There are a number of reasons why property owners consider turning their home into an Investment Property. They could be looking to upsize or downsize, relocating, wishing to build their wealth or they are having problems selling in the current market.
Here are a few things to consider before turning your home into an investment property:
Capital Gains Tax
Your principal place of residence is Capital Gains Tax (CGT) free. It also stays CGT free for the first 6 years it’s rented out (provided you don’t own another principal place of residence). Before making a final decision, speak with your accountant or financial planner to establish the best plan for your circumstances, always minimizing your tax payable.
Emotional Attachment
If this home has been your family home for many years, you might find it difficult to separate yourself emotionally from the home. This usually means that emotionally it could be quite challenging to have a different family living in the home and caring for it differently. Be prepared that your tenants won’t look after your family home the same way you would, and decide whether you can emotionally handle this.
Tenant Appeal
You bought your home because it appealed to you and your family, but this doesn’t mean that your home is necessarily appealing to most tenants. Consider the features that attracted you to the home and ask yourself if you think that these features would be appealing to the “average tenant”. You might even decide to ask a professional Property Manager to come and have a look through your home and make recommendations on the types of tenants it would appeal to, or if your home is particularly unique and only appealing to a smaller number of tenants.
What has been your experience in renting out your family home? We’d love to hear from you via our facebook page or info@activeagents.com.au.
Active Agents are Hervey Bay Real Estate Agents who specialise in Property Management. For current available properties for rent in Hervey Bay click here. To learn more about our Hervey Bay Property Managers, click here.