Switch to rental
Question from Andrew updated on 24th November 2017:
I am planning to rent out my home while I travel for a few years. It is likely that I will continue to rent out the property when I get back, so the switch in use to becoming a rental property will be permanent.
The house has already increased in value significantly since I purchased it five years ago. Do I need to revalue the property before I start renting it out, or would I need to formally change the ownership structure to do that? If so, what would that involve?
As an alternative, should I consider selling my house and buying a new rental property? I'd like to avoid this as my house is in a good area with good rental potential.
Our expert Kris Pedersen responded:
You definitely don't need to sell and then buy another property. There may be benefit in moving the ownership but this will be personalised advice as part of it will depend on your tax residency status over the next few years. It would be best to talk to an accountant who specialises in this field.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz