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  1. #1

    Default Renting new home out

    Hi,
    if i could just ask a quetion, my partner and i built our personal home, its our only home, we want to get into investing, but with our mortgage so high at 600 per week, we couldnt start off with investing properly and was going to be a struggle to start, we couldnt quite afford to live in our house, so we are renting it out( the tenants are moving in in 3 weeks on a 1 year contract) at 560 per week. we could either top it up by 40 or get it on interest only and get an income off it, and we are going to rent a house for our selves to live in at 350 per week and look for a rental to buy and rent out. thats a savings of 210 per week just from doing that.
    Just want a bit of feed back about it.
    does anyone think thats a good idea?

  2. #2
    Join Date
    May 2004
    Location
    Bay Of Plenty, NZ
    Posts
    3,604

    Default

    Have you budgetted for LL insurance, rates, maintenance for this ex-home rental?? For some reason, the moment a tenant moves into a property, everything breaks - no matter how new the house is!!

    Don't try and do the end of year accounts yourself, even though it's tempting. Get an accountant. You'd be surprised what can be claimed and can't.

    There's a couple of accountants here you can Private Message (PM) with your queries.

    Remember, your accountant doesn't need to be in the same city as you or your rental. They just need to be really up with the play on rentals and the claims.

    I'd recommend getting used to being a LL and a tenant, before going onto the next rental property.

    It's not as easy as it's made out to be. This can be attested to the very cynical LL's on this site!!
    Patience is a virtue.

  3. #3

    Default

    Yea cool mate, yea we have sorted all LL insurances and budgeted rates and maintenance, bond etc, did alot of home work. we want to cover everything we can. yea thats good advise to get accountnant. do you recomend anyone?

  4. #4
    Join Date
    May 2004
    Location
    Bay Of Plenty, NZ
    Posts
    3,604

    Default

    How one works with your professionals (lawyers, accountants etc) is always a personal issue.

    What personality-type works for me, may not work for you.

    As I suggested, contact those on PT who advertise (see the bottom line of their posts).

    There's no such thing as a dumb question, just a dumb answer.

    Make sure you read the Residential Tenancies Act (click on the blue words to the link), to get an idea of what your obligations are as LL (ie Bond). As well as what the tenant "should" do.

    PT is always here to help/direct/laugh at you!!
    Last edited by essence; 20-11-2012 at 11:56 PM.
    Patience is a virtue.

  5. #5

    Default

    Hi,

    Don't forget the tax. If you are renting out the house you have to pay income tax, but if you live in it, you wont be taxed on that house.

    And sometimes tenant pay the rent late. Will u be able to cover the mortgage if tenants fail to pay the rent.

    I think you should practice with this one before buying another one. It's not as simple as 560-350, because there are many other fees and risk involved.

    Good luck being a landlord

  6. #6
    Join Date
    May 2004
    Location
    Bay Of Plenty, NZ
    Posts
    3,604

    Default

    Quote Originally Posted by NomoneyNotalk View Post
    Hi,

    Don't forget the tax. If you are renting out the house you have to pay income tax, but if you live in it, you wont be taxed on that house.

    And sometimes tenant pay the rent late. Will u be able to cover the mortgage if tenants fail to pay the rent.

    I think you should practice with this one before buying another one. It's not as simple as 560-350, because there are many other fees and risk involved.

    Good luck being a landlord
    Coopscat, see an accountant!! If you're structured right, you may not have to pay income tax on rental income. Every situation is different.
    Patience is a virtue.

  7. #7
    Join Date
    Nov 2009
    Location
    North Shore Auckland
    Posts
    565

    Default

    Quote Originally Posted by essence View Post
    Coopscat, see an accountant!! If you're structured right, you may not have to pay income tax on rental income. Every situation is different.
    I agree.....see an accountant NOW....ask him to explain what sort of things are deductible expenses and what are not

    You'd be surprised at what you can claim....and what you can't

    In particular, check that the interest is a deductible expense.

    And take notes, you'll never remember it all

  8. #8
    Join Date
    Mar 2007
    Location
    Auckland
    Posts
    3,019

    Default

    Quote Originally Posted by essence View Post
    Have you budgetted for LL insurance, rates, maintenance for this ex-home rental??
    Now, now essence that's not true.

    Every news reporter knows that the only cost of home ownership is the mortgage.
    All the rates, insurance and maintenance are free - according to them.

  9. #9
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    14,843

    Default Oh . . .

    And news reporters are always right - right?

    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  10. #10
    Join Date
    May 2004
    Location
    Bay Of Plenty, NZ
    Posts
    3,604

    Default

    Oooops, sorry Flyer

    So silly of me to be practical. I must read those media reports a bit harder. How dare I claim for ACTUAL expenses.

    If we made reporters do physical hard labour for every incorrect report, it'd solve two things. Fitter reporters who'd do better research before they published and less crap in the newspapers.

    I can dream. *sigh*
    Last edited by Perry; 21-11-2012 at 10:52 PM. Reason: fixed typo
    Patience is a virtue.


 

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