Hi everyone,
My partner and I are the proud owners of two caravans! [biggrin] One is tiny – a tin can/shoebox – not much use. The other one is a 25 foot caravan with a 25 foot annexe. It has 3-4 ‘rooms’, OK bathroom with brand new shower and a good size fridge. We need to do some work on the kitchen and build in a base for a mattress. Other than that, it is pretty homey.
We were originally going to fix it up and sell it, then we considered keeping it for ourselves on site somewhere as a holiday home, and now we are contemplating whether we could set it up somewhere and use it as an IP.
Is anyone able to offer us any advice on the latter of these options? We are not sure what the rules and regulations are (we are in Victoria), whether or not this is a good idea, if there is trouble getting insurance etc. Any hints, tips, warnings, information or other would be very much appreciated!!
Thanks in advance.
Cheers,
Ali G
Hiya Ali,
As there would be no capital growth in a caravan I would treat it as a business rather than a property investment.
Unless, of course, you bought a block of land,
If you did buy a block the a little rent from a van should mean you can claim the interest and other expenses.
Cheers mate,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Todays Hot Rate
3 year fixed – 6.57%Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Simon!
Thanks for your reply.
Sorry to be vague, but how do you mean ‘treat it as a business rather than a property investment’? What would I do differently?
Cheers,
Ali G
Hi Ali G,
I think he means to rent it out with higher rent on a week-to-week basis rather than having it as long-term rental agreement.
Kind Regards,
Geo.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
I mean that it isn’t a real estate investment. It is a depreciating asset that is generating an income. Much like hiring our any form of equipment.
An IP must be real estate that apreciates over time and may also provides an income.
It is the same as my mortgage broking business generates income yet is not an IP. It helps me buy them though.
Thats why I suggested if you owned the land then it could be an IP.
I don’t mean to rain on your parade. If it will make an income stream then go for it. But treat it as a business rather than as an P – it is two different styles of management with very different techniques..
Hope this makes sense.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Todays Hot Rate
3 year fixed – 6.57%Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks so much Geo and Simon!
Simon, you are not raining on my parade, you are helping me get my thinking straight! I did not consider the topic wording much but you are absolutely right. It is not an IP. Hadn’t really considered it one but it is still a dwelling of sorts and I guess that is what made me call it an IP! I have been corrected, and now all is good. [biggrin]
As for treating it like a business, are you suggesting that I get an ABN and hire it out? Can you elaborate on the management technique you had in mind? Sorry to ask what are probably very basic questions… [blush2]
Cheers,
Ali G
Having never done this before I don’t know. However I would consider the following:
Advertising
Lease agreement inc bond?
Repairs needed – esp if they happen out on the road somewhere in the night!
Insurance
ABN, GST, Taxation and accounting software.
Hope this gets you thinking,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Todays Hot Rate
3 year fixed – 6.57%Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks Simon. You are a champ. [smiling]
Ali G
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