NSW Rentrepreneurs Soumen and Chaitali invested $15K and created a gross income of $66K using co-living conversions.
With a minimal investment, you can take a single-family house, add some safety features, and uplift your rental return. Read here how Soumen and Chaitali have done just that … and with a property, they don’t even own.
When our students, Soumen, an IT contractor, and Chaitali, expecting their first child, met me at a property conference in 2018, they were already holding several standard rental properties that were geared neutral and had just signed the contract on another property.
Aware of the shortage of appropriate accommodation and the need for more affordable housing in Australia, they were aligned with our mission to ‘reshape housing to make it affordable again‘ and had no hesitation in signing up to my program on the spot.
Excited about co-living investments and eager to learn the ‘Rentrepreneur’ strategy, Soumen and Chaitali focussed on what they could do personally to support their community.
Because they were expecting their baby, they used the waiting time to assess their portfolio, think about how they could move ahead financially, and familiarise themselves with the teachings and different scenarios they could apply.
They decided that it was my ‘Rentrepreneur’ strategy, which would be the best way for them to move forward.
READ MORE about why I don’t like negative gearing and my personal experience of losing a big chunk of money in my blog, The Real Truth about Negative Gearing.
Once they’d chosen the area where they wanted to set up the house, they took on an older style 5-Bedroom, 2-bathroom property.
They weren’t looking to purchase, so they used an investment that was owned by someone else. You can read more about how this strategy works HERE.
With an oversized master bedroom, it was easy for them to see that the property offered the potential of greater rental returns because of what they’d learned.
After asking for and receiving, the owner’s approval to add a dividing wall, they quickly created an additional bedroom, transforming it from a 5-bedroom property to a 6-bedroom house.
There is a particular method of installing dividers that we use and recommend, which function the same as a standard internal wall. These division walls have an extra advantage because they can be removed quickly and inexpensively.
This means that the property has the bonus of an additional room if the owner wishes to keep it that way.
The benefit is there if they decide to sell or decide to reinstate it as a ‘standard’ rental property.
Because they’d carried out their research, gone through the training materials, and used our spreadsheet calculators, Soumen and Chaitali knew the most important factors to look out for and where they could find potential cost savings for the best outcome and fastest return.
That initial time and research meant that their initial investment was returned in only around eight months.
SCROLL DOWN FOR THE PROJECT FINANCIALS!
As a standard single-family property, the house would rent for $500 a week, but now converted to six affordable accommodation options, it rents for $1,275 per week!
As well as getting a financial benefit, by applying what they had learned through the education program about resident selection, coupled with tuned intuition, they have successfully created a harmonious and happy micro-community within the household. So it’s a win-win for the community and the investors.
The residents are so happy that half of them have stayed on now for more than a year.
Their initial success gave them the confidence to invest in a second co-living property. Soumen and Chaitali’s goal is to complete another two ‘Rentrepreneur’ deals next year, which will provide them with a healthy return of around $1,500 every week.
In their own words, “We believe there is a lot to learn in this, once we have grasped the business, and developed a system, we will then take it up to the next level.”
Soumen also explained how well the model has worked, even overseas; “My brother, who is in India, took the concept and started building his business in 2018. He got so involved and busy with this business that he left his job to do this full time within a few months.”
“We are so fortunate to have found Ian and Christine and the whole HI-RES team to help us learn and give us support through our journey.”
PURCHASE PRICE: Not Provided
RENOVATION COST: $15K
RENTAL RETURN WEEKLY
$500 per week
$1275 per week
$775 per week uplift
$26,000 per year gross
$66,300 per year gross
$40,300 per year uplift