Newbie business question

shaymoose7

Will i make money if i continuesly buy assets such as mobile kitchens and rent them out to people. I figure if i buy one for say 3000 and rent it out, then save again, buy another one and rent that out and so on that i will have more and more streams of income and over time make my money back and get into profit. Will this work

ssbob

shaymoose7 wrote: »

Will i make money if i continuesly buy assets such as mobile kitchens and rent them out to people. I figure if i buy one for say 3000 and rent it out, then save again, buy another one and rent that out and so on that i will have more and more streams of income and over time make my money back and get into profit. Will this work

Hi Shay,

You ened to factor in the following:

1. Cost of assett
2. Cost of maintenance each year
3. Useful life of assett

Therefore if your total rent for the useful life of the assett is greater than the costs as mentioned above then you will make money. You will need to set up a business to carry on a business of this nature, and as the business grows you may need to register for VAT.

shaymoose7

Ok thanks for the info, just wondering. Would it not be possible to rent them out unofficialy as long as i paid for the insurance avoiding VAT and any other legal expenditures. the cost of assets would average about 3000 each, maintanence is virtualy nill bar petrol to run a generator which would be paid by the tenant.

ssbob

shaymoose7 wrote: »

Ok thanks for the info, just wondering. Would it not be possible to rent them out unofficialy as long as i paid for the insurance avoiding VAT and any other legal expenditures. the cost of assets would average about 3000 each, maintanence is virtualy nill bar petrol to run a generator which would be paid by the tenant.

I would not advise you to do anything which is "illegal" per say but I think it would be more tax beneficial for you to set up a business as you could write the costs of these assets off over time therefore not having any profit as such for the first few years.

In terms of VAT, you will not have to register for VAT until you expect your turnover to exceed €37,500 in a given year, and even that would be beneficial to you as you would be able to claim the VAT back on the purchase along with any business expenses and also your clients will more than likely be VAT registered anyway.

Hope this helps.

shaymoose7

shaymoose7 wrote: »

Will i make money if i continuesly buy assets such as mobile kitchens and rent them out to people. I figure if i buy one for say 3000 and rent it out, then save again, buy another one and rent that out and so on that i will have more and more streams of income and over time make my money back and get into profit. Will this work

Aside from what ssbob says its all about supply and demand. Whats the competition, what are their rates, and how often do they rent out their mobile kitchens? If you could find the number of the market size, ie. how many are rented per year it would give you a good idea of whether you came make money taking a small piece of the market

shaymoose7

thanks guys, this has been very helpfull. as for the illegality side of things, i was just curious as to weather there was a loop hole to avoid official business and just lend people the assets for cash but you have cleared up most of my quieries and i think i will go for the most straight and narrow approach. any tips like various cheap high yeailding assets other then kitchens ?

No need to worry about loop holes. Just set up as a sole trader and as far as I remember you get a document to fill out at the end of the year where you list all your costs and expenses etc and pay tax on the profit, on an 'honesty' system. Like ssbob said you can write off the price of the assets, get the VAT back, have the depreciation of the asset as an expense. So in reality your not going to be paying that much tax, unless you rent loads of them.

Once you get over the low tax bracket, and you start paying real taxes you can afford to get an accountant to advise you on ways handle your taxes efficiently.
Honesty is the best policy moving forward, because if you make a lot of cash in your future career, and you adopt the attitude of doing things off the books you might get nailed in later life and get a huge tax bill you cant pay like a lot of American stars, think Wesley Snipes is in jail for it at the moment!

By the way, the latest fad, is gourmet restaurants turning up in a mobile restuarant on a street somewhere just for a day. They spread the word on facebook etc. Has been pretty successful, could be some cash in that if you approached some restaurants that could afford to do such a stunt. If they make money doing it, you have yourself a business. You would want a seriously nice mobile kitchen though, wouldnt get it for 3K!

ssbob

Well I have a friend who rents out bouncing castles and they are a good money spinner for him, but very seasonal.

I am an accountant so if you are looking for some advice when you do set up as a sole trader just pm me, I am very willing to give newbies free advice.

I have got a lot of help on here so it works in roundabouts.

By the ElRifle, you cannot claim depreciation against your taxable profit, you can however claim capital allowances which is basically the same thing just treated differently.

bigneacy

ssbob wrote: »

Well I have a friend who rents out bouncing castles and they are a good money spinner for him, but very seasonal.

I am an accountant so if you are looking for some advice when you do set up as a sole trader just pm me, I am very willing to give newbies free advice.

I have got a lot of help on here so it works in roundabouts.

By the ElRifle, you cannot claim depreciation against your taxable profit, you can however claim capital allowances which is basically the same thing just treated differently.

Looking on donedeal, every second ad in the business section seems to be someone selling bouncy castles - has the bottom fallen out of this market or is it just a very saturated marketplace?

Is this style of "flash mob" cuisine popular or demanded enough in Ireland to give the poster enough of a market or is there some other usage for a mobile kitchen?

ssbob

bigneacy wrote: »

Looking on donedeal, every second ad in the business section seems to be someone selling bouncy castles - has the bottom fallen out of this market or is it just a very saturated marketplace?

The friend I have who does it is one of 3/4 people who do it in the North Cork, South Limerick Area, maybe the market might be saturated in the cities but definitely not in the big towns/small towns and villages.

Another idea OP would be to buy gym equipment and lease them to customers see below, this company already do it but there is definitely a huge market there especially with brides to be etc.........

http://www.toneathome.ie/

shaymoose7

Ok hears another question, if i got o Australia in the next few months like im planning to, would there be many factors in my way of starting this business to do with being abroad, also if i had to come home again and could not sell them in time, could i sell them or rent them from Ireland in Aistralia ?

ssbob

shaymoose7 wrote: »

Ok hears another question, if i got o Australia in the next few months like im planning to, would there be many factors in my way of starting this business to do with being abroad, also if i had to come home again and could not sell them in time, could i sell them or rent them from Ireland in Aistralia ?

Hi Shay, can you clarify if you want this business in Ireland or Australia?

shaymoose7

Yeh sorry, i want the business in Australia but my visa will only permit me to stay 2 years unless i have a sponcer so if the 2 years is up and i have not sold my property can i continue to rent them out or sell them from ireland while they are still in Australia

ssbob

shaymoose7 wrote: »

Yeh sorry, i want the business in Australia but my visa will only permit me to stay 2 years unless i have a sponcer so if the 2 years is up and i have not sold my property can i continue to rent them out or sell them from ireland while they are still in Australia

Thats a totally different ball game Shay. I am not an expert on Australian taxes but I think they operate similar to us and the UK, what I am not sure about is whether you would be entitled to set up a business when on a 2 year Visa? Have you looked into this?