The Harmony Group
« All insights

Are high co-living yield claims realistic? How to test the income before you commit

· Yannick Ieko

Answering: I’ve seen co-living yield claims over 11%. How do I tell if the rental income is realistic before I commit six figures?

Estimated reading time: 14 min read

A high co-living yield claim is realistic only if you can trace it to separate room rents, a building designed and approved for that many residents, and management that keeps the rooms let. If any one of those three is missing, treat the number as marketing and walk away. At The Harmony Group, the gross yield on the base project cost of a recent nine-bed is 11.36%, based on recent acquisitions, and each part of that figure can be taken apart and checked.

Doubting a double-digit number is the right reflex. ASIC’s Moneysmart says it plainly: generally, the higher the projected return, the higher the risk. The questions below are the ones to put to any operator, this one included. If an operator cannot answer them clearly, the claim has failed the test, whatever the brochure says.

Key Insights

  • A co-living yield is built room by room. Ask to see the rent per room, the room count and the cost it was divided by.
  • Published yields are gross. Your own net result depends on your loan structure, deposit and tax position.
  • Occupancy, certification before commitment and the operator’s fee model decide whether a gross figure holds up.
  • Nine-bed co-living is built for investors with at least $600,000 in cash, usable equity or both.

Table of Contents

Where does a co-living income figure come from?

From arithmetic you can repeat at your own kitchen table. A standard investment property earns one rent from one household. A purpose-built co-living property earns a rent from each room, because each resident has their own lease. The income figure is the room rent, multiplied by the number of rooms, multiplied by 52 weeks.

Here is how that looks on Harmony’s nine-bed. Average figures based on most recent projects: around $380 a room a week, which is about $3,442 a week across nine rooms and $179,010 a year in gross rental income, on a base project cost of $1,574,000 ($1,650,250 including additional considerations). The $380 is rounded. The actual average is $382.50 a room, and $382.50 x 9 rooms x 52 weeks = $179,010.

The same figure set carries a comparison: a standard investment property at the same $1.5 million price rents for around $865 a week, or $45,000 a year, a 3% gross yield. Average figures based on most recent projects. The gap between the two comes from the number of leases on the title. The building is one dwelling of nine rooms, nine bathrooms, single storey, so the extra income has a physical cause you can walk through.

Moneysmart’s test for any investment is whether you can explain how it makes money and where the returns come from. With co-living you should be able to say it back in one sentence: nine rents, one title, one specialist manager. If an operator’s explanation needs more adjectives than that, ask for the room count and the rent per room before anything else.

  • Ask for the rent per room, the number of rooms and the weekly total, in that order.
  • Multiply them yourself and check the annual figure matches the brochure.
  • Ask whether the rent per room is a recent average or a single best-case room.

Is the yield gross or net, and what was it divided by?

Every published co-living yield you will see is a gross figure: rent before costs, divided by a cost. Two things change the answer, so ask about both.

The first is the denominator. Harmony’s 11.36%, based on recent acquisitions, is calculated on the $1,574,000 base project cost. The project cost including additional considerations is $1,650,250, and that is a different number. Average figures based on most recent projects. A genuine operator will tell you which cost they divided by without being pushed. One who changes the denominator between the brochure and the contract has told you something about how they handle figures.

The second is everything that sits between gross rent and what you keep. Moneysmart lists the ongoing costs of owning an investment property: council and water rates, building and landlord insurance, land tax, property management fees, repairs and maintenance. On top of those sit your loan repayments. A building run as a rooming house in Victoria adds compliance work: Consumer Affairs Victoria requires gas and electrical safety checks every two years, and since 13 October 2026 operators have had to keep records showing the property meets the rooming house minimum standards. None of that appears in a gross yield.

So the net position depends on your loan structure, deposit and tax position. That is a sentence for your accountant and your mortgage broker, with your own numbers in front of them. Be wary of any operator who offers you a net cash-flow figure or a timeframe before they know how you would fund the purchase.

