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     ohkoolnutz
Member
Username: ohkoolnutz
Post Number: 714
Registered: 10-2005
Rating: N/A
Votes: 0
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| | Saturday, January 19, 2008 - 03:55 am: |  
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I need some urgent advice.
I tend to change jobs every three years to get the 25% raise I deserve. Because of the job changes I can't buy a home and tie me into a location and some 30-year contract with the devil. I used to trade but I lost money so I don't trade anymore. I got a well-paying job. I have a large cash protection. I have zero debt. I am 30 years old. I have finished tertiary education up to and including an MBA. I got so much accessible cash I don't know what to do with it (which is the reason that got me into trading).
I always rented as in 'sub-lease' keeping my exposure to long-term commitments down and ability to move freely up.
I lived in this house for six years. I am friends with the owner who lives in the house. There is no lease. It's a pure contract of trust which is summarised by stating "pay me $225/week and all is taken care off including Foxtel/Cable Internet/Food(!)/Electricity/Water/Gas/Furniture". I literally own nothing besides a car and clothing. I had a job for three years with a commute of 22min each way in off-peak traffic. My petrol costs me $25/week bringing my total living costs to $250/week. I now changed jobs with a 40% pay rise and I still work in the same area but my commute has blown to 45min each way due to changed office hours. I hate commuting but I also need a sea change.
I tried to find shared accommodation for sub-lease near my work but I am having trouble getting quality, value or availability. I was looking for a max $180/week plus costs. I could wait and look but I figure the longer I wait the less likely I will move.
I saw this house for lease at $470/week. I haven't looked at it yet but will do so tomorrow.
<advertisement>
This lovely brick family home features:
• Four good sized bedrooms – main with built-in wardrobe and ensuite
• Spacious kitchen with gas cooking, range hood and breakfast bar
• Separate dining room
• Living room with air conditioning
• Floating timber floors in living areas
• Large storage cupboards in hallway
• Good sized back yard
• Single lock-up garage, plus off-street parking for another three cars
• No pets allowed
• Currently being painted internally.
Available from 26 January 2008
</advertisement>
It is a 5 min walk to my work. I put the numbers into a spreadsheet and I figure with the shortage of sub-leasing in this area I might be able to turn the tables on this situation and come out rent-free.
All up the costs of rent/ foxtel/ internet/ phoneline/ water/ electricity/ gas/ etc comes to $600/week. I could sub-lease the three rooms for $200/week and offset my risk of carrying the lease for 12 months with the bonus of not paying living costs by breaking even. In short I am thinking of taking on $350 in risk ($600-$250) to offset my $250 in weekly living expenses and changing my lifestyle.
Here are the calculations:
{calculations moved into next post because the website stuffed up the <pre> </pre> tags}
Please point out errors in these numbers. Is it legal to sub-lease to others and reduce your own costs to $0?
Now you are going to say:
If you got a well-paying job why don't you just rent an apartment by yourself and avoid the trouble? I don't like living alone and the costs of that are $400/week for me which would fall equal to the "worth a try option" above. Considering that alternative it comes down to:
Current Living Costs: $250.00
Risk of Lease in Comparison: $350.00
Single Apartment Living Costs: $400.00
Risk of Lease in Comparison: $200.00
Since I do wish to move I think the second scenario is more applicable. Is this a 2:1 profit:risk scenario? Should I do it if the house checks out alright?
