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  1. #1
    Join Date
    Feb 2005
    Location
    Auckland
    Posts
    624

    Default How do you charge rent for Sleep-out?

    Hi

    I am looking at a 3 bedroom property with a 2 bedroom & bathroom sleepout.

    My question is how do you rent this type of property out, do you create 2 new tenancy agreements for 2 income streams or charge maybe a family what you think the extra accomadation would be worth. This has always confused me, also am not sure yet whether the sleep-out has a kitchen but will find out today.

    I presume many of you have these types of properties so any information on this would be appreciated.

    Regards

    FH.

  2. #2
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    Really up to you Patrick. Depending on the legality of the property the simplest is to rent the whole property to one tenant and they can sublet or whatever. To have separate tenancies it must be insured as a separate dwelling and that will depend on your insurance company.

  3. #3
    Join Date
    Feb 2005
    Location
    Auckland
    Posts
    624

    Default

    Excellent Poomba,

    I always wondered about sleep-outs, when you have
    2 separate houses on one tittle is when you can rent out to two separate parties.

    The other consideration would be what to rent out the whole property for, so would I be in a good position to say rent the whole IP out for say $450.00 per week.

    I know that other factors such as location, standard of property and renovations factor into account but for the IP mentioned would this be somewhere in the ballpark? $300 for the 3 bed house and $150 for the 2 bed sleep-out.

    Now that I understand what to do with this type of property I need to know what the likely rent I can charge before I make any offers. As I only have one other IP and am a bit low on knowledge of sleep-outs and the like.

    Thanks

    FH.

  4. #4
    Join Date
    Jun 2005
    Location
    Nelson NZ
    Posts
    3,863

    Default

    It all depends on your skill level and how much the sleepout is in the face of the house tenants.
    The RTA does say you need to comply with the building act so one can run into problems if it is not building consented.
    I have tried both systems, separate rents, and combined. I often run into inter-tenant disputes if I do it wrong.
    I have found the best system is to let the house initially with a deal for them that they can choose to have their friends as "tenants" there.
    Usually the power is fed from the house so you need to sort some sort of deal out. Like having a check power meter.
    So anyway once they have choosen their friends you sign the sleep out tenants up. On the tenancy agreement you write "It is ackowledged that this is a sleep out and that you both agree to be bound by the RTA"
    The RTA makes provision to be covered by the RTA when the property is not covered by it. If it is a special "chose to be covered deal" you can agree to have special conditions that are not normally covered by the RTA. Real clever eh.
    Saves getting caught for not providing a stove as apposed to say a gas top and microwave.
    Again do not over look the issue of having the two tenants on good terms with each other. The down side of this sort of deal is the two tenants can gang up on you so you need tenants that are docile and well trained.
    Goodness that could be a completely new business venture for me. Running a tenant obediance training school.

  5. #5
    Join Date
    Feb 2005
    Location
    Auckland
    Posts
    624

    Default

    Thanks Glenn

    Some more tools to add to my tool box.(knowledge)

    I have talked to my builder friend about what I can and can't to with a sleep-out and he also has some good advice. It seems if you want to know something the best way to find out is ask people who know.

    Thanks for all the replys to my questions about this matter.

    All the best.

    FH.

  6. #6
    Join Date
    Jun 2004
    Location
    Auckland
    Posts
    2,103

    Default

    What have you learned from your builder friend? Are you going to rent the sleep-out as a separate dwelling? If so, why?

  7. #7

    Default

    Depending on where you are. - I am in Rotorua so this is my local experiance - probably in a central city area these issues would not be as impt.

    If the access is reasonably seperate and they can't hear each other easily - you shouldn't have any probs with 2 tenancies.

    And if you can have two tenancies its is more likely you will get maximum rent - it is much easier getting two lots of people to pay one lot of rent each than one person to pay two lots of rent - meaning the rent may need to be discounted for one tenant.

    Tracy

  8. #8
    Join Date
    Feb 2005
    Location
    Auckland
    Posts
    624

    Default

    Hi Racy Tracy

    I think you make a valid point, but I think that if you rent out to 2 separate tenancies the sleep-out would have to have a separate meter box, kitchen and shower, and a few sleep-outs that I have seen only seem to have bedrooms (2) so in order to have 2 tenancies I would imagine all these amenities would have to be added.

    So I think that while 2 tenancies is a viable option, it would have to be linked to what worked is required to a sleep-out.

    Thanks

    FH.

  9. #9

    Default

    Hi FH

    Yes a seperate tenancy needs a kitchen sink and some form of cooking - can be plug in hot plates as well as a toilet and shower - if you can fit it in and do it cheaply then it can work well.

    As for power - an idea would be to charge them a monthly fee which would cover it - and provide a monthly fee to the house with the meter to cover power - perhaps with a bit of a bonus for there trouble (ie if you think a bit laterally you could get around that one)

    Tracy

  10. #10
    Join Date
    Jul 2005
    Location
    NZ
    Posts
    976

    Default

    Quote Originally Posted by RacyTracy
    Hi FH

    Yes a seperate tenancy needs a kitchen sink and some form of cooking - can be plug in hot plates as well as a toilet and shower - if you can fit it in and do it cheaply then it can work well.

    As for power - an idea would be to charge them a monthly fee which would cover it - and provide a monthly fee to the house with the meter to cover power - perhaps with a bit of a bonus for there trouble (ie if you think a bit laterally you could get around that one)

    Tracy

    I'm not so sure that this is good advice to be giving. It sounds illegal to me and being illegal is one thing but of course it also invalidates your insurance. If there happens to be a fire or any other sort of claim on the property and there is anything dodgy or illegal the insurance company will walk away.

    It is important that any improvements to your property are permitted by the local authority.

    Aston.


 

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