What Does Co-Living Mean For Women In Renovating?

Buying or renting property is out of reach for many people in Australia as property prices climb and rent increases, creating a housing crisis that cannot be ignored.

Jo Vadillo, one of our generous sponsors of She Renovates Live 2022, is working on an exciting renovation project that includes a strategy for providing affordable accommodation for those on a tight budget.

Jo has identified that women are a particularly vulnerable group who struggles to afford the high price of having a home to live in. She is determined to tackle the problem, so she has started renovating properties to create a co-living environment that has cash-flow benefits for her and makes having a roof over your head more affordable.  

Jo shared her ideas and insight on co-living with Bernadette Janson on an episode of the She Renovates podcast. She talked about what is meant by co-living, how it’s beneficial for women in renovating, and why it’s more affordable than living on your own. 

Co-Living: Affordable Accommodation For Women

To make good use of their spare time during lockdown, Jo and her husband Greg, who run two property-related businesses, began work on a property development in the Logan City Council area near Brisbane. 

It is one of two properties, both on large parcels of land, they own in the area. They had already done the DA (development application) to build on them, which was approved before they took the next step of getting a second title on one of them. 

The lot is 1000m2 with an old cottage on the front 450m2. Jo has tenants in the cottage who have been living there throughout the process and have been happy to go with the flow. 

At the back of the lot, Jo is building a dual-key property with two incomes under one roofline. It has three bedrooms on one side with a lockup garage and two bedrooms on the other side, also with a lockup garage.

Co-Living vs Rooming

The idea was born from the growing popularity of co-living, combined with the housing crisis that has developed due to people being unable to afford their rent. Jo says the largest demographic affected by the crises is women 55 and older. The councils have recognised the issue and are allowing properties such as granny flats onto the market. 

You could always have a granny flat, but until recently, the tenants had to be under the same lease as the front house or known to the front house.”

~ Jo Vadillo

Now you can have two separate leases on the same property. Because Jo has two titles on her lot, she can have three separate leases under her roofline, which is the limit under the housing legislation. Once you have more than that, instead of co-living, it becomes rooming.

The costs of building or doing a renovation for rooming are significantly higher than for co-living because you have to have disability access and ensure your building meets specific fire standards and rulings. There also has to be more off-street parking for cars. 

How To Configure The Home To Accommodate Multiple Tenants

In the two-bedroom unit, Jo will have one permanent tenant, a single person or a couple. In the three-bedroom unit, Jo plans to have two separate leases. Each person will get a private bedroom, and the person in the larger bedroom will also have the garage. The third bedroom could become a second lounge area or a work-from-home. 

Ideally, you want to have decent-sized bedrooms so that if the co-living tenants wanted a bit of privacy, they could comfortably retreat to their bedrooms. If possible, Jo suggests creating a courtyard off the bedroom as an additional personal space where your tenants can have a quiet cup of tea and not have to make eye contact with anyone.

You should have the same number of bathrooms as you intend to have tenants so that each person can have their own bathroom, preferably en-suite. For example, if you have a four-bedroom house that can accommodate three tenants under one roof, you should have three bathrooms.

The great thing about the configuration is that when it comes time to sell the property, it is easy to reconvert it back to a standard residential house, with the bonus feature of having three bathrooms. 

The person who buys your property could be another investor just like me, but it could also be a young family looking to break into the area that just wants a nice, generous home”

~ Jo Vadillo

To ensure a sense of privacy for each tenant, it is essential to have lockable doors in the bedrooms and bathrooms. It is also a good idea for each tenant to have their own lockable pantry. However, the kitchen and living space are shared.

Sharing The Bills Amongst Three Separate Tenants

In the case of Jo’s co-living property, each unit has separate meters for water and electricity so that each one receives different bills. On the side that accommodates two tenants, they will have to share the costs of the utilities between them. However, Jo is installing solar panels to reduce the cost of electricity.

Additionally, Jo is going to furnish the units with new, good-enough quality furniture that is durable. Her aim is to create a home that people can settle into. 

Co-Living Properties Provide Good Cash Flow For Property Investors

The co-living strategy for affordable accommodation not only makes provision for people who can’t afford their rent but results in good cash flow for the property investor. 

With rising interest rates and other factors, including the rising cost of living, you’re not going to be putting your hand in your pocket. When you have a co-living structure, you are going to be getting higher rent for that property.”

~ Jo Vadillo

You can ordinarily expect a 4% to 4.5% return on a rental property, but when you have multiple tenants under a single roofline, you can expect to get a return of 7% to 8%, possibly even more. It depends on what the property offers and where it’s located. 

Purpose-Built Property vs Retrofit Renovation For Co-Living

There are two ways to create a co-living home:

  1.   A new build where you build a purpose-built co-living property.
  2.   Retrofit, where you renovate an existing property to make it suitable for co-living.

The recommendation, especially for a new build, is to create a four-bedroom property with three bathrooms and a garage for two cars. The building costs for this type of property is about $400,000, excluding the cost of the land, the subdivision, site works, and the driveway, amongst other things.

It is vital to ensure that your floor plan makes sense. Each tenant must have their own bedroom and bathroom. If there is only a two-car garage, there might be an incentive that two bedrooms get a garage or car space each. The person living in the third bedroom should also get extra space, such as a small office area, for their exclusive use. 

The Importance Of House Rules For Multiple Tenants

The greatest benefit of having multiple tenants under one roofline is that if one of them decides to move, it doesn’t disrupt everyone else, and you can find a new tenant to take their place.

