I am considering purchasing a boarding house with 7 rooms rented to individual tenants. It has a low vacancy rate. I would be paying the utilities out of the incoming rent.
Q: If I separated part of the backyard off and moved into a caravan or site shed… Can anyone see any problems, or reasons why I would not be able to do this?
The reason the idea is so attractive to me is, after all expenses are paid, the incoming rent (and the fact I would not need to pay rent myself) – would mean I could own that $450,000 property outright in just 4 years.
Opinions/ideas welcome.
Hi,
Have you checked with the local council as to if this is something that they allow/are happy with? I thought local council generally frowned on people living in a caravans etc behind houses. But if they don't care and the tenants are fully aware that you (the landlord) lives within sight over the back fence then hey if it works for you go with it. I would just make sure that each tenant is fully aware of it. Not being told your landlord lives within shouting distance does not make for a comfortable situation for tenants (been there
)Good luck sounds ok otherwise
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeThanks for the reply. I did ask local council years ago and I think they said as long as no-one complains, they couldn't care less. But yes, will have to check again if it's still the same.
I was thinking more of the lender or insurance company though… If they would have any problem with it that I cannot come up with.
Oh – and reading my question again, I realised someone may take me the wrong way… I wouldn't be subdividing the block… Just putting up a temporary fence. Maybe it would turn out I'd only be there one, or two, years. But if I *could* last four years, I'd certainly be way ahead.
If you are not subdividing then I can't see why they would have a problem especially since you would be moving in well and truly after all loan settlement would take place.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Mewould there be any sort of tax issue here with living on the same block as your IP? being a boarding house, i'd be guessing you as owner pay all the utilities so you'd be claiming 100% gas/water/elec… if you started living on the block in a caravan i assume you'd connect to these?
other than perhaps not being able to claim quite 100% of the utilities (if we're talking about doing things by the book) would there be any other tax issues?
sorry i don't have the answers, but am interested too seeing as i'll be setting up a boarding house next year as an IP.
Just to state the obvious – the presence of a caravan at the rear of a property can give it a "poor" feel, and this could influence the quality of individual that stays at the boarding house.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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