Owning real estate gives you options and increases your chances for prosperity and success.
Turning your home into a rental property is one idea that needs considering when life changes or throws up opportunities.
New jobs, new relationships, new adventures are at the heart of a decision like this, emotion will play its part in your thinking – that’s human, but it’s key that you seek sound real estate, investment and tax advice so that you move forward with eyes wide open and continue to have options into the future as circumstances change.
Hanging on to the bricks and mortar of your home while you ‘try something new’ can give you a sense of security; you have a place to come back to if your new living arrangements don’t work out.
Good financial advice is key in this situation, because you are essentially turning your home into an investment property, and as such the Australian Tax Office (ATO) will take an interest.
Generally speaking, the ATO’s ‘six-year rule’ allows you to vacate your home, rent it out and make claims for income and expenses but avoid Capital Gains Tax if you decide to sell within the six years.
The other factors that might also be front and centre in your mind is the mortgage that still needs to be serviced on the property that has been your home as well as the added expenses that come with what will be your new abode.
Working with an experienced property manager will bring clarity and confidence, allowing you to maximise any return and reduce the risk.
A good property manager will be working to keep your original property tenanted, in turn easing the burden of this financial juggle.
He or she will also be making sure that your property is kept in a sound condition, meaning that it is ready for your possible return one day.
The Bega Valley rental market is at its tightest in more than a decade. Landlords are receiving strong returns as rental prices increase as tenants compete for quality properties. If you’re about to embark on a life change and moving out of your current home is on the cards, call Fisk and Nagle 6495 4545.
Sources used: Your Mortgage, Domain, and Smart Property Investment.