Managing Multi-Tenancy Properties
Multi-tenancy properties (2–3 separate leases on one title) deliver the highest rental yields but require specialised management:
Our multi-tenancy management fee: 8.90% + GST of total rent collected
Why higher fees for multi-tenancy?
- Multiple tenant relationships to manage (3 separate points of contact)
- More frequent maintenance coordination (shared spaces, individual rooms)
- Complex bills management (splitting utilities across tenants)
- Higher turnover rate per room (shorter average tenancy)
- More frequent advertising and tenant screening
- Compliance monitoring for Victorian rooming house regulations
Yield comparison (typical $750K property): | Configuration | Weekly Rent | Annual Rent | Gross Yield | |---|---|---|---| | Single tenancy | $500/wk | $26,000 | 3.5% | | Dual tenancy (1+1) | $900/wk | $46,800 | 6.2% | | Triple tenancy (1+1+1) | $1,200/wk | $62,400 | 8.3% |
The management fee increase from 4.90% to 8.90% is more than offset by the 50–80% rent increase.
Bills & Utilities for Multi-Tenancy
Managing utilities across multiple tenants is one of the biggest operational challenges. Here's our proven approach:
The standard approach — bills-included rent:
- Set each room's rent to include a utility allowance ($30–$60/week per tenant)
- Landlord pays all utility bills from one account
- Sub-meters ($500–$1,000 each) track individual usage for internal records
- 90% of multi-tenancy properties use this approach
Never install separate official meters:
- Cost: $20,000–$30,000+ per meter
- Creates separate council rate accounts (doubles admin)
- Complicated tenant changeover process
- Not worth the investment for rental properties
House rules for shared utilities:
- Include clear utility expectations in each lease
- Prohibit high-power appliances (mining rigs, industrial equipment)
- Air conditioning usage guidelines in summer
- Heating usage guidelines in winter
- Common area cleaning roster (if applicable)
Our Ongoing Team handles all utility bill management, including:
- Bill payment from landlord's rental account
- Quarterly usage analysis
- Flagging unusual consumption spikes
- Adjusting bills-included rent at lease renewal if costs have changed significantly
Compliance for Multi-Tenancy (Class 1a)
In Victoria, properties with up to 3 separate leases are classified as Class 1a — standard residential. This is the sweet spot for multi-tenancy investors.
Class 1a requirements (3 leases maximum):
- Register with Consumer Affairs Victoria (simple registration, no council permit)
- Gas safety check: $250 (every 24 months)
- Electrical safety check: $600 + GST (every 24 months)
- Smoke alarm inspection: Annual
- All minimum rental standards apply to each tenanted area
Crossing into Class 1b (4+ separate tenancies):
- Requires full council registration
- Disability access ramp installation
- Accessible toilet required
- Fire safety equipment (extinguishers, illuminated exit signs)
- Regular council inspections
- Significantly higher compliance costs ($3,000–$7,000+)
Our strong recommendation: Stay at 3 leases maximum. The jump from Class 1a to Class 1b adds $3,000–$7,000 in compliance costs plus ongoing council oversight. The income difference between 3 and 4 tenants rarely justifies the regulatory burden.
Compliance tracking: Our system monitors all multi-tenancy compliance dates. Each tenanted area is tracked independently for safety checks, ensuring no gaps in coverage.