Is this a valid way to boast income?
- Thread starter s050399b
- Start date
It is certain a viable option. Many people already do this to varying extents. However, as others have already pointed out there are also many draw backs, which is one of the reasons most investors don't seem to go down that route.
It also depends where you have the property. In canberra here, there are quite a few rentals out there offering the same kind of fully funitished fully inclusive set up, but they charge ALOT for this, and we have a very high transient population here.
It also depends where you have the property. In canberra here, there are quite a few rentals out there offering the same kind of fully funitished fully inclusive set up, but they charge ALOT for this, and we have a very high transient population here.
.....then of course there are the "big picture" type Landlords who offer all of this extra service, and ask just the normal amount of rent for an empty box, and when the Tenant initially asks for a discount on the rent they give that to them as well. Anything to keep the house tenanted and to keep the renter happy.
They are the ones that typically bought the place 20 years ago for about 55K and think they are rolling in it, and quite happy to undercut the rest of their Landlord colleagues and think nothing of dragging the overall market downwards. It takes about 4 days and a couple of cups of tea for other renters to talk amongst themselves and voila, before you know it, the overall rental market has dropped. Beautiful.
They are the ones that typically bought the place 20 years ago for about 55K and think they are rolling in it, and quite happy to undercut the rest of their Landlord colleagues and think nothing of dragging the overall market downwards. It takes about 4 days and a couple of cups of tea for other renters to talk amongst themselves and voila, before you know it, the overall rental market has dropped. Beautiful.
Well I think it's not all in jest. I know a few landlords who bought property years ago and haven't put the rent up. One of my tenants came back with the old "but the people upstairs are paying" when I put his up.
One landlord in a block at one of my villas is charging $230 for a 3 bedder villa to a nice tenant who has been there for 10yrs. I'm getting $295 for my 2 bedder (some are getting $320). She asked me how much she should get. I told her. A month later when I asked about it she didn't want to discuss it.
I know of a couple of landlords that were a bit like that, and they aren't landlords anymore
They claim that property investing just isn't worth it.
This set up wont increase your borrowing capacity, as most lenders wont use an unreasonable figure, just the average rent for the area/property.
If you showed them the lease, they mightn't use any of the income because they would view it as a serviced apartement, rather than a normal rental.
So no, its not a good way to boost income IMO
If you showed them the lease, they mightn't use any of the income because they would view it as a serviced apartement, rather than a normal rental.
So no, its not a good way to boost income IMO
Interesting point.
I know a couple of "big picture" PMs rather than LLs.
I had a tenant give notice recently. Was rented @ $215/wk. BPPM suggested we put rent up to about $220, I said BS, put it up to $235, as it hadn't had an increase for a fair while.
BPPM said no it won't rent at that, I said put it at $235 anyway.
So guess what? A new lease signed within 24hrs
It leads me to think that some PMs either don't know the market as well as they should, or they are just too lazy to do any more than they need to, to get an IP rented.
I reckon that it's more a PM, rather than a LL keeping rents from rising as they should.
I know a couple of "big picture" PMs rather than LLs.
I had a tenant give notice recently. Was rented @ $215/wk. BPPM suggested we put rent up to about $220, I said BS, put it up to $235, as it hadn't had an increase for a fair while.
BPPM said no it won't rent at that, I said put it at $235 anyway.
So guess what? A new lease signed within 24hrs
It leads me to think that some PMs either don't know the market as well as they should, or they are just too lazy to do any more than they need to, to get an IP rented.
I reckon that it's more a PM, rather than a LL keeping rents from rising as they should.
If the PM was so good he wouldn't be your PM You'd be his PM
You'd be his PMThis is an interesting point. We rent completely self-contained units for a concomitantly higher price ($450/week when the same apartment usually gets around $275/week unfurn). However we've never had any financial institution refuse to loan us money on the above grounds, although we are highly geared - they seem to accept the leases we provide as sufficient. (To give an example, our usual lease terms are 2-3 months).
If anyone has had an experience like this I'd be very interested to hear about it.
Careful there, you're starting to sound like a public servant.
I wouldn't be covering any of the tenants expenses if I had the choice.
The expenses you pay may become tax deductible but in effect you'd really only be getting back a certain % of the payments (whatever your marginal tax rate is). $1 in the hand is better than 15c, 30c, 37c or 45c.
The expenses you pay may become tax deductible but in effect you'd really only be getting back a certain % of the payments (whatever your marginal tax rate is). $1 in the hand is better than 15c, 30c, 37c or 45c.
not if you listen to the ATO and the newspapers... they reckon you are ripping them off to the tune of many billions in a scandalous 'tax bonanza'. (Maybe the ATO should just come out and say "we reckons rents should double, nay triple, so this neg gearing problem goes away" - wonder how the electorate would liek that?)
sounds interesting. Is it possible to cap each of it upto a certain amount?
a standard amount for all except phone calls and furniture would be about 200-300 $ a month for 3 people. So would be great if you could charge an extra 100$ a week for all of this. so ur kinda making 100$ more a month than what you spend + u get tax deductions on these expenses. what am i missing here ?
when i was renting this is the kind of calculation i had used for deciding whether to pay a 100$ a week more with all the above included or pay 100$ less and pay for the utilities.
That sounds like a great idea. Someone should tell them trying to juggle capitalist and communist ideals at the same time is difficult.
Our IP is fully furnished and gets us approx $100 a week extra rent than if it were unfurnished.
When we were purchasing it and setting everything up we never mentioned the furniture to the bank. Everything was worked around the normal rent it could achieve.
Bit of extra effort I guess (not really when one of the team loves shopping!) but it's worth it for us. Just signed up a new tenant at the start of the week (yes, with a rent increase).
Keep the brain ticking, it's good to think of different ways of doing it.
When we were purchasing it and setting everything up we never mentioned the furniture to the bank. Everything was worked around the normal rent it could achieve.
Bit of extra effort I guess (not really when one of the team loves shopping!) but it's worth it for us. Just signed up a new tenant at the start of the week (yes, with a rent increase).
Keep the brain ticking, it's good to think of different ways of doing it.
