With capital city properties more expensive than ever, affordability for buyers and renters is sky-high. Ian Ugarte believes multiroom homes and micro-apartments may be the solution to Australia’s affordability crisis, boosting investors’ bottom lines along the way. Sarah Megginson reports
Delivering affordable, comfortable homes to renters across Australia was not Ian Ugarte’s initial goal. But as a successful property developer, it was a growing desire to give back in a meaningful way that drove him to seek out a new way to invest.
“As a property developer, I was very successful. But about four years ago I woke up one day with plenty of money in the bank but no resolve or purpose. I thought money would make me happy, but it didn’t. I had to work out what to do to fix the hole in my heart,” he shares.
“I started looking at what was needed and required in our communities, and I came up with the idea to create better outcomes for people who couldn’t afford to live on a daily basis. That’s how we came up with Small is The New Big.”
The business began by creating multiroom, purpose-built ‘boarding’ and ‘rooming’ homes across the country. The process involved converting and building new houses into homes with six to eight self-contained units, each with a kitchenette, or at least a wet bar for food prep, and one communal area. Some projects included individual en suites, and others involved shared bathrooms.
Each high-quality project rented quickly upon completion, which Ugarte didn’t find surprising. What did surprise him, however, was the type of tenant the units attracted.
“We expected younger, single tenants, and we got a lot of them. But we also had women in their 50s knocking on our door. We started to do some research and discovered that these women are experiencing white-collar homelessness. They were married at 20, started their own career, then took time out of the workforce to raise a family. Their kids are now grown and they have split up with their partner or their husband has passed away, and they often end up with very little financially and no super to sustain them after being out of the workforce for many years. They’re trying to reclaim their independence, but it’s very expensive to do so.”
Describing these women as “the fastest-growing demographic in Australia”, Ugarte says he’s helped investors build several micro-apartment homes catering to this market.
“It’s affordable for a pensioner living on $400 a week to rent this type of unit, and for investors the rents on average are $800 plus per week after costs, so it’s a real win-win,” Ugarte says.
With a big goal to transform the affordability crisis one multiroom project at a time, Ugarte’s service includes helping investors to source the original property/land, then overseeing the transformation into a rooming house and managing the rental afterwards.
“We don’t sell property, but we have team members to help out – designers, agents, architects, basically anyone you require to get to the next level,” he says.
“Our vision is to inspire our community to complete one million self-contained accommodation units by December 2027, to make a real impact on the housing affordability crisis in Australia.”
Ian Ugarte, founder of Small Is The New Big, aims to inspire investors to build multiroom, self-contained houses that deliver a high yield to investors and affordable homes to residents.
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