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Daqtar


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"Rent or Not to Rent" that is the question
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Greetings all,

My partner and I are intending to do the big lap soon.

 

My question is, do I rent out my house?

This means:

Placing my household goods into storage, which means packing everything up (I'm not as fit as I used to be) that will be a pain. 

Getting a real estate agent to manage the property

Landlord Insurance.

After the trip:

Getting my goods out of storage.

Overall, the cost of storage, insurance and Realestate management costs 

What would be your income return at the end of the day (rental approx $400)

Is it really worth it?

 

 

 

 

 

 



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Whenarewethere


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Depends if you really need the money. If you free camp most of the time you save a lot of money.

 

We don't let & we free camp so it balances itself out.

 

While you are away & if the property needs a plumber or electrician they cost a fortune in an emergency.



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Wizardofoz


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It is simply a matter of finances and choice, personally, I have never let out a home that I live in, just had family caretake it, for gross $20,000 I would not rent it out as the costs will eat up half of that and who knows what repairs and maintenance will be required, I have beachfront property that remains vacant all year, except for the kids visits, when I am away. As I said, it depends on your finances and whether it would be worth it, I think not, but it is all the decision of yourself.



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Mike Harding


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Most of the people I've known with rental houses have had at least one horror story to tell.



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Blues Man


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You could rent it fully furnished .



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Whenarewethere


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There are renters is our block of units, when they go on holidays they chuck their "rubbish" in one bedroom & lock the bedroom door. Then they let their rented unit out as a 1 bedroom holiday unit on one of those holiday rental websites.



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rgren2


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Rent counts as income, if youre on a pension, that will be affected.



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TheHeaths


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Another consideration is meeting your home insurance requirements re being empty for a period. Ours requires someone to be coming around and staying for a short period regularly after 60 days. If you have family thats fine, but may cause an issue. Do you have children, or older grand children, or a close friend who may be able to house sit, using your belongings?



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Wanda


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Just do it.
I see from your profile, asuming its not BS, you are not of pension age!!

The money you can make is just not worth ignoring, simples really.
Even if your property sustains some minor damage, you have their bond and make sure your insurance is all up to date.
We did it for 2yrs, yes we had some minor issues but nothing that could not be painted or repaired on our return. And we got ALL their bond!
We pocketed $50k after all costs, its a no brainer
No shortage of tennants at the moment, and there are many good people renting, just be very very carefull with your selection and NO pets!!
As far as renting furnished, we did(removed all valuable gear) and would NOT recomend this, it narrows your tennants down because MOST tennants have most of their own furniture.
Its a good time to sellup and rebuy new furniture when you return, after all, you"ll have spare cash$$$$$$$ on your return
cheers and just do it, I hope this helps
Ian
PS: If you have solar and are on the old schemes with high tariffs, DO NOT LET the TENNANT CHANGE ELECTRICITY INTO THEIR NAMES. You will loose your feedin tariffs at the high rate for ever. We kept electricty in our names, still getting 54cts feed inwink



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Whenarewethere


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Wanda wrote:

 and NO pets!!

 

I let a property, the other rule I have is no smoking.



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Wanda


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Whenarewethere wrote:
Wanda wrote:

 and NO pets!!

 

I let a property, the other rule I have is no smoking.

Yes I agree, but its very hard, if not impossible to police.

One of the other important factors is finding a good agent, thats even harder than finding good tennants, seriously!

I think this is where you MUST insure that your insurance is absolutely top of the range

With all the negatives associated with renting your home it is still worh it if you are away for longer than 12mths, in my opinion and experience

We have done it twice in our lives, first back in 1987-88(first home) away for 18mths and again in 2013-16(4th home) away for 2yrs, NO regrets

Ian



-- Edited by Wanda on Thursday 19th of May 2022 10:11:31 AM

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deverall11


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TheHeaths wrote:

Another consideration is meeting your home insurance requirements re being empty for a period. Ours requires someone to be coming around and staying for a short period regularly after 60 days. If you have family thats fine, but may cause an issue. Do you have children, or older grand children, or a close friend who may be able to house sit, using your belongings?

