Rental to Family Member

[Success]

Hiya all, looking at renting out IP to a family member.

Does anyone know what the tax requirements are for keeping things above water ?

 

[Propertunity]

Hiya all, looking at renting out IP to a family member.
Does anyone know what the tax requirements are for keeping things above water ?

The requirements do not change for a family member or a stranger.
Keep records of the rents received and the expenses & other deductions.

Make sure you rent at / or close to, market rent for you to be entitled to 100% of the deductions available to you.

 

[wobbycarly]

To maintain full deductability of all expenses, the most important factor, IMO, would be to charge a "market rent".

You may even like to still use a PM, which will show you are carrying on a commercial enterprise (my words) and also give you "buffer" if you need it.

eg. "I'm not increasing the rent, the PM is"

 

[D.T.]

I'd highly recommend not renting to friends / family as most people don't have the heart to keep rent levels up to maxmium.

 

[triton07]

I'd highly recommend not renting to friends / family as most people don't have the heart to keep rent levels up to maxmium.

Have been renting to Father & Mother in-laws for the past 4 years & no issues at all, plus paying premium rent. Also they take realy good care of the property as if it's there own, bonus; repairs & upgrades at their cost.

I must say I'm lucky to have them as my Father & Mother in-laws.

Cheers

 

[MCS_80]

Also keep in mind that renting to a family/friend is exactly the same as going into business with them.

I'd never rent to family/friends myself, would go too soft on them

I would recommend to anyone wanting to rent to family/friends to get the "tenants" to set up a direct debit account for the rent. That way if they fall behind, it will still be paid by the Bank and they will be the bad guy when they charge fee's to the account

Cheers

Mick

 

[huntresslove]

I would recommend to anyone wanting to rent to family/friends to get the "tenants" to set up a direct debit account for the rent. That way if they fall behind, it will still be paid by the Bank and they will be the bad guy when they charge fee's to the account

Cheers

Mick

Hi, just wondering how you'd set up a direct debit account? is it from LL side or tenants side?
Do you need a special account to debit?
I'm pretty sure I can't debit any account from my personal account.

thanks!

 

[D.T.]

Tenants side. Usually they can do it via their online banking depending on who they're with. Otherwise they can visit their bank or perhaps phone. Charges vary between banks.

Mine used to charge a fee for doing auto direct debit each fortnight so I negotiated paying monthly instead so half as many fees