Today we spent the day trying to figure out the details around buying The Sinking Houses. We must have asked a thousand questions in our effort to understand how Norwegian businesses run, taxes get paid and just what the costs will be to own these houses. At this point, we are completely on the line and don’t know one way or another how this will play out but we are both at peace with whatever happens.
We found out that small businesses use accountants and auditors that work for the bank. These bank employees keep the books and file the taxes and are just there, available for the business customer's use. That’s different. We also found out that it’s not very expensive or time consuming to set up something similar to a limited partnership business, but they do require 100,000 kroner deposit with the bank (about $15,000) that is held as security for some time period until after the business folds to be sure that all the final bills get paid. (But then the money is refundable.) And owning a small business is a much better way to go as the profits are never taxed until they are withdrawn for personal use. So in that regard, Norwegian tax laws would work well for us. Norway taxes individual earnings upwards of 50%, so it’s much better to have rental income run through a business than taken personally, especially since we’d need to build up a pile of cash for any major work that may be required in the future. The only drawback to having the business is that the interest rate on the mortgage is going to be much higher (and that's a BIG drawback).
We checked one of our three requirements off the list today and tomorrow we’ll see about the other two. The one criteria that is already met is the caretaker job. We have a few relatives that can fix anything, like Kory, and both of them said they would be available for any handy-man work that’s required if we aren’t here to do it. One even said he’d be the overall caretaker as he lives very close to us and has a vested interest in who moves into these houses. Tobias (who is soon 13) said he’d be happy to keep the grass cut in the summer months, so that problem is solved.
We drove around today getting prices on things and Kory figured out the costs to build porches and to bring in loads of gravel and put stove tops in a few units and repair some sewer lines to make these places livable. It seems right now, those costs will be under ten grand, but we still have a few expenses we don’t know about so that’s a partial open door. And as for potential renters, we called two people today we knew were interested and one said it was too far out of the city and the other said it was too much money to pay, so that door partially closed. We have two more potential renters we will talk to tomorrow but we need four lined up, or that will be the door slamming firmly shut and the whole deal with be a no-go. What a ride.
Kaleb spent most of the day with Tobias, either at his house while we were running around town, or here at home. He also took the daring step of walking George by himself, the dog we are dog sitting. On the first walk, they barely got out the door when George pulled so hard on the leash Kaleb got pulled through the middle of a huge mud puddle, slipped and landed smack dab in it. Then on the second attempt George got wrapped around some bushes and managed to pull out of his collar so that gave Kaleb a terrible fright. Fortunately it all happened in front of our house and Kory saw the dog running down the street with Kaleb in hot pursuit so we came to the rescue. Kaleb is beginning to understand the full responsibility in owning a dog and he’s not liking it so much. Hallelujah! His interest in dogs seems to be taming just a bit so I’m hoping by the time we get home he will not be asking for a dog of his own. But then, when we get home, there aren’t kids to play with like there is here, so then the dogs take on a greater significance. Uff da.
I have been glued to the internet reading up on all the stories and watching video clips and live news feeds of the big snow storms hitting the Pacific Northwest this week. I can’t believe we are here when record snow and cold hit there! We’ve certainly had our share of cold and below zero temperatures, but it’s not the same because here it’s normal. So many times at home we’ve waited for those winter days when we would be snowed in, and now they’ve come and we missed them. I’m a little sad about that, especially if Washington finally gets a White Christmas! We had Odd and Turid and Hege here for dinner tonight and they assured us we’d have a wet, windy Christmas, as they always do, with a chance of slush, just to make it interesting. I think I’ll just listen to Elvis and have a blue, blue, blue Christmas.
We found out that small businesses use accountants and auditors that work for the bank. These bank employees keep the books and file the taxes and are just there, available for the business customer's use. That’s different. We also found out that it’s not very expensive or time consuming to set up something similar to a limited partnership business, but they do require 100,000 kroner deposit with the bank (about $15,000) that is held as security for some time period until after the business folds to be sure that all the final bills get paid. (But then the money is refundable.) And owning a small business is a much better way to go as the profits are never taxed until they are withdrawn for personal use. So in that regard, Norwegian tax laws would work well for us. Norway taxes individual earnings upwards of 50%, so it’s much better to have rental income run through a business than taken personally, especially since we’d need to build up a pile of cash for any major work that may be required in the future. The only drawback to having the business is that the interest rate on the mortgage is going to be much higher (and that's a BIG drawback).
We checked one of our three requirements off the list today and tomorrow we’ll see about the other two. The one criteria that is already met is the caretaker job. We have a few relatives that can fix anything, like Kory, and both of them said they would be available for any handy-man work that’s required if we aren’t here to do it. One even said he’d be the overall caretaker as he lives very close to us and has a vested interest in who moves into these houses. Tobias (who is soon 13) said he’d be happy to keep the grass cut in the summer months, so that problem is solved.
We drove around today getting prices on things and Kory figured out the costs to build porches and to bring in loads of gravel and put stove tops in a few units and repair some sewer lines to make these places livable. It seems right now, those costs will be under ten grand, but we still have a few expenses we don’t know about so that’s a partial open door. And as for potential renters, we called two people today we knew were interested and one said it was too far out of the city and the other said it was too much money to pay, so that door partially closed. We have two more potential renters we will talk to tomorrow but we need four lined up, or that will be the door slamming firmly shut and the whole deal with be a no-go. What a ride.
Kaleb spent most of the day with Tobias, either at his house while we were running around town, or here at home. He also took the daring step of walking George by himself, the dog we are dog sitting. On the first walk, they barely got out the door when George pulled so hard on the leash Kaleb got pulled through the middle of a huge mud puddle, slipped and landed smack dab in it. Then on the second attempt George got wrapped around some bushes and managed to pull out of his collar so that gave Kaleb a terrible fright. Fortunately it all happened in front of our house and Kory saw the dog running down the street with Kaleb in hot pursuit so we came to the rescue. Kaleb is beginning to understand the full responsibility in owning a dog and he’s not liking it so much. Hallelujah! His interest in dogs seems to be taming just a bit so I’m hoping by the time we get home he will not be asking for a dog of his own. But then, when we get home, there aren’t kids to play with like there is here, so then the dogs take on a greater significance. Uff da.
I have been glued to the internet reading up on all the stories and watching video clips and live news feeds of the big snow storms hitting the Pacific Northwest this week. I can’t believe we are here when record snow and cold hit there! We’ve certainly had our share of cold and below zero temperatures, but it’s not the same because here it’s normal. So many times at home we’ve waited for those winter days when we would be snowed in, and now they’ve come and we missed them. I’m a little sad about that, especially if Washington finally gets a White Christmas! We had Odd and Turid and Hege here for dinner tonight and they assured us we’d have a wet, windy Christmas, as they always do, with a chance of slush, just to make it interesting. I think I’ll just listen to Elvis and have a blue, blue, blue Christmas.
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