House Reno Proposal

It all depends on the people you are dealing with and your own attitude. I did excactly what youre planning to do about 25 years ago in Germany. We did end up in court and I won so he had to pay the court costs as well and I didnt have to pay any rent for nearly 2 years.
I would sit down and do the whole deal in writing. Including all the numbers and most importantly what you think you should get paid per hr.
If I was doing it again I would rather pay the standard rent and send the owner a bill from time to time so everybody knows whats going on.
You could even quote each job and get the ok before starting.
I wish you luck and try to use your head more than your heart.
Cheers
Reiner

I would not be paying full rent while having the discomfort and inconvenience of living in a demo site. I assume the rent AFTER the reno's were finished, however, would be much higher than possible at present so you might also try to consider building in a bit of rent relief later on so your work does not price you out of your home!

While cautious, if you were keen to proceed, I suggest you negotiate a much lower rent for a specified period (6 mths/12mths?) during which time you agree to live in the current sub standard conditions while also renovating to a proposed program of works. This would be on the understanding that at the conclusion of the specified period both parties agree to renegotiate the next period and work to be completed....or to walk away without any penalty.

I don't know what the tax arrangements are for properties in NZ but presumably the lower the rent received the less the tax to be paid, so there is some benefit to the owner in NOT getting the full rent while the reno's are being undertaken.

Could get complicated and nasty real quick if either side has unrealistic expectations or plays silly buggers so it will really depend upon the bona fides and personalities involved if it is going to work out as a win-win....

Put it this way, I think there will be limited gain for you in this situation. not only do you live in a work site with the inconvenience, you get to pay for this privilege and then work you ass off to get a better house, pay higher rent, and reap no capital gain!

Time is money! Cost the reno - then deduct this from the rent and have the owner pay you the balance. Even at $400 per week rent this is $20,800 per year - how much for the repairs, labour, supplies - that's a crap wage f in my book but a good deal for the owner, who benefits from tax benefit for income and tax benefit for repairs while the property is earning an income.

While this may be cynical, the fact the owner wants to paint over the mould may indicate her desire for quick fixes at cheapest price with no regard for the output. Why don't you offer to buy the house and do it up for yourself? There is only one party benefiting here - and that's not you.

Bottom line, irrespective what we all think, do the figures and if you think you are getting a good deal, then go for it. Be prepared for lots of angst though, shortcuts and bodgeys.

cheers

Renovating is painful hard work. Only do it on a place you own and will receive the benefits of.

Rotten timber and mold suggest that parts of the house are waterlogged - damp, cold and miserable to live in in winter. Would you want to live in these conditions??

It can be tricky and sometimes expensive to identify how damp is getting into a house and then remedying the problem. In Aus there are engineers specialising in this issue. Would your dads friend bear these costs?? Probably not - she sounds a cheepskate.

Another approach would be to get a licensed valuer to do three professional rental valuations of the house:
** as it now is,
** as a construction site, and
** after full professional restoration.
And then get a couple of quotes for a full professional restoration, specifically including elimination of dampness.

This will open your eyes fully, and give you a sound basis for negotiation. I think the cheepskate will run faster than you should. And we haven't mentioned complicated issues like legal responsibility, insurance and subjective differences in expectations.

Personally, if you want to do some renovations, then I think that you put a minimum deposit on a house and renovate your own property.

Good luck, (but hope you don't need it)

Graeme