(Message edited by ohkoolnutz on January 19, 2008)
(Message edited by ohkoolnutz on January 19, 2008)
(Message edited by ohkoolnutz on January 19, 2008)
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ohk
Lies, Damn Lies and Technical Analysis
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ohkoolnutz
Member
Username: ohkoolnutz
Post Number: 715
Registered: 10-2005
Rating: N/A
Votes: 0
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| | Saturday, January 19, 2008 - 04:10 am: |
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item suppliercharges periodsperyear costsperyear costsperweek sub-leasers weeklycostspersub-leaser
rent $470.00 52 $24,440.00 $470.00 3 $156.67
foxtel $120.00 12 $1,440.00 $27.69 3 $9.23
bigpond $80.00 12 $960.00 $18.46 3 $6.15
phoneline $30.00 12 $360.00 $6.92 3 $2.31
water $250.00 4 $1,000.00 $19.23 3 $6.41
electricity $250.00 4 $1,000.00 $19.23 3 $6.41
gas $250.00 4 $1,000.00 $19.23 3 $6.41
others $250.00 4 $1,000.00 $19.23 3 $6.41
total $31,200.00 $600.00 3 $200.00
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ohk
Lies, Damn Lies and Technical Analysis
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ohkoolnutz
Member
Username: ohkoolnutz
Post Number: 716
Registered: 10-2005
Rating: N/A
Votes: 0
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| | Saturday, January 19, 2008 - 04:11 am: |
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sub-leasers totalcostsperweek sub-lease_amount sub-lease$collected mycostsperweek status
0 $600.00 $200.00 $- $600.00 risk is scary
1 $600.00 $200.00 $200.00 $400.00 worth a try
2 $600.00 $200.00 $400.00 $200.00 breakeven of my costs
3 $600.00 $200.00 $600.00 $- profit by living rentfree
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ohk
Lies, Damn Lies and Technical Analysis
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dug
Member
Username: dug
Post Number: 2803
Registered: 07-2005
Rating: N/A
Votes: 0
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| | Saturday, January 19, 2008 - 11:13 am: |
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ohk,
you'd need to look into Sub Leasing,I think.
You've previously been a sub tenant of the OWNER.
However you are now proposing to Sub Lease to other Tenants.
As far as I know,The Real Estate agents are now signing up each tenant for bonds etc.
It's not like in my day where One Person was the signed Tenant and this person "allowed"
other people to share the house etc.
Real Estate Agents now require ALL persons living in the house to sign THE lease.
This gives them some protection from defaults/damages by the "First Leasee" saying
they moved out and are not responsible etc blah.
Do you Follow?
Seems the institution of Rental Bond Authorities[RBA] as well as the Explosion in Landlording as an Investment
has brought on these adaptations that MAY stymie your plan.
Wouldn't it be difficult to sign up others when they realise they are paying you more than the right percentage
[1/3 instead of 1/4]?
Why should the Owner allow you to collect More rent [nominally] than they're asking?
Co Tenants can be a Bane to your existence as well as "company",ohk.
They can also take mighty advantage of one.
So I'd first investigate whether you are Able to be Chief Tenant,Lessor
and able to sub-lease without "exposing" the Main Lease to scrutiny.
You'd have to register for Bond Collection to the RBA,for a start.
Ohh it's a real pain doing figures for a Master Plan when there's Laws to Thwart,hey?
cheers.
edit to stop need to scroll on the
super wiiide.
(Message edited by dug on January 19, 2008)
Even 'til Jaded.
Dig for the sake of it.
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captain_chaza
Member
Username: captain_chaza
Post Number: 2957
Registered: 02-2003Rating: N/A
Votes: 0
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| | Saturday, January 19, 2008 - 06:10 pm: |
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Ahoy Ohk
It is always sad to see anybody return to the land
I have often said
"I have Never Ever lost a ship
Except for Twice"
I consider this Good Going
Considering my Age
I'd like to help with my 2cents worth but
Firstly I need to Know
How much money do you have in THE BANK?
Secondly I need to know
How much money do you TAKE HOME each Week?
Salute and Gods' speed
"While we stop and think, we often miss our opportunity." Publilius Syrus, 1st century B.C.
"I believe the future is only the past again, entered through another gate."
