Oh right! I was trying to read into it much more than that...7% interest!!! Scary thought to get used to. Yes I guess even at $330 per week the rent more than covers interest...it's just insurance ($80pm) rates (150pm) management fees (10%) and maintenance (endless) that are the killer.
Announcement
Collapse
No announcement yet.
A pickle of a situation, how to make the best of it?
Collapse
X
-
Based on $260K value what is your LVR ?
The cars you borrowed to buy.
Am assuming this wasn't added to the rental's mortgage ?Last edited by speights boy; 03-03-2015, 07:36 PM.
Comment
-
Would be an 82% loan? Haha yes cars were added to rentals mortgage (82% includes the car loans) I know that's naughty but our other house at the time only had 10% equity so couldn't borrow against that...and the other option was leasing (hubby got a substantial car allowance at the time to lease a car, but we thought it made more sense to buy one and pay it off at 6% rather than lease)...the reason we wouldn't come out with much after selling and paying agents fees is Im factoring in paying off some other debt of we sell (interest fee student debt, so not a biggie to not pay it off) and a small parental loan.
Comment
-
Hmmm, sorry to say nicsa, but you are getting deeper in it every post. As your situation becomes a little clearer, 10k on a holiday seems a bit excessive.
Comment
-
Plus you wanted to take on more debt to buy next door ??
Perhaps it would be worthwhile taking your whole financial position to a budget adviser, and see if some 'hard facts' need to be faced.
Might be time to reduce stress by reducing debt.
Be aware if you have your mortgage for your rental with the same bank as your own home, they can use any proceeds left over from the sale to reduce other debt you have with them.
Comment
-
If we get the place rented even at 330 we will get our debt paid down pretty quick as I started full time work a month ago and hubby just had a big pay rise so not too concerned about the personal debt situation...just hard to make serious chunks in it when we're paying 350 a week holding costs for Dunedin house with no income for it coming in...the other thing to consider is I am an intern, once I am registered in December my income will double at an absolute minimum (if I take a very underpaid job--which I hopefully won't have to)...so as I say the personal debt situation is a temporary blip as a result of finishing studying, moving house, starting work, doing renovations..we've known for a while we had much more money coming in so havent been too concerned...just really want a holiday and less stress is main thing on my mind, but still be well prepared for future...can I have my cake and eat it too?
Comment
-
Comment
-
-
-
Update: agent had second open home today and no one turned up. I put an advert up for rent on Dunedin Houses to rent Facebook page for $330 per week and within two hours have had eight people wanting to see through. Have also had a private landlord contact me saying she is starting her own company doing letting (advertising, showing people through, reference checking) and any other requirements on an as needed basis...I need to choose someone fast to show all these people through. Should I use a letting agent and try manage it myself from a distance or pick a new property manager? A couple of people have also enquired about rent to buy, has anyone out there tried this?
Thanks so much for all the advice so far it's been so helpful! Last thing; as we are obviously going to lose money on renting it for $330 per week, should I do something like set up a company or something to claim tax back? (Hubby on highest tax rate, I pay student loan payments if I earn over threshold, who is best to set up company under/best tax structure? Yes I will talk to a property accountant lol)
Comment
-
Are you including the car loan or principal repayments in the calculation of rent v expenses? If so, that is not a true picture. Are you claiming everything possible?
That can make a significant difference to outgoings. The IRD booklet Rental Income is comprehensive and don't forget chattels depreciation.
Structure - suggest get hold of Tax Structures 101 by Matthew Gilligan. It's NZ and current. Not all property accountants are created equal but that book will give you the right questions to ask.
If it were me, I would take it off the market as there seems little interest at the moment and only desperate tenants will want to take it on if it's on the market with people coming through. As you are out of town, take on a property manager and suck up the cost for now. If a new PM as mentioned make sure the terms and responsibilities are clear, the minimum PM period is as short as possible and there is no obligation to pay the PM commission if the house is sold. Get tenants in and wait for the situation to clarify.
Comment
Comment