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  1. #11
    Join Date
    Jul 2010
    Location
    Auckland City, why invest else where?
    Posts
    987

    Default

    Quote Originally Posted by Westie82 View Post
    We've had a good look around the forum - it's fantastic reading... but looking for some help or feedback from the 'experts' on suggested steps for us.

    About us, as a couple - we're on a combined income of around $140k annually. Give or take $5k. We're in our 20's (29 and 26) and own a home, probably worth around $550/$570k, 6 rooms. There are 4 rooms rented out to flatties/boarders - total income of around $500 ($26k - no tax/boarders). Our mortgage is $230k, giving us around $320 in equity.


    Now, it was all simple once - the plan, buy a 2nd house, rent it out for a year or two, shift in to it, rent out the current larger place. The reason - ideally a little closer to town than where we are (western heights), and to look after our future (investment property).

    The plan, let's look towards Te Atatu *****ula. Buy a 3/4 room house, aim for around $450k- full mortgage, rent it out.

    That's where it got messy. Over thinking it maybe, maybe not thinking it at all... but now we are in a little pickle and uncertain what's best.. our options:
    - Do we sell our house and buy a large house in Te Atatu *****ular and keep up the boarders... (low capital growth, wasted $$$ in house)
    - Do we buy a 3/4 room house in Te Atatu *****ular (looking around $450k - may get $450 rental return)
    - Do we buy a unit/apartment in a Eastern Suburb (Equity growth/good rental)
    - And after the forum, do we look at a house in Pt Chev or Avondale (I like the Avondale idea).

    Does anyone have any feedback? Is there a rule - eg: $300k house ideally generates a $300 return in rent etc etc. Any guidance, advice or direction here would be appreicated? Any thoughts on Pt Chev/Avondale/Te Atatu *****ular? Or a unit in a Eastern Suburb?

    Sorry bout the 20 questions...

    Go to the next APIA Seminar where Ron Hoy Fong is speaking, and get a free consultation.

    Ron will probably point you in a better direction.

    Alternatively call him on 021 888 298
    Novice Investor Turning Pro
    If you would like a Super Property Coach to super charge your property investment, call my coach Ron Hoy Fong 021 888 298 today!

  2. #12
    Join Date
    Aug 2010
    Posts
    214

    Default

    Quote Originally Posted by Maccachic View Post
    Is this situation actually exempt from tax?
    Well Is it

  3. #13
    Join Date
    May 2004
    Location
    Christchurch
    Posts
    451

    Default

    I would check out the tax situation if I was you. I think you can only have 1 or 2 boarders before being taxed. Also I don't think you can claim any expenses if you don't declare the income so you may be better off declaring the income and claiming the expenses even if there is only 1 boarder. (But I'm not a tax expert!).

  4. #14
    Join Date
    Dec 2004
    Posts
    247

    Default

    dont forget - land portion is where the real value lies.
    Not much you get of that with an apartment ...

  5. #15
    Join Date
    Sep 2011
    Location
    Dunedin
    Posts
    851

    Default

    Quote Originally Posted by PatMat View Post
    Anyting is exempt from tax until you tell IRD
    after 3 audits i say tell them nothin

  6. #16
    Join Date
    Aug 2010
    Posts
    214

    Default

    Quote Originally Posted by jimO View Post
    after 3 audits i say tell them nothin
    Did you had a feeling they would come knocking? How do they conduct audits - random or otherwise?

  7. #17

    Default

    I dont think I need to declare tax - I have 4 boarders each paying or $155 including food. Its a primary house... with rooms rented out. Below the limit according to my basic research.

    Thanks for the feedback those guys, it's a good reality check... based on this, we've crossed out the apartment option which is a start. I'm a little confused by the company set up but will be need to get some accounting feedback as we get closer. I think we're going to stay looking at peninsular vs anywere else at this stage. Looking at a house today, $450k with rental income of $460 so it's a start.

    Can't post links... but the link said:

    The standard-cost method uses an average price for basics such as the cost of food, heating, power and transport. The amount is an average across the country and is inflation-adjusted annually. If your income from boarders is less than the standard cost allowed, you will not have to file a tax return, keep records of related expenditure, or pay tax.
    The current year’s rates (year ended 31 March 2012) will be adjusted for inflation after 1 April 2012.
    For the year ended 31 March 2011

    If you have... then the standard cost is...
    one or two boarders $243 a week for each boarder.
    three or four boarders $243 each for the first two boarders, and
    $198 for each subsequent boarder

  8. #18
    Join Date
    Sep 2011
    Location
    Dunedin
    Posts
    851

    Default

    Quote Originally Posted by JABlog View Post
    Did you had a feeling they would come knocking? How do they conduct audits - random or otherwise?
    they were after my accountant at the time i had a gst audit then within months a full tax audit (which found i had overpaid by $1200, they said because it was our mistake they didnt have to repay it but they did) then the next year another full audit, the tax inspector said that it was a random pick by computer but i doubt it my accountant had several of his clients audited and he was as straight as you could get, my present accountant isnt


 

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