Hi. We have this 6 bed room by room rental that has a high rate of tenant turnover like every 5-6 months. Is it possible to convert it to a backpackers/airbnb? Would anyone know the tax implications or do we need some sort of consent for this? Thanks
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Room by Room Rental converted to AirBnB or Backpackers
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AirBnB seems quite popular - a friend of mine uses it to rent out a studio flat under her house. It's high turnover of course - but I guess the rental income more than makes up for it.
cheers,
donnaEmail Sign Up - New Discussions, Monthly Newsletter, About PropertyTalk
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Not sure about consents, but in terms of tax, if your annual turnover is expected to be over $60k you'll need to register for GST. On a 6-bed place that comes to $10k per year per room. $200 per week, about $25 per night. Of course, that's assuming full occupancy which you'll never get in an AirBnB situation.AAT Accounting Services - Property Specialist - [email protected]
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Thanks Donna and Anthony. The past year has been really difficult getting tenants for our rental. Rents tend to go lower and lower especially when everyone is looking for free internet and power for low rents. Tourists though increased in the past few months.
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Having stayed at AirBnB accomodation, I can see that it is a high time-and-labour involvement for the operator.
You need to clean the place between tenancies, and supply and change the bedding and towels.
More like running a motel really. Too much work for me i'm afraid.
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If you have the rooms available AirBnB would be quite a good semi-passive income. I have stayed in this type of accommodation over the three times I have been to Europe and it works well. The landlord does not even need to actually live in the same building as the accommodation but has to be nearby. Rented a two bed flat in the Cotswolds and the landlord only saw me only at the start and the finish of the stay. Towels etc were provided for the entire period and breakfast every morning consisted of tinned fruit and cereal with milk and toast . In one location at the Isle of Dogs London (near Greenwich) we didn't even see the landlord except on the last day. On a business trip to Italy during March last year the company I visited put me up in a five star hotel and afterwardsstayed at a B & B in Venice for several nights. Again breakfast was supplied every morning and that was the total involvement of the landlord until I left. I live in Paraparaumu and it's crossed my mind to look into it.
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Thanks for all your inputs. Its becoming more and more attractive to go this route. I will probably try it on one or two bedrooms to see if cashflow improves. I have just queried with the local council and they want me to pay $2500 for a resource consent application to be allowed to do this
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