Sir Arthur Wing Pinero 1893
"There are two times in a man's life when he should not speculate: When he can't afford it, and when he can." Mark Twain, 1897
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dug
Member
Username: dug
Post Number: 2806
Registered: 07-2005
Rating: N/A
Votes: 0
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| | Sunday, January 20, 2008 - 11:55 am: |
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ohk,
you should also perhaps be aware that your current tenancy in the house of your friend is highly likely to be a scheme of Tax Evasion.
Capital Gains Tax,ohk is not payable on one's own Dwelling BUT
if the house has been room renting to even only one "at arms length" tenant?
well,could be that Capital Gains Tax is applicable?
No,ohk CGT IS applicable.
Now your friend may be Kosher.
Like the Rent is declared each year,expenses written off Far in Excess of rent
[incl mortgage Interest proportion]ie your friend is Negatively Geared.
However he's not too aware of the CGT implications,I feel.
Collecting rent that covers also Food!! well,ya friend appears to me to be skipping around EVASION.
That's why you're paying rent "on d'Cheap".
It's Black Bucks,ohk.
Now I'm not saying you can be "got" for providing Black Bucks
but this "scheme" of yours of Sub Tenanting will also have Tax Implications to you personally.
Profit in Kind of No Rent is still Profit but you run this past some Fancy Accountant to Confirm.
Personally,I think the Rental Authorities and/or the Landlord aren't going to allow your Proposal to Happen.
I sure hope if yesterday you went looking at that Advertised Property,you made Full'n'True Disclosure to the Agent of your Intentions.
Didn't stay stumm/on d'QT while Signing Up.
cheers.Looking forward to your Outcome post.
(Message edited by dug on January 20, 2008)
Even 'til Jaded.
Dig for the sake of it.
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ohkoolnutz
Member
Username: ohkoolnutz
Post Number: 718
Registered: 10-2005
Rating: N/A
Votes: 0
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| | Sunday, January 20, 2008 - 11:02 pm: |
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You know an idea which seemed great at 1am didn't sound so good anymore at 9am. I chickened out and didn't even go look at the place. I don't have a problem making million dollar deals at work but I can't cope with few hundred dollar decision in my personal life.
I was talking to a friend one day and he asked: "What would you do if you won a million dollars?"
I said: "I'd buy a strawberry milkshake."
He said: "And then?"
I said: "Nothing. I'm dying for a strawberry milkshake. I haven't had one in years. The rest I would put into a savings account."
It's semi-delusional because I realise I could just buy a strawberry milkshake right now but I don't have the power to take money from the money I have to buy something I want. I feel the need to wait for the day where I get money I don't have to buy something I want. Of course the day I have gotten this money it becomes money I have and hence again I can't spend it preventing me from using it to get what I want.
dug in particular mentioned stuff I have no clue about and I am glad I am not proceeding down this leasing path. I like simplicity and the least I need is complicate my life.
I had another look at a room in a luxury apartment today but again somebody was ahead of me and it was bonded before I even had a look. I tried now for three weeks to find a place and am pretty close to just sticking to what I have which is a pretty sweet deal. I just have to live with the extra 45 minutes spent in my car.
The rent deal with my friend is not a regular deal. I moved to Australia six years ago. I needed a place to set up from. My friend offered to help me set up in Australia. I moved here. I found a job in the next suburb so there was no reason to move. I went to uni. Time passes by and suddenly I was living here three years. I found a new job still pretty close by and I hesitated moving. Another three years passed by. I got another job at the same location. It looks like I will stay another three years and see where my next job will take me.
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ohk
Lies, Damn Lies and Technical Analysis
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chriso
Member
Username: chriso
Post Number: 87
Registered: 04-2004Rating: N/A
Votes: 0
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| | Sunday, January 27, 2008 - 02:13 pm: |
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Hi ohkoolnutz
It sounds like you go about things in a complicated manner to achieve simplicity.
Go buy a strawberry milkshake, enjoy it, and move forward from there.
Chris
A problem is only a solution waiting to be found.
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