Renting to family and bank finance

[strongy1986]

Some family members want to rent one of our IPs short term

Pros - won't need a property manager
Will look after it as the husband played a major part in rennovating it

Cons? Is this an issue with the bank or is it just normal income as per any other tenant? I don't want to get caught out when we apply for next loan

Cheers

 

[Mick C]

Some family members want to rent one of our IPs short term

Pros - won't need a property manager
Will look after it as the husband played a major part in rennovating it

Cons? Is this an issue with the bank or is it just normal income as per any other tenant? I don't want to get caught out when we apply for next loan

Cheers

No Issues.

You just need to have a signed Tenancy agreement + EFT payment for rent on a regular basis made into your bank account ( not cash).

 

[Jess Peletier]

It's normal rent, as long as the family is not your husband or wife,and from your post it seems that isn't the case. If you're concerned about the banks treatment of it, you could get a legal lease signed up, then there should be no doubt. I would recommend doing that regardless, just from a 'things can go bad quickly with family' perspective

The only issues you might face is if you are discounting the rent - that can have some tax implications and obviously effects the income from a banks perspective. As long as the amount of rent is market rent, as far as I'm aware you should be fine.

 

[Corey Batt]

Draw up a normal lease agreement and you'll be fine.

 

[Jamie M]

Just treat it as normal - it's not that uncommon.

The biggest disadvantage is the strain it can have on relationships.

Cheers

Jamie

 

[Redwood]

Just treat it as normal - it's not that uncommon.

The biggest disadvantage is the strain it can have on relationships.

Cheers

Jamie

Exactly Jamie, I try not to mix business and extended family (we have a heap of co-investments), it gets emotional and frustrating.....

In this case, yes save on PM fees, however, what if they pay late continually, you have to put your head down and say....pay the rent! with financial difficulties this can become extremely difficult.

Cheers, Ivan