Letting part of a property

Discussion in 'Investment Strategy' started by Jockosaurus, 16th Oct, 2020.

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  1. Jockosaurus

    Jockosaurus Well-Known Member

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    Hi all

    Does anyone have experience with letting part of a property? I have a 4 bed duplex on the Gold Coast which is currently fully let, but I wouldn't mind keeping the downstairs bedroom for personal use when I want to pop down from Brisbane. Obviously it would require some goodwill from all parties and a rent reduction, and there are tax and CGT implications, but are there any legal or other pitfalls also need to consider? How unattractive might such an arrangement be for future tenants?

    Tx
     
    Jockosaurus, 16th Oct, 2020
    #1
  2. wylie

    wylie Moderator Staff Member

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    As a tenant, I would absolutely hate having my landlord pop in and sleep in the downstairs bedroom.

    You'd be sharing a kitchen with them too. I wouldn't even accept this set up for a rent reduction.

    Why not just hire a B&B or unit for the times you need to stay down the coast. How often would it be?
     
    wylie, 16th Oct, 2020
    #2
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  3. Angel

    Angel Well-Known Member

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    NO WAY
     
    Angel, 16th Oct, 2020
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  4. Stoffo

    Stoffo Well-Known Member

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    If it was a shed out the back, used for storage, with occasional access required by the landlord, with 7 days prior notice to attending, MAYBE :rolleyes:
    (Yes, this was an example from experience. But the landlord would rock up "whenever" and would always say "but I dropped a notice in the letterbox last week", BS !).

    If you put this proposal in writting to any current tenant I'd expect they'd A, say no and B, use it as grounds to terminate without notice or costs :confused:

    This example is like leasing to family, sure it might work out, but is fraught with hazards and likely issue's :oops:
     
    Stoffo, 16th Oct, 2020
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  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    A residential tenancy lease would generally be defined as the whole of a property. So you would need to exclude part of it. And then face issues with water use, electricity and more. This means YOU will pay it all and they will pay nothing since the seperate meter rule is failed. Its wierd. Its like asking if you can put a spy camera in the shower. And totally unattractive to tenants. More likely will create a dispute and then a QCAT decision would be adverse. eg we didnt break the shower screen, you did.

    You would also have a portion of costs which are private and non-deductible eg 1/4 of the property costs. It would also not be partially CGT exempt or land tax exempt as it is neither a principal place of residence (land tax) or a main residence (CGT).

    IMO its easier and cheaper to rent elsewhere when you want to stay on the gold coast.
     
    Paul@PAS, 16th Oct, 2020
    #5