 Very important and often overlooked mainly because nobody read the fine print and/or the 

legalese T & C.

We left for a lap in 2011 for waht we thought was 12 mths. Organised to have it rented. Ended up

going for 4 years as we were having to much fun. The clue to a successful rental is a top notch

property manager and landlord insurance it case it goes pear shape. 



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Are We Lost


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Would you tell your tenants upfront that you intend to be back by x date and they will have to move?

I did exactly that but still had to take them to the tribunal to get them evicted. Then to the tribunal again when there was disputed damage. They had "accidentally" removed some light fittings and a few other issues. With a bit of late rent I never did get the shortfall from the bond although it was not enough to try pursuing.

In another, tenants swore their small dog was an "outside dog". I relented because the rent was good. Yet when they moved out, there were wee stains on the carpet in most rooms and the smell was strong. The tribunal will approve steam cleaning and deodorising but don't care if the smell remains. Same for insurance. New rules in NSW (elesewhere?) say you must have a reason to exclude pets. Many tenants have learnt to say no pets on the application and then do it anyway.

I have other stories as well, but over the long term, the majority of tenancies work out fine.

So my recommendation would be to look at the situation as you would a long term investment. Over the long term it works out well because the bumps are ironed out, with good tenancies making up for the bad.

Also, the type of property affects the result. If you have pristine carpets or nicely polished flooring you are more at risk.



-- Edited by Are We Lost on Thursday 19th of May 2022 12:50:27 PM

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yobarr


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If my experiences are any indicator, NO. After endless trouble with tenants I gave up and sold both properties. House in Brisbane, 4 bedroom etc, was rented to a lady who swore that she lived alone, but her daughter would move in a month later. No smoking, no pets, and she was a keen gardener who would absolutely love to maintain my shrubs, hedges, ferns etc. Away I went, happy that I had a good tenant, but I soon got calls from neighbours saying that her drug-addicted husband had moved in, and that as well as being a heavy smoker he was wrecking the place. Drove his car into the garage door, punched holes in the walls, had a dog that soiled all carpets. Because I had a 6kw solar system on 52 cents FIT I had never had a power bill but left electricity in my name to preserve that FIT. She turned off the inverter and ran the power bill up high, then refused to pay. Refused to pay for water which in Queensland is in owner's name. Owner pays supply charge and tenant pays owner for water used. Let all my garden and lawns die, with neighbours sending photis to me. THEN she announced, out of the blue, that because of COVID she'd lost her job and would from now on not be paying rent! Because border closures meant that  I was stuck in NSW there was little I could do. Rental trubunal would not help, and she just kept refusing to pay anything. Cost me $8000 to get her out, and thousands to repair damage so I could sell. Similar in Geelong where an agent in Highton prepared a 12 month lease with a young couple but a couple of months later I was advised that the couple were terminating the lease because of "hardship", one of the few ways a lease can be terminated. Investigations on my behalf by a third party soon revealed that rather than suffering "hardship" this young couple had not only purchased their own home, but they'd bought it through the very company that was managing my place, and had prepared the lease! This RE company has no ethics, no principles and was very upset when they learned that I had listed my place for sale with another company. The other company got $15,000 more for my place than the first company said they'd even list it for! Sold in two weeks, so probably still too cheap? Be very careful. Cheers



-- Edited by yobarr on Thursday 19th of May 2022 01:43:03 PM

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Cupie


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Renting out your 'Home', or even part of it has Capital Gains Tax implications when you sell it.



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montie


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My advice...rent it unless you intend to stay traveling permanently. You sell your house today the replacement cost in 5 years could be scary to a point where you might not be able to get back into the market at all. A friend sold his house in 2019 for $900k....that house today is worth $1.8m. No way he'll ever get back in there so his only choice is to go backwards.



