issues and a rental crisis. As traditional rents climb, many tenants are looking for more affordable and flexible living options. Rooming houses and co-living spaces offer private accommodation at a lower cost, which meets the needs of a growing segment of the market. This is supported by recent housing statistics from ABS showing strong demand for shared accommodation.
Regulatory Support and Compliance
In Victoria, rooming houses are regulated to ensure tenant safety and housing standards. Investors must comply with specific building codes, management requirements, and ongoing registration processes. At Jabel Property, we guide our clients through every step, ensuring all properties meet the latest Victorian regulations for rooming houses.
How Jabel Property Supports Investors
We know that entering the co-living and rooming house market can be daunting for new and seasoned investors alike. Our team assists with:
Identifying and securing the right property in high-demand locations
Navigating planning, building, and compliance requirements
Designing rooming houses for maximum appeal and efficiency
Connecting with trusted property managers who specialise in co-living
Ongoing support to ensure your investment stays compliant and profitable
Case Study: Rooming House Success in Melbourne
One of our recent clients transformed an underperforming single-dwelling home into a compliant six-bedroom rooming house. Within weeks, the property was tenanted, generating more than double the previous rental income and consistently producing positive cash flow. Their investment is now protected against rising interest rates and market downturns, while also supporting Melburnians in need of affordable housing.
Is Positively Geared Co-Living Right for You?
If you are an investor seeking steady income, less exposure to vacancy risk, and a resilient asset class, co-living and rooming houses may be a perfect fit. It is not only about profits but also about providing valuable housing solutions in a tight rental market.
Take the Next Step with Jabel Property
Investing in cashflow positive co-living properties does not have to be complicated. With the right guidance, you can unlock the potential of rooming houses and create long-term wealth while helping address Melbourne's housing crisis.
Ready to explore rooming house investments? Contact Jabel Property today for a free consultation and discover how we can help you achieve your property goals.