In the past, share houses were associated with partying, dirty dishes and over cramped spaces – occupied by students and young people.
Today, this perception has changed. Rising house prices has resulted in young adults living at home longer, first time buyers struggling to enter the market and an increase of tenants in the rental market.
We recently interviewed Thomas Clement CEO of Flatmates.com.au on how consumers are now opting for share housing arrangements in order to save money on the bills or mortgage, rental overheads, or to put towards a home deposit.
But it isn’t just those in their late 20s and 30s choosing this change. The asset rich cash poor 60+ age group is the fastest growing demographic for share housing.
So, if you’re looking to save money for an investment, need a little extra cash or are hoping to buy your own property here is how embracing share housing might help get you there faster.
1. Move to a share house
Contrary to popular belief, the majority of share-house residents are not university students in their early-20s - they’re working professionals with above average incomes at a median age of 27.
While it may seem daunting at first, there are many benefits to share housing – the biggest being cost. According to Flatmates.com.au by living with one other person you could save $128.74 on average a week.
If you pay your rent weekly, that’s close to a saving of $6,700 a year. On top of the financial benefits, share housing may also provide you with the opportunity to live closer to the city, an option often not available due to cost.
2. Rent out your spare room
If you’re looking to pay down your mortgage quickly or alleviate some financial pressure, consider renting out your spare room. Statistics from Flatmates.com.au show that 32% of the rooms listed for rent on their site are offered by owner-occupiers.
If the average rent for a room is $17,000 a year and the average cost of a mortgage is $32,000 per year, you could halve your payments by taking in a boarder.
Similarly – if you’ve nearly paid down your mortgage on the family home, renting out a room might be an easy way to generate additional income.
3. Team up
Flatmates.com.au and other rental sites have created a functionality called ‘team-ups’ – connecting people who have common property goals. A team-up allows strangers to connect online, meet up and then search for a property together.
Team-ups are most common with rental accommodation but have also been used for property purchases.
4. Consider ‘rentvesting’
If living close to the CBD is important to you ‘rentvesting’ could be something to explore. ‘Rentvesting’ enables property owners to live where they want and invest in a more affordable area.
If you’d like to purchase an investment property, and want to continue living in rental accommodation, a share house could be the best option.
5. Go online
In the past, in order to find a share house or house mate you would have to take out an ad in the paper. Today, you can create an online profile, instant message potential housemates and see photos of a property before you even inspect it.
If you’re looking for new accommodation or to fill a room, you might consider listing it on a share accommodation website or Facebook rental community page.
How can we help?
In some cases Liberty can take the additional income earned from a boarder into consideration when you apply for a home loan.
If you’d like to know more about this, or any of Liberty’s products, get in touch with one of our Advisers today.