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yobarr


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montie wrote:

My advice...rent it unless you intend to stay traveling permanently. You sell your house today the replacement cost in 5 years could be scary to a point where you might not be able to get back into the market at all. A friend sold his house in 2019 for $900k....that house today is worth $1.8m. No way he'll ever get back in there so his only choice is to go backwards.

 Absolutely! However, our decision to sell was made only after much consideration of what we planned to do for our remaining years. We had decided that we would build a van that allowed us to live off-grid for as long as we wanted, or at least until the 600 litres of water ran out and we had to refill. She wanted to travel until we found a country town that we liked, with plans to buy enough land so she could breed Alpacas and I could build a dirt racing circuit  to play racing cars on! That all fell apart when she was diagnosed with terminal cancer and died 4 months later. There still is money in the bank so that if I do find a little town that I like I can then buy a property, but I intend to travel for as long as my health allows. Mind you, with new knuckles last year and now a stuffed shoulder, it is apparent that old age is not kind to us! Cheers



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Wanda


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Cupie wrote:

Renting out your 'Home', or even part of it has Capital Gains Tax implications when you sell it.

Not necessarily.

If, and thats IF your thinking of selling when you return maybe speak to your accontant first, just to be sure.

Definately don't listen to that sort of advise of that nature here

Ian



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yobarr


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Wanda wrote:
Cupie wrote:

Renting out your 'Home', or even part of it has Capital Gains Tax implications when you sell it.

Not necessarily.

If, and thats IF your thinking of selling when you return maybe speak to your accontant first, just to be sure.

Definately don't listen to that sort of advise of that nature here

Ian

Ian, you are of course quite right there, as the rules are not complicated and easily manipulated if you've owned and lived in the  property for more than 12 months. Suffice to say that if you have the right contacts there's no problem. But  we won't go there! Cheers



-- Edited by yobarr on Thursday 19th of May 2022 03:53:49 PM

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deverall11


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Wanda wrote:
Cupie wrote:

Renting out your 'Home', or even part of it has Capital Gains Tax implications when you sell it.

Not necessarily.

If, and thats IF your thinking of selling when you return maybe speak to your accontant first, just to be sure.

Definately don't listen to that sort of advise of that nature here

Ian

 Correct Wanda. Too many know it alls who know jack s*&t. You have 5 or 6 years before you are liable for Capital Gains. Not sure exactly.

Easily checked. Move back in for 6 mths it resets the clock. Just in case have an official value before you go. Capital Gains will be calculated on that.



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Wanda


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Look, first up, its important to get good, correct advise.

Also you do hear some horror stories, but, if you spend the time checking references and other checks its still very very viable to rent your house and make some easy money.

And chances are you will get good tennats, mostly!

You must get a good agent and good insurance to cover any disasters Don

Don't sell and get out of the market whatever you do, especially at the moment!!!!!

As far as notifying tennants of your return, thats what a lease is for??

Cheers Ian



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Cupie


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deverall11 wrote:
Wanda wrote:
Cupie wrote:

Renting out your 'Home', or even part of it has Capital Gains Tax implications when you sell it.

Not necessarily.

If, and thats IF your thinking of selling when you return maybe speak to your accontant first, just to be sure.

Definately don't listen to that sort of advise of that nature here

Ian

 Correct Wanda. Too many know it alls who know jack s*&t. You have 5 or 6 years before you are liable for Capital Gains. Not sure exactly.

Easily checked. Move back in for 6 mths it resets the clock. Just in case have an official value before you go. Capital Gains will be calculated on that.

 I stand by what I said. 

Renting your Home WILL have CGT implications. 

That is not to say that you will necessarily loose all or part of the place of residence CGT discount. I didn't say that.   

It is just another factor to research & take into account before making a final decision.

I find it rather amusing that posters resort to such language as demonstrated above.  Poor form & perhaps not in keeping with forum rules.



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Wanda


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Likewise, i stand by this, "NOT NECESSARILY SO", get some advise

Seeing as you are saying, you "WILL"???????

