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Today, we will discuss the other 2 parties that are part of every lease
contract:
KIM HENARES
Ate Kim’s involvement is much shorter so lets start there.
Simply put, rental income is taxed. You have to report it and consolidate
it with the rest of your income.
How? It is an absolute headache but here is a BASIC overview of the
things involved:
1. Registration with the City Hall where the property is located. Why?
Because you are engaging in a business in the city and like any
business, you MUST register.
2. Depending on the amount of the lease, VAT may or may not be
levied. This means that you have to remit any VAT you collect on a
regular basis — which could mean monthly mag-fifile ka ng VAT sa
BIR.
3. Issuing receipts and maintaining books are the ideal — especially if
you want to minimise your taxes. However, this means going
through the process of registering the books and receipts. (Ouch.)
4. If you are a salaried employee, this means consolidating your
salary with your rental income. This MAY mean you end up in a
higher tax bracket and will have to pay additional income taxes.
5. If you are an OFW, this means having someone here to pay these
taxes for you and keep records of those payments.
Now, uunahan ko na kayo: Wala bang mas simpleng paraan para diyan?
Meron, but it would be best if those steps came from a lawyer or a CPA.
And since I am neither, I will not go there.:) (Mag-aaway lang kasi tayo
)
Ok, after Ate Kim, now lets talk about the tenant.
THE TENANT
This means that your property should be located in an environment
where you can find a steady stream of potential tenants. What
environments? Near business centers and exclusive schools are good
areas. I would suggest near schools like Ateneo, DLSU, UST & UP as you
are pretty sure that every year, rich students from the provinces will be
looking for places to stay.
Once you have found a prospective tenant, here are some things that
must be EXPLICITLY indicated in the lease contract:
Payment terms
Post-dated checks for the life of the lease are the norm. Often dated on
the first day of the month. Also, are dues included in the payment?
Security deposit
How much, what it will cover and when will it be returned.
Pet Policy
Are they allowed? If so, what kind?
Guest Policy
Can your tenant invite his entire barkada or clan to stay indefinitely in
the unit?
Inspection
Most unit owners reserve the right to inspect the property on a
REGULAR basis — provided the tenant is given due legal notice.
Terms of Renewal
Is it automatically renewed at the same rates?
Terms of Eviction
This has to be VERY, VERY clear.
Now, is that a complete list? No. Which is why I strongly suggest you
hire a professional to help you design a contract that protects your
rights. At least for the first unit you lease out. After that, you can use that
first contract as a template for succeeding units.
Well that’s it for today but its not the end of this series. On Monday we’ll
discuss the issues and challenges of having tenants. Until then, have a
good weekend everyone. #AralMunaBagoInvest
Click www.pesosandsense.com/seminars
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Comments
Mark Aguinaldo says
August 29, 2014 at 12:44 pm
Reply
Trackbacks
A Landlord’s Primer says:
August 29, 2014 at 2:19 pm
[…] A Landlord's Primer (Part 2) says: August 29, 2014 at 11:27 am […]
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