  • Ask: is this gross or net?
  • Ask: which cost is the yield calculated on, and does that cost include everything I will pay?
  • Take the gross figures to your accountant and broker and let them build the net picture.

What does the delivered record say?

A figure from recent acquisitions tells you what the latest buildings are set up to earn. A historical figure tells you what a body of delivered buildings has actually earned. You want both, and you want them kept apart.

For Harmony, 10.8% is the historical average gross yield across The Harmony Group’s delivered projects. It is a separate measurement from the 11.36%, based on recent acquisitions, and the two should never be blended into one headline. Neither is a forecast for your building. Past results describe what happened; rents, costs and occupancy can all move.

When another operator quotes a yield, ask the same two questions. Is this what finished buildings collected, or what a spreadsheet expects a new one to collect? And over what period, across how many buildings? An operator who cannot separate the two has not yet given you a record. The longer read on how co-living income has historically compared with standard rentals is how much rental income co-living can realistically generate.

What keeps nine rooms let?

A gross yield assumes the rooms are occupied. Moneysmart names vacancy as a core risk of any investment property: there may be times you cover costs yourself because there is no tenant. In co-living that risk is spread across nine leases, and it is managed room by room.

Ask who manages the building and what their record is. As at October 2026, our property management partners manage 477 rooms with only 6 vacant at any time, a 1.26% vacancy rate, and maintain 98%+ occupancy. That is a specialist manager’s record across a portfolio of rooms. It is not a promise about any single building in any single month.

Rent level matters as much as occupancy. On three years of the team’s own tenant data, Harmony’s nine-bed rooms rent for $100 or more per room per week above the co-living market average. That is a historical comparison, not a promise about future rents.

You can test the market side independently. SQM Research publishes rental vacancy rates by city and region, built from online listings that have been advertised for three weeks or more. Look at the vacancy trend where the building sits, then ask the operator how their occupancy compares.

  • Ask for occupancy across the manager’s whole portfolio, with the room count it was measured on.
  • Ask how quickly an empty room is re-let and who pays for advertising.
  • Check the local vacancy rate yourself before you accept a rent assumption.

Was the building designed and approved for nine residents?

This question separates structural income from the three-room appraisal trick: a rent appraisal that counts more unrelated residents than the house was certified to hold. The income on paper can look similar. The legal and insurance position is very different.

The Australian Building Codes Board describes a Class 1b building under the National Construction Code as a small shared residential building with a floor area under 300 square metres that ordinarily has fewer than 12 people living in it. In Victoria, anyone operating a rooming house must be licensed under the Rooming House Operators Act 2016, a scheme that began on 26 April 2017, and must also register the rooming house with the local council.

Every Harmony property is purpose-built co-living, and its Class 1b certification is confirmed before you commit. Ask any operator for the certification and approvals that apply to the building you would own, and ask when they are confirmed. The difference between designing for nine residents and fitting nine residents into a house is set out in purpose-built co-living versus HMO conversions, and the risk side in how 1B certification changes the risk of a co-living investment.

Certification is a building and safety matter. It is not a tax ruling, so keep it out of any conversation about deductions.

How was the site chosen, and how often does the operator say no?

Room rents depend on where the rooms are. A credible income claim comes with a site-selection method you can ask about in detail.

Harmony uses the 118-point method: 42 points of market analysis, 38 of area selection and 38 of property specification. Every property comes with an SQM Research market report carrying verified rental data. The method is set out in full on The Harmony Method.

The other half of a method is refusal. The team rejects 85% of the opportunities it evaluates, so only about 15% go ahead. Ask any operator what share of sites they decline. A firm that says yes to everything has no reason to be selective about the rent assumptions either.

Who pays the operator?

A yield claim is easier to trust when you know whether the person making it is paid more for one outcome than another. Moneysmart warns that property developers, accountants, lawyers and mortgage brokers might recommend each other’s services.

