Why Rooming Houses Are Breaking the Traditional Investment Property Model
For decades, Australian property investors have followed a familiar formula: buy a residential investment property, negatively gear it, and wait patiently for long-term capital growth.
The idea is simple — accept annual losses on the property (offsetting them against your taxable income), and bank on the value of the property rising over time.
But in today’s market, more and more investors are asking the question: why are we still settling for investments that lose money year after year?
The Melbourne Market Has Shifted
For a long time, Melbourne was seen as a “safe bet” when it came to capital growth. But recent years have challenged that perception. Prices have stalled or dropped in some areas, rental yields remain low, and holding costs (interest, maintenance, insurance, council rates) are only rising.
In many cases, traditional investment properties in Melbourne are returning just 3–4% rental yield — and that’s before costs.
Add in rising interest rates and ongoing uncertainty, and suddenly, relying on long-term capital appreciation looks riskier than ever.
Melbourne property has had a challenging few years. Source: CoreLogic
Rooming Houses Flip the Script
Rooming house developments offer a smarter alternative.
By creating self-contained studios within a single dwelling, a rooming house allows you to generate multiple rental incomes from one property — boosting your cashflow from day one.
At Artizen Homes, every rooming house project we deliver is designed to return 8% or more in annual rental yield — more than double the average return from a typical residential investment.
But it’s not just about the yield. Rooming houses also:
Diversify your rental income across multiple tenants
Reduce vacancy risk
Operate under a single title (no strata headaches)
Meet a growing social need for affordable accommodation
This is positive cashflow with real purpose.
A Specialist Asset Needs a Specialist Builder
Rooming houses aren’t like regular homes — they come with strict planning, building code, and compliance requirements. Success in this space depends on understanding the finer details and delivering smart, efficient design that meets both regulatory and tenant needs.
We’ve been building rooming houses across Melbourne since 2016. Over the years, we’ve refined our process and design standards to deliver projects that:
Are cost-efficient to construct
Require low maintenance over time
Feature modern amenities tenants actually want
Lease out quickly and retain long-term tenants
Our builds are often home to working professionals, graduates, key workers, and new migrants — a growing tenant demographic that is being priced out of traditional housing options.
Doing Good While Doing Well
The rental crisis in Australia isn’t going away. The supply of affordable accommodation continues to fall short, and many renters are struggling to find suitable housing close to work, education, and transport.
Rooming houses provide a meaningful solution.
With our fast-track build process, we’re able to deliver compliant, high-performing rooming houses in under 6–8 months — helping investors bring more stock to market quickly, while meeting real community needs.
It’s an investment that not only performs financially, but makes a positive impact.
Final Thoughts: It’s Time for a Smarter Property Strategy
If you're tired of properties that cost you money each year and are looking for a better-performing, future-proof asset, rooming houses are worth a serious look.
At Artizen Homes, we’re not just builders — we’re your rooming house investment partner from concept to completion. We handle everything in-house: site assessment, design, council approvals, building permit, construction, and handover — so you can focus on growing your portfolio with confidence.
📞 Want to learn more? Book a free strategy session with our team today.
Let’s see how you can add a rooming house to your investment property portfolio.