Can I ask how, when and why?

Ian



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Cupie


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My last word on this issue .....

I certainly am not an expert on CGT so will not give specific advice.

Just go to the ATO Web site for information & you will see that under certain circumstances there will be CGT implications.

Perhaps all this kerfuffle may have been avoided, if in my initial post I had said there MAY be CSG implications.

It was my intention to alert the OP of the need to consider CGT implications.

Of course as said by others, it would be prudent to get the advice of an appropriate Accountant et al before making a decision.



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Wanda


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Correct, kerfuffle could have been avoided if worded differently

Your not alone there!

cheers

Ian



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Are We Lost


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Wanda wrote:
..........

As far as notifying tennants of your return, thats what a lease is for??

Cheers Ian

 Was that part of your comment in response to my story about having to go to the tribunal to get tenants out?

In my case, I told them before signing it would be 12-18 months and they would have to move out. At the end of the 12 month lease I verbally told them I am not renewing the lease, but you can stay another few months. 2-3 months later, I gave them 3 month's notice in writing. But when the time came, and they had not moved out, they said they did not want to disrupt their child's schooling. I think they didn't have the money for a removalist and the next bond.

So I needed to engage the tribunal .... about 2 weeks to get a hearing and the tribunal gave them 2 more weeks. In the meantime, they stopped paying rent. So, I was forced to put things into storage, pay for short term rental, and a double move.

 



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montie


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Would you prefer to sell the asset to save some tax in the short term or keep the asset and take the benefit of market gains and get some Cash flow on the way through.

Your home is your biggest asset...it took you a long time to earn it...be careful what you do with it.!

My advice rent and in 5 years return to a much more valuable asset but consult a financial advisor.

Unless of course you need the money now.



-- Edited by montie on Thursday 19th of May 2022 07:26:23 PM

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oldbloke


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Well, IF I do a big trip will not rent out. Too much risk IMO. Don't need to anyway. $ would be handy but we are OK without it. Will get one of the grand kids (or another close relative) to house sit.



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DMaxer


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Welcome to the forum Daqtar. Given that you have the management of a major asset to consider, I would suggest that you have a chat to your local solicitor first of all and then perhaps to a registered accountant so that you can be fully appraised of taxation, insurance and legal issues regarding tenancy. It is not a straightforward exercise, particularly if the house is under any form of encumbrance.

Do you really think that the advice of well meaning but unqualified people on a caravan forum is the prudent way for you to determine how you deal with a major asset?

Some of the replies I have read on this post are just totally incorrect. It seems the less qualifications some people have, the more eager they are to give advice.



-- Edited by DMaxer on Friday 20th of May 2022 08:08:46 AM

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Wanda


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Are We Lost wrote:
Wanda wrote:
..........

As far as notifying tennants of your return, thats what a lease is for??

Cheers Ian

 Was that part of your comment in response to my story about having to go to the tribunal to get tenants out?

In my case, I told them before signing it would be 12-18 months and they would have to move out. At the end of the 12 month lease I verbally told them I am not renewing the lease, but you can stay another few months. 2-3 months later, I gave them 3 month's notice in writing. But when the time came, and they had not moved out, they said they did not want to disrupt their child's schooling. I think they didn't have the money for a removalist and the next bond.

So I needed to engage the tribunal .... about 2 weeks to get a hearing and the tribunal gave them 2 more weeks. In the meantime, they stopped paying rent. So, I was forced to put things into storage, pay for short term rental, and a double move.

 

Yes, you obviously had difficult tennants, yep sad but it does happen.

But overall most renters, most, are fine but that is why we have leases and tribunals to sort the bad tennants AND BAD LANDLORDS out.

Reality is also there are some bad LL out as well, lets not just focus on the tennants!

You just have to be carefull and do all your home work with tennants and make sure your agent and insurance are top notch, but sometimes even then things can go belly up.

Thats life!

Ian

 

 



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