Clients pay Harmony $0. Harmony’s fee comes from the builder at settlement, and every builder on the panel pays the same rate, which removes any reason to favour one of them. Ask every operator the same question, and ask whether any land, finance or build party pays them a commission. The questions worth asking an operator in full are collected in how to vet a high-yield property investment specialist.

Who is this not for?

A realistic income claim also has to fit the person buying it. With Harmony, co-living investment requires a minimum of $600,000 in cash, usable equity, or a combination of both. If you do not have that, the nine-bed is not your next step, however the income looks.

Moneysmart’s advice for any investment property also applies: do a budget comparing expected income with outgoings, and do not rely on rental income alone to cover the mortgage. If the purchase only works when every room is let every week, it does not work yet. If you have the capital and the numbers stand up with your adviser, the next step is to learn how the building is designed and run.

Frequently asked questions about co-living income claims

Q: Is an 11% gross yield on co-living realistic?

It can be, when it is built from separate room rents on a building designed and certified for that use, with specialist management. For Harmony’s nine-bed, 11.36%, based on recent acquisitions, is the gross yield on the $1,574,000 base project cost. It is a gross figure, not net cash flow and not a forecast for any building. Ask any operator for the same three things: the rent per room, the room count and the cost the yield was divided by.

Q: Why is co-living income higher than a normal rental at the same price?

Because a co-living building carries nine leases instead of one. In Harmony’s comparison, a standard investment property at the same $1.5 million price rents for around $865 a week. Nine rooms at around $380 a room come to about $3,442 a week. Average figures based on most recent projects. The difference comes from the number of leases on one title, which is why certification and management matter as much as the rent.

Q: How do I work out my net return?

Start from the gross rent, then take off rates, insurance, land tax, management, maintenance and your loan costs. The net position depends on your loan structure, deposit and tax position, so build it with your accountant and mortgage broker, not with the operator selling the building. An honest operator will give you gross figures with their labels and leave the net calculation to the people who know your finances.

Q: What is the first step if I want to check Harmony’s figures for myself?

The free co-living education program. It explains how the numbers are built, how sites and builders are chosen, and how the building is run. Finish any 9 modules and a booking link opens for a one on one with one of our directors.

Check the numbers before you talk to anyone

The free co-living education program walks through where nine-bed income comes from, what sits between gross and net, and how a purpose-built nine-bed is designed, certified and managed. Its core takes about 45 minutes. We build in Melbourne. Our investors come from every state. If co-living isn’t suitable for you, we’ll tell you why.

Citations

  • Check before you invest, ASIC Moneysmart. Confirms the test of explaining how an investment makes money and where returns come from, and that higher projected returns generally carry higher risk.
  • Buying an investment property, ASIC Moneysmart. Lists the ongoing costs of owning an investment property and the vacancy risk, and advises against relying on rental income to cover the mortgage.
  • Building classifications, Australian Building Codes Board. Defines a Class 1b building by floor area under 300 square metres and ordinarily fewer than 12 residents.
  • Rooming house operators licensing scheme, Consumer Affairs Victoria. Confirms operator licensing under the Rooming House Operators Act 2016 from 26 April 2017, plus local council registration.
  • Rooming house minimum standards, Consumer Affairs Victoria. Confirms two-yearly gas and electrical safety checks and record-keeping against the minimum standards since 13 October 2026.
  • Vacancy rates, SQM Research. Publishes rental vacancy rates by city and region from online listings advertised for three weeks or more.

General information only. The Harmony Group provides general information about property and co-living investment, not personal financial, tax or legal advice, and does not hold an Australian Financial Services Licence (AFSL). It does not account for your objectives, financial situation or needs, so consider its appropriateness and seek advice from a licensed financial adviser, mortgage broker, accountant or the ATO before acting. Past performance is not a guide to future results and historical figures may not be repeated. The 2027 negative gearing reform was enacted on 26 June 2026 and applies from 1 July 2027. The definition of a new residential dwelling is still being settled after Treasury’s consultation, so whether a nine-bed is an eligible new build remains unsettled. Other tax or regulatory measures described are subject to change.