The owner of the property has the final say in who lives there, and they can determine the demographic of their tenants. For example, you can stipulate that the rooms are only on offer to women 55 plus. So if you already have a 60-year-old tenant, you can assure them that you will look for other people of a similar age or stage of life. 

As an investor, you must be transparent about this, and it is better for you to hold the property for a few weeks until your match the people well. Jo says you want ease. You don’t want complaints. Ideally, you want people to stick around for a long time. 

So putting a 24-year-old guy into a room where he has a 50-year-old female neighbour and in the other room is a 78-year-old female all under the one roof line, it’s not going to be a cohesive space. Approach it as you would a business, and always use your head when you’re doing this.”

~ Jo Vadillo

It is also a good idea to determine acceptable house behaviour and who has access to which part of the house. The house rules must also include information on what to do and who to call if something breaks. Each person is responsible for their own behaviour and is not a reflection of their fellow tenants.

Pets can be a complication, and many of the people wanting to sign a co-living lease have pets. If you agree that someone can have a dog or cat, you must ensure that it won’t upset your other tenants, especially if they don’t like pets or have allergies. 

Co-Living Tenant Demographic

Jo and Greg plan to give preference to women 55 plus. They have double-checked that they are working within the legislation and are able to offer these units to this vulnerable group.

Whilst these women of a certain age are certainly a large percentage of people in the housing crisis scenario, they also make really good, reliable tenants.”

~ Jo Vadillo

The ideal demographic in your area might be different to Jo’s. An affordable way to find out who is looking for accommodation in your area is to look at flatmates.com.au. 

Jo suggests that the best opportunities can be found within a drivable distance of a major hub, as there are always going to be housing shortages. She feels that rural or regional areas are not as desirable for people considering co-living.  

Inmates.com.au can help you determine who’s looking for one-bedroom furnished apartments in your area and what they are bringing with them. Do they have dogs or cats? Do they smoke?

According to statistics, there are currently 2.3 million people in Australia living alone, and that is projected to be 3.5 million people by 2041. While some cultures are accommodating of multi-generational households, for many, the children leave home as soon as they are able, leaving Mom and Dad on their own.

As the cost of living continues to rise, it becomes increasingly difficult for older people who no longer have a regular income to be able to afford to find a place to stay. Many have to move away from everything they know, their communities, hospitals and friends. Co-living makes enables them to stay close by.

Co-Living Legislation In Your Area

If you are considering creating a co-living property, it is essential that you do your due diligence and investigate your local legislation. Jo is familiar with the rules about shared rentals in Queensland because that is where her properties are, so she strongly recommends that you determine whether you can have more than one lease under a single roofline and what the regulations are in your area. 

You have to tick a few boxes in terms of what the council will allow.”

~ Jo Vadillo

Jo pointed out that when it comes to financing your property at the bank, they will only look at your rental return based on it being a fixed tenancy. They won’t take the co-living numbers into consideration. 

For example, on a $650,000 property, you can expect to get about $550 per week in rent, which is what the bank will consider when assessing your ability to pay off the loan. Your loan is based on what you can afford in terms of your financial position and the most stable rental income option.

Just because you can make the property an Airbnb or a co-living space and increase that number to $900 per week, the banks aren’t interested in looking at that.”

~ Jo Vadillo

Jo Vadillo’s Renovation Project In Sydney

On the 17th of December 2020, Jo signed the building contract for her project in Sydney. At the end of 2022, she is still waiting for the tender to be updated. As a result, she’s looking forward to getting stuck in and doing the project instead of just talking about it. 

Jo and Greg are undertaking an elaborate build on the northern beaches of Sydney. She says the sight itself is very tricky, and it is in a flame zone, which has added some extra costs to the build. 

One of the regulations for properties in a flame zone is that you have to put window shutters across all of the windows of the house. Jo’s a bit sad about that because she feels they are not the most attractive addition to a house, but she hopes to be able to make it beautiful nonetheless.  

They will be adding a cantilevered pool in the back garden, which has been approved and involves additional engineering expenses. It is necessary, though, because the property backs onto Middle Harbour, so there is concern about the environmental impact on the water. 

They have also had to deal with Aboriginal heritage overlays and sign-offs, which luckily had no impact on their plans. However, time delays in building are inevitable, so even though the builder’s contract states 10 months, Jo is expecting it to take at least 12.

During that time, she plans to raise some money using Airbnb as a strategy to boost her income to pay for some of the expenses of the build and for furnishing the house once it is complete. 

Airbnb is a powerful strategy for increasing your income that long-term rental can’t achieve.”

~ Bernadette Janson

Jo says that the property has tested the boundaries of her patience. Because she works in the property business, she understands that it takes time, but every now and then, she feels that she needs to agitate someone to get the wheels rolling. 

Conclusion: Co-Living Is A New Trend In Communal Living

Jo’s co-living project is a great cash flow-positive strategy that we believe many renovators and property investors should take advantage of. Not only can you do your bit to help solve the housing crisis, but you can significantly increase your rental income by having at least three separate leases under a single roofline, depending on where your property is located.

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If you want to meet up with a group of savvy renovators. I would say come over and join She Renovates Facebook Group. It’s a completely FREE Facebook group and it is growing at the rate of knots. We hit over a thousand members just recently, and now it seems to have picked up momentum. They are all savvy renovating women and men working their little hearts out to live a better life through renovating.

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Bernadette Janson

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