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Rooming house & co-living finance
Most brokers can fund a rooming house. Almost none can tell you whether it will work before you buy the site.
Class 1B licensing, front setback dispensation, and the Victorian land tax exemption pathway are the three places these projects fail. Priyank has navigated all three on his own builds.
Subject to lender appetite and valuation basis. Victoria focused — the rules that make these projects work are Victorian instruments.
30 minutes with Priyank. No application, and no lender sees anything until you say so.
Why the asset exists
A structural mismatch, not a trend.
Around 26% of Victorians live alone and single households have risen roughly 20% in five years — yet about 74% of dwellings have three or more bedrooms and only 5% have one. Melbourne rental vacancy sits below 2.5%, national rents have risen 42.9% over five years, and more than 55,000 households are on Victoria’s social housing waiting list.
Only 0.05% of Victorian properties are classified as rooming houses.
Then the policy driver. Victoria cut the land tax threshold from $300,000 to $50,000, with steeper marginal rates and trust surcharges compounding on top. That is pushing ordinary investors out of Victorian property and pushing sophisticated ones toward assets whose yield can absorb the holding cost.
Rooming houses are that asset — yields of 10% and above against 3–5% for traditional rentals.
Figures from published industry and government sources. Verify the current land tax position and any exemption pathway with your accountant before acting.
Room-by-room feasibility is tested against SQM Research vacancy data and Suburbtrends supply reporting for the specific suburb before we take the file anywhere.
The mismatch is the market. Single households up roughly 20% in five years; Melbourne vacancy under 2.5%; 55,000+ households on the social housing waiting list.
The lending problem and the yield story are the same picture: one vacancy in eight rooms is a 12% income dip, not 100% — and a valuer who reads it as a house misses the entire right-hand side.
What most people do
Who else is in this market.
Property marketers and developers
Several firms actively market rooming house investment in Victoria. They are property marketers and developers — none of them are finance brokers, and none of them fund what they promote.
Your regular broker
Class 1B construction funding is non-bank and private territory. A broker who has not done one will find that out on your file, at your cost.
Your own bank
Most will not lend against the asset class at all, and the ones that will are pricing an asset they do not understand.
Doing it yourself
Regulation 74, Class 1B licensing and the land tax question are three separate specialist domains. Most projects that fail, fail on one of them rather than on the numbers.
The people generating demand for this asset class cannot finance it. That is the gap.
Before you commit
Agree on what a real answer has to do.
Change what the lender sees
The structure and the security — not just the letterhead on the application.
Look at everything you hold, at once
This should not be structured in isolation from the facilities you already carry.
Tell you the truth before you spend money
Including when the answer is that you should not proceed.
Put its own money behind the answer
Anyone will promise you an outcome. Fewer will refund one.
A broker who cannot do all four is an interest-rate comparison with a phone number.
What we actually are
Not an interest-rate broker. A structuring firm.
The three places these fail
And the questions to ask before you commit.
Class 1B classification
The building classification determines the construction standard, the licensing pathway and, critically, which lenders will look at it. Getting this wrong after you have bought is expensive and sometimes fatal to the project.
Planning and setback
Front setback dispensation under Regulation 74 is a common stopping point on conversions and infill sites. It is a planning question that arrives long before a finance question, and it decides whether the project exists.
The land tax position
With the Victorian threshold at $50,000, holding costs make or break the model. There is an exemption pathway that applies to some rooming house arrangements. Whether yours qualifies is a question for your accountant — and it is the single most valuable thing to establish early.
We arrange credit. We are not planners, building surveyors, lawyers or tax advisers — but we have worked alongside all four on our own projects, and we will tell you which one you need to call first.
The product ladder
Two funding events from one project.
Site acquisition
Entry point
Standard or private pathwaysDepending on timing and the planning position at purchase.
Construction funding
New build, Class 1B
Progressive draw, up to 80% LVRNon-bank and private territory. Higher cost, higher leverage, faster.
Conversion funding
Existing dwelling to Class 1B
Progressive drawThe pathway most investors underestimate.
Completion restructure
Residual stock sitting on construction debt
Takeout to an investment facilityWhere most of the long-term saving actually is.
Refinance of an operating house
Standalone
Repriced against incomeAn operating rooming house is a different credit story to a construction site.
Stages two and four are two funding events from one project. That is a better economic profile for you than a single acquisition, and it is why the takeout should be planned before the build starts, not after.
Clients
Investors who think about property as a business.
“Priyank’s advice to look at an investment as a business was a profound shift in mindset for me. It helped us understand the value of engaging the right professionals, like a buyer’s advocate, as part of the journey.”
Nikunj PatelRegistered nurse · investment strategy“We originally approached Priyank for investment advice, and he helped us structure everything perfectly using a Unit Trust (Corporate Entity) to achieve our Investment Strategy goals.”
Bansal PatelUnit trust structure“Refinancing our home to release equity for a land purchase and then securing a separate construction loan… He structured the three-part loan flawlessly.”
Haytal MakadiaConsultant pharmacist · equity release, land and constructionEvery quote is verbatim from a published Google review. Individual outcomes depend on the client’s circumstances, security position and lender criteria at the time.
Who it’s for
This is not for everyone. Deliberately.
We’re a fit if
- New Class 1B construction in Victoria
- Conversion of existing dwellings to rooming house or co-living use
- Site acquisition where the planning pathway is understood
- Completion restructures and takeouts from construction debt
- Refinance of an operating, compliant rooming house
- Investors who want the feasibility tested before they buy
We’re not, and we’ll tell you in the first call
- Projects outside Victoria — the licensing and land tax rules do not travel
- Sites where the planning pathway has not been investigated
- Non-compliant or unlicensed existing operations
- Investors looking for a passive residential yield play
Turning away the wrong deal is how we stay fast on the right ones.
Straight answers
Fair questions.
Can you get finance for a rooming house in Victoria?
Yes. Construction and conversion funding for Class 1B is largely non-bank and private territory rather than major bank, and we fund to 80% LVR subject to lender appetite and the valuation basis applied. Expect higher rates than a standard residential facility and a tighter lender panel.
What is a Class 1B building?
A building classification under the National Construction Code covering boarding houses, guest houses and hostels of a certain size. The classification determines construction standards, fire and safety requirements, the licensing pathway, and which lenders will consider the asset.
Do rooming houses actually yield more?
Published industry figures put rooming house yields above 10% against 3–5% for traditional rentals, with quality Melbourne stock reported earning $150,000 a year and above. Those are gross figures before management, compliance, vacancy and holding costs, which are materially higher than a standard rental. The model works on net, not gross.
Is there a land tax exemption for rooming houses in Victoria?
An exemption pathway exists for certain rooming house arrangements under Victorian land tax legislation. With the threshold cut from $300,000 to $50,000, whether you qualify can decide the project’s viability. Victoria has legislated actively in this area, so confirm the current position with your accountant before you commit — we will tell you what to ask them.
Can I convert an existing house into a rooming house?
Often, subject to planning, building classification and licensing. Conversion is the pathway most investors underestimate: the finance is the straightforward part, and the planning and classification work is where projects stall.
Why is this Victoria only?
Because Regulation 74, Class 1B licensing through the Victorian system, and the state land tax exemption are Victorian instruments. Our experience here comes from building these ourselves in Victoria. We would rather say that plainly than pretend it travels.
Next step
Tell us about the site before you buy it.
If the planning or classification pathway does not work, you should hear that from us before you exchange.
30 minutes with Priyank. No application, and no lender sees anything until you say so. You’ll know whether we can fund it — and either way, you leave with a plan.
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