Australia's Rental Crisis
We are experiencing an unprecedented rental crisis in Australia. There are insufficient properties available for rent, meaning that it’s not unusual for 40+ people to show up to an open for inspection. Rents are rising. Regional areas which were once an affordable option are now as expensive as the cities.
Coastal and country tourism towns are being hit hard; with many hospitality businesses finding it impossible to find staff due to accommodation shortages. Yet, according to PropertyUpdate.com.au
, there are 13.5 million spare bedrooms in 10 million homes across Australia. The rental value of each of these rooms is anywhere between $10,000 and $12,000 annually which could reduce mortgage stress for many homeowners. This existing housing stock, if given the right systems, could be used to solve a number of housing issues.
There are 13.5 million spare bedrooms in 10 million homes across Australia. The rental value of each of these rooms is anywhere between $10,000 and $12,000 annually which could reduce mortgage stress for many homeowners.
Living within your means
Living within your means is the secret to success with money. It was certainly a message my parents lived by. Every room in our family home was occupied, we bought furniture we could afford and as my parents income grew; we grew with it.
There is no dignity quite so impressive, and no one independence quite so important, as living within your means. Calvin Coolidge
My husband and I lived the same philosophy in our 30 years together. We’ve tweaked it here and there depending on our family and lifestyle needs but whatever we had, we used well.
Our first home
Our family home in Newport, Melbourne was everything a growing family needed - a big corner block, three bedrooms and a large backyard.
Our children shared a bedroom until they were 9 and 11. I worked from home, so the third bedroom was my office. Every space in our house was put to good use and nothing was wasted.
As our kids entered their late teens, and my husband and I were both running businesses from home, we needed more space at least for a few more years.
Instead of buying a larger home, we decided to rent instead.
We became what’s become known as ‘Rentvestors
’. We rented where we wanted to live and rented out our home.
The nest loses its first chick
A year after we moved in, our eldest child left home. As we were now in a much better financial position, we decided not to downsize. The living spaces were ideal, we loved the location, and we had a great relationship with the owners. I also relished having a spare bedroom for when my interstate family and friends came to visit.
I set the bedroom up nicely - a brand new bed, lovely linen and loads of pillows and cushions.
For the following year, as I walked past the bedroom, I’d reminisce about my son. A few months later, I realised that no-one had slept in the room since he’d left.
The visitors, I had dreamed about hadn’t made plans to come and stayed. I started questioning why I was paying rent for a bedroom that was never being used.
Suddenly, it dawned on me. I had stepped into the very trap I’d vowed never to fall into. I was wasting space in my home that was costing me around $200 a week!
Our Airbnb journey
So I did what a lot of people do, I listed it on Airbnb
. I figured we may as well get some money for the room.
We were Airbnb hosts for a year. It was a wonderful experience and brought a lot of joy into our home. We loved meeting new people from all parts of the world.
What I didn’t like however, was the four hours it took every time we had a booking to get the entire house hotel ready for a $50 a night guest. So this adventure lasted just a year.
An organic surprise
My daughter had a traveling friend who needed a place to stay. We eagerly invited him to stay for a few months. He was strapped for cash, so we offered him food and board in return for help around the house.
He loved the opportunity. He cleaned up after dinner, washed and folded our laundry, sorted out spaces in our home and started a vegetable garden. These were tasks that he loved to do and I didn’t.
For four years we lived this life with a new person each year.. It felt great to use the space again. We had companionship and it also helped him out. A genuine win-win all round.
Eventually my friends began to ask me where they could find someone for a similar arrangement. My entrepreneurial instincts kicked in and The Room Xchange
The Room Xchange
Five years ago I founded The Room Xchange, Australia’s first verified house sharing platform.
The Room Xchange platform offers homeowners a new option other than a temporary flatmate or lodger who’s just looking for a room. It offers the opportunity to find someone you can trust to share your home with..
All users of the platform have a Digital iD by Australia Post ensuring everyone - households and housemates are who they say they are. User profiles make it easy to select an ideal housemate - based on personality, values and lifestyle - so you feel like you’re coming home to a friend.
You can choose the traditional rental for money option or you can choose a rental offset - where you trade help around the house for some or all of the rent.
My experience over the previous four years and my prior knowledge as both a landlord and a tenant have now been harnessed to help everyone embrace this opportunity.
The value of your spare bedroom
Those 13.5 million spare bedrooms in Australia have some value to the homeowner, the potential occupant and to society as a whole. The rent of that room could be worth $10k+ annually.
An additional $10, 000 repaid on a typical $500, 000 mortgage could reduce the principal significantly over time. That $10, 000 could go towards saving for a deposit on a house, topping up your superannuation or put towards your next holiday. But the room could also provide you with something just as valuable - time. If you offset the full $10, 000 a year, that’s the equivalent of around 300 hours of household help.
What’s your spare bedroom worth to you?
When you next walk past your spare bedroom, have a think about what it could be doing for you. Whether you choose rent or a rent offset it’s going to give you something. You’re paying for it anyway, whether it’s a mortgage or rent, so you may as well get something out of it. Besides, I’m sure your occasional guest could find a cozy Airbnb somewhere nearby.
“With interest rates rising, the cost of living increasing and housing insecurity at its peak, how can you better utilise your spare bedroom?”
You can find out more about The Room Xchange here: www.theroomxchange.com.