The Simple Math Behind Higher Returns
Reading Time: 5-6 minutes
The difference isn’t luck or speculation. It’s simple math: renting per room instead of per property doubles your income on the same asset.
The Fundamental Difference
Traditional residential investment rents to one household. Co-living rents to multiple individuals.
That single change transforms returns.
A 4-bedroom house in a Melbourne growth corridor rents for ~$600/week as a whole house.
The same property, purpose-built for co-living (ensuites + kitchenettes), rents for $375–400/week per room.
The math:
- Traditional: $600/week = $31,200/year
- Co-living (4 rooms): $1,500–1,600/week = $78,000–$83,200/year
On a $900,000 property:
- Traditional gross yield: ~3.5%
- Co-living gross yield: 8.7–9.2% → 10–12% when optimised (5–6 rooms, premium locations, specialist management)
The Five Factors That Create 10–12% Yields
- Per-Room Rental Premium Tenants pay $375–400/week (all bills & furniture included) for convenience and flexibility — FIFO workers, nurses on placement, young professionals, corporate relocations. They accept the premium because they avoid whole-house responsibility.
- Near-Zero Vacancy Specialist co-living managers maintain waitlists and achieve same-day/next-day turnovers. → Average vacancy <1.5% (vs 6–7% traditional). Our partners: 477 rooms managed, typically only 6 vacant = 1.26% vacancy rate.
- Purpose-Built Configuration Private ensuite + kitchenette per room removes friction (no bathroom queues, no shared cooking conflicts). Tenants happily pay $375–400 instead of $300–325 for a basic share-house room.
- Professional Tenant Profile Employed adults (no students, no pets, no kids) = stable income, low wear & tear, average 14-month stays, and premium rents.
- Rigorous Location Selection Only suburbs with diverse employment, good transport, low co-living supply, and supportive councils deliver sustainable 10–12%. Poor location = 7–8% yields and higher vacancy.
Real-World Examples (2025 Data)
Melbourne (4-bed)
Purchase: $900K | Rent: $385/room × 4 = $1,540/week | Gross yield: 8.9% → 10–11% with 5–6 beds & established waitlists
Perth FIFO-focused (5-bed)
Purchase: $950K | Rent: $395/room × 5 = $1,975/week | Gross yield: 10.8%
Adelaide growth corridor (5-bed)
Purchase: $850K | Rent: $370/room × 5 = $1,850/week | Gross yield: 11.3%
Gross vs Net – The Real Cash-Flow Picture
Typical annual expenses on a $900K co-living property (~$16–18K):
- Management (10%): $8,000
- Maintenance (5%): $4,000
- Insurance + rates: ~$4,500
Net operating income: ~$62–65K
After interest (80% LVR @ 6.5%): +$15–20K positive cash flow from day one
Traditional equivalent: –$20–25K negative
The Risks That Can Drop Yields to 7–8%
- Wrong location / oversupply
- Generic property management
- Shared bathrooms (no premium rents)
- No 1B certification → fines up to $166,900 per infringement in Queensland + potential jail time¹
That’s why systematic selection and specialist partners matter.
Why These Yields Are Sustainable
Demand is structural: housing shortage + 2.4 million more Australians needing homes in the next decade + growing FIFO/regional workforce. Barriers (1B certification, purpose-built design, specialist management) keep quality supply limited.
Bottom Line
10–12% gross yields are achievable and proven across 200+ delivered projects (average delivered: 10.8%).
The difference between 7% and 11% on a $900K property is ~$36,000 extra cash flow every year.
Want to see the actual rental listings, waitlist data, and current opportunities delivering these numbers?
[Book Free Strategy Session]
Or download: “Co-Living vs Traditional Investment – The Complete Yield Comparison”
Additional FAQs
FAQ 1: Are 10–12% yields gross or net?
Gross. Net yields after typical expenses and management are 6.5–8%, still 2–3× traditional property and usually cash-flow positive from day one.
FAQ 2: Why do some co-living investments only achieve 7–8%?
Usually poor location, generic management, shared bathrooms, or oversupply. Proper 1B-certified, purpose-built properties in vetted suburbs consistently hit 10–12%.
FAQ 3: How quickly are rooms re-tenanted?
With specialist management: 24–48 hours on average. Many properties have 20–50+ people on waitlists even when full.
FAQ 4: Can yields drop if the market changes?
Yes — oversupply or economic shifts can compress rents. That’s why we only recommend locations with diverse employment and limited pipeline supply.
FAQ 5: Is co-living more expensive to insure or maintain?
Insurance is standard landlord cover. Maintenance is similar or lower per occupant because tenants are employed adults (no pets/kids) and wear is spread across more rent-paying residents.
Citations & Sources
- Queensland Residential Tenancies Authority & Planning Act — maximum penalty for illegal operation of a residential service (including uncertified rooming/co-living): $166,900 per offence (as of 2025).
- SQM Research vacancy and rental data (2025).
- Harmony Group internal performance data across 200+ delivered projects (average gross yield 10.8%).
- Australian Bureau of Statistics — population and housing demand forecasts.
- CoreLogic & Domain rental listings (November 2025).
