Looking for advice on investment calculation
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| 1 | Hi, I am looking at buying a small holiday home, hoping to have it rented out on holiday houses or something similar to cover some costs. I am trying to put together a matrix/calculation to figure out if the $$ stack up. I've included cost to purchase/mortgage repayments, insurance, rates, power/water. There are many people on here with far better knowledge and expertise. Can anyone recommend anything I am missing out on or have a spreadsheet they use that would be of use to ensure I'm not missing anything major. thanks foordnz - 2021-05-11 07:55:00 |
| 2 | Have you got the finances arranged already? Banks are rather nervous lending for holiday houses and I doubt that they’ll even consider any potential earnings through holiday letting as a way of making it stack up. As soon as you have to pay commissions for reservations, cleaning and/or management fees as well as the extra costs for rates, insurance, power, internet etc there is sweet FA left to go towards the mortgage. I don’t want to rain on your parade but I’d do the sums as though you are the only family going to use it. They are not a great money making investment as some would suggest, especially in these COVID times which is why there are plenty for sale... lovelurking - 2021-05-11 08:26:00 |
| 3 | I notice that the beach houses up north near me that were holiday lets in the summer are on the for sale market now until spring happens each year ,mind you they are over priced but just in case someone falls in love with the place over winter toyboy3 - 2021-05-11 08:40:00 |
| 4 | Propertytalk.com has, or used to have, a section with useful resources including various calculation spreadsheets. Format has changed but you could ask there. artemis - 2021-05-11 09:40:00 |
| 5 | Also take into account the emotional cost etc that renting out your holiday home to a complete group of strangers... no amount of insurance / on-site supervision etc can make up for "personal toll" of having your home trashed !! onl_148 - 2021-05-11 10:45:00 |
| 6 | I would just aim for renting out during the year until you have met the costs of the rates and insurance, at least. Any more and that is great. . I don't think you should be buying a second house, that is not a strict rental property unless you can service the mortgage off-site ie not rely on income from a holiday let to service a mortgage. Different if it was an investment purchase. If you do decide to rent out check around as not all holiday letting firms are created equal. It is a hard job doing your own housekeeping/servicing. Apart from the usual pests who let all their mates stay in tents all round the section, the big nuisances being those who leave all their food in the fridge thinking that this will be useful.....it is not. Always leave a gap between lets..... Best thing is to get people who want to rent regularly, even if you have to look at a slightly lower level of rent. I had two families and they were great. shanreagh - 2021-05-11 12:20:00 |
| 7 | foordnz wrote: we have just sold ours only had it 18 months. Used book a bach and others to maintain it. Problem was kiwis are dirty vandals, cleaning firms unreliable and cleaning staff kept losing the laundry. Although the booking firm paid for repairs and replacements we had to keep being present to clean, replace etc. Became too much. And yes we are paying tax on the sale. gabbysnana - 2021-05-11 19:26:00 |
| 8 | gabbysnana wrote: toyboy3 - 2021-05-12 09:13:00 |
| 9 | gabbysnana wrote: I work in a small laundry doing mostly linen from homestays and we get blamed a lot for losing laundry, but it's not us. Most of the times it's not the cleaners either, guests have a habit of taking linen with them for some reason. Or they bleed or vomit on it and are embarrassed so throw it away. annie17111 - 2021-05-12 09:33:00 |
| 10 | So now Adern has committed political suicide and brought in 39% capital gains tax, I would be very wary of any investment you might be about to make. bill1451 - 2021-05-12 09:42:00 |
| 11 | lovelurking wrote: differentthings - 2021-05-12 17:27:00 |
| 12 | bill1451 wrote:
Not strictly true. The Government has simply extended the Bright Line Test which was first introduced under National. Edited by committed at 6:45 pm, Wed 12 May committed - 2021-05-12 18:38:00 |
| 13 | lovelurking wrote: True. It's amazing how those management expenses add up. During the years I was letting my holiday home in Spain I found that the local managers were making more from the one week bookings than I was so I had to introduce a two week minimum stay. webworth - 2021-05-12 23:57:00 |
| 14 | Ive had a holiday let apartment in nelson for several years with a lease to the onsite manager, After costs and body corps i was left with nothing and had to pay a substantial annual body corp. i couldn't cancel the lease as it was 10 years plus 10 years so i sold it - to the onsite management company who could cancel the lease and now sell them as owner occupier homes for 4 times the price. The upside was i could use and arrive at an impeccable and wonderful place each time i wanted to use it and was a lesson in leases etc. shorebee - 2021-05-19 13:27:00 |
| 15 | This message was deleted. andrew697 - 2021-05-20 06:50:00 |
| 16 | andrew697 wrote:
Correct, a CGT in all but name. Though it doesn't apply to all rentals if bought before the various start dates. A lot of changes to rentals in the past 3 or so years, and it will be interesting to see what impacts they have on the house market. One change is that landlords are taking risk a lot more seriously now. Social housing waiting list up almost 50% in the year to February. Emergency and transitional housing up almost 40% in the same period. artemis - 2021-05-20 07:09:00 |
| 17 | andrew697 wrote:
But she's so kind... seaqueen - 2021-05-20 07:53:00 |
| 18 | get an accountant to advise you. Legislation has changed in the last few weeks. spead - 2021-05-20 16:39:00 |
