IP with child day care

[vaztr]

Hi All,

I'm V new here - I've got 1 IP and number 2 settles in about 2 weeks, but I have a curly question.

My sis in law wants to rent the new place (I know - don't mix business and relos!!!) She runs a Child Day Care. The questions I have are...

Do I have to declare anything on my insurance for the day care? She has her own insurance.

Do I 'pretend' that I don't know a day care is being run there?

Do I have a case to have the depreciation rates changed VIA a Tax Ruling because of the Day Care (eg. Carpets being 'killed' from all the mess)?

Other questions I haven't thought of yet!!

Thanx VAZ

 

[wylie]

Hi there. I wouldn't touch the proposition with a barge pole, especially if you plan to "pretend" you don't know what it will be used for.

I would think if it is to be run as a business, rather than her take in a couple of children like home day care systems are run, that you would have all sorts of hoops to jump through. I seem to remember when a friend was part of the low-key in home family day care system, the house has to be checked and passed.

I wouldn't touch it on either count. What if something goes wrong?

 

[marg4000]

Why not phone the local Family Day Care centre and ask them all about it - I presume that this is the type of care system involved - anything else would require licences etc. They will be able to give you advice as to requirements etc.

At the very least I would make sure that your insurance company knows.
Marg

 

[sparky23]

Wouldn't it then become a commercial property? What about insurance, where would you stand and how would you feel if a child had an accident?

Nope I wouldn't go for that one!

 

[Petal]

Don't rent to your sister in law. Don't rent to someone who will be running a business.

 

[vaztr]

I certainly don't want to 'pretend' that it's not there...

She is currently in a rental where she hasn't told the landlord what she is doing.

Marg4000 - good idea, I will contact the family day care assn today to see what they have to say!!

Thanx all

 

[vaztr]

Spoke with the family day care assn...

They told me to check with my insurance co. and if they don't 'come to the party' to call them back and they'll insure me!

Called NRMA (My insurer on 'all' my properties) and they wanted me to do 'business' insurance. I promptly told them where they can shove ALL my policies.

Called FDCA back - they are quoting on ALL my properties now! and I'll spend the rest of the day calling other companies to make sure I get a good deal!!!

Ah insurance companies - like banks!!

 

[the_captain]

sounds promising, but could this be a breach of your lending conditions. Unlikely you'll be "caught", but I seem to remember somewhere amongst all the fine print on your mortgage would be the purpose for said mortgage i.e. residential investment loan?

Something else to think about and double check

 

[vaztr]

Yeah, Thanx Captain.

I've checked with the bank and they're happy that a Family Day Care isn't a 'business'. Which is funny 'cause the bank (Suncorp Metway) are also GIO Insurance and they won't insure me because it IS a business!!!!!

Right hand not knowing what the left is doing!!!!

 

[jesskaye101]

Years ago I rented a property and ran a successful family day care business from that property. The landlord knew and consented to my request to run the business. I had to get the appropriate licenses through the Child Care Licensing Unit, public liability insurance etc and it all worked out great.
I am not sure if the landlord got any different kind of insurance on their building but the national family day care scheme gave me public liability insurance and contents insurance.

 

[DaveM]

Also check into the ATO rulings re claiming deductions on properties leased to relatives. They do insist that all dealings be at arms length and certain criteria may need to be met (eg third party review of rent value) in order to claim a full deduction.

Personally, never mix family and money.