So I bought my neighbours house and am giving my brother first dibs at renting it. He currently lives a few suburbs away and likes the idea of moving in next door as it would be closer to other family and save him travel time each day with work. The rent in each suburb is similar and as such what he would receive if he rented out his current home would cover what he would pay me in rent. I know there are tax implications and have made a spreadsheet to get a ballpark figure of whether overall (after tax) he would be better or worse off. My analysis has so far come out pretty even. Am I missing anything major that would change the outcome significantly in one direction or another?
The screenshot shows 2 scenarios. His current situation with a fictitious salary of 100k on the left, and then on the right how it would look if he rented his out and moved in next door. Example assumes 500k mortgage balance on his current place, mortgage repayments of $2k per month at approx 3% interest.
Thanks in advance for reading and I'm looking forward to reading your comments and learning more (if I have missed anything). Please don't bother with comments saying not to mix finances and family. At this stage I am just wanting to check numbers, not discuss family dynamics.
Update: Thank you for the comments saying not to mix family and finances - message received. In terms of the actual advice I am seeking thanks for the useful comments. My spreadsheet was missing Land Tax, factoring in less than 100% occupancy of my brothers house, Capital Gains Tax if he does not return to his current place within 6 years, and a big row, bold and double underlined, about not mixing family and finances.