Boarding house

[propertybuyingNZ]

Hi guys,

Anyone is running a boarding house here?

Would you advise me on the pitfalls? Both accounting / tax and also management and potential pitfalls? Council convrtsion requirements?

Thinking about converting a larger house (6-8bed) and doing some research if it's viable.

Thanks much!

[Nick G]

I'll add insurance and lending as a pitfall but I haven't really checked it out beyond chatting with other investors.

[PTWhatAGreatForum]

You will need to treat it as a job rather then an investment. It's the sort of 'business' which needs active management.

[propertybuyingNZ]

Thanks guys!

yeah, I know its more work, I have some holiday lets, they are more work too, but not that much.

anyway, a few questions come to my mind:
- When I buy it, its not a boarding house yet, just a big house with multiple rooms, Do I have to notify lender after the conversion? Originally they will/would lend on the house as that is the current condition.
- Do I have to be GST registered to run a boarding house? or the 60k GST exception still apply? Preferably I dont want to be GST reg as dont want to pay GST on sale (if I have to sell for any reasons)
- Insurance, sure, but I guess its ok if I sort it after conversion?
- What is the main difference between a boarding house or a house share or student share arrangement? only that they are on one tenancy? am I right?

as for management, many times people have on site manager living there for free, might be an option.

Cheers much!

[Wellington Broker]

I don't think the lender would need to know if you're running a commercial enterprise but your insurance company will

[Bobsyouruncle]

There is a law I believe where after you have 5 or more rooms rented you have to be a boarding house rather than just a rbtr in Auckland. Hopefully an owner will shed more light for you.

Some good info here:

https://www.propertytalk.com/forum/showthread.php?29872-Boarding-Houses-and-Rent-by-the-Room