First time Landlord - Advice needed - Galway City

Bass Cadet

Hi!

I've recently bought a 3 bed semi-D in Galway city (first time buyer -29 yrs old). Its very close (very short walk) to the University college Hospital, NUIG university and about 5 min walk to Dominick St, city centre. The house is only 15 years old (other houses in area are much older), spacious with a large back garden (not overlooked) and car space for 2 to 3 cars (two off-street). The area is very quiet for its central location, etc

I'm trying to do mortgage monthly repayment calculations here and am trying to come up with a fair and decent figure for a lodger who would be renting a fairly big double room (also presuming they would also need car parking). I will be owner-occupier and rent would include bin collection, maybe satellite TV and broadband? -thats it.

I've had a look at all the local newspapers with accomodation listings and have come up with a figure in my head but I'd like to get other's views on what I should charge if possible. Preferrably someone who has rented before in Galway city although any suggestions welcome. Also any advice on what bills should and should-not be included in the rental price is very welcome!

Victor

Two things to keep in mind.

The Rent-a-Room scheme allows you to earn up to 7600 euro per year tax free (includes all charges, rent, ESB, gas, TV, food, etc). Consider whether you want 1 or 2 rooms rented out.

For anything that is a fixed fee (as you say bin collection, maybe satellite TV and broadband), include it in the rent. If there is a variable charge - ESB, gas and so on, then that should be allocated on a per person basis. Otherwise your ESB bill will be 400 euros a month.

The_Conductor

First of all, I assume that you are an owner occuppier, and are simply letting a room in your new house, not letting the whole house (sorry- its not entirely clear from your post!)

If this is the case, and you intend to make use of the Rent-a-room scheme, your gross income from the prospective tenants is capped at 7,620. If you exceed this amount- the whole sum is taxable income, not just the excess. As such this would mean your maximum gross all inclusive income from this tenant, could not exceed 635 per month. This 635, is inclusive of all bills, billshares, or money you would be seeking from them.

Note: when you are simply letting a room in your house, the tenant is not really a tenant, they are simply a lodger in your house, living there under licence and are not entitled to the protections that a tenant would normally have.

The multiple car-parking spaces aside, the nice garden etc are not entirely relevant to your calculation when considering what to charge them. Having the carparking space, broadband, satellite tv and other amenities will make the room easier to rent, certainly.

Normally you get less money from prospective tenants when its an owner occuppier letting a room in his/her house (in reflection of the lesser rights that person has and the inconvenience of having their landlord living with them). So its not really valid to compare your potential rental income from this person with what apartments/flats/houses are renting for in the general area.

An idea might be to try to target postgrads for the room- interns are on 6 month rotations at NUIG hospital, and would normally make good tenants (as they are in constant supply, and wouldn't leave your room empty or on short term filling over the summer to someone who might not care about your home). Just a suggestion.

A further suggestion- parking around Dominic Street etc is dire (and its all disk parking too). Perhaps you might think about subletting the parking spaces seperately? The income would be taxable, but it would be treated as exclusive to your rent-a-room income (as there is no tenant involved).

Note: If you make a point of saying its a fairly big double room- in most cases this will act as an advertisement that you may possibly be looking for a couple. I take it this is not the case. Many people would like to have a nice double room, but few would consider it worthwhile paying a massive premium for it (a small amount more perhaps).

Point to remember- you are letting a room in your house, not the whole house. So things that may be relevant if someone were renting the whole house, like 3 parking spaces, large well tended garden etc etc etc simply are irrelevant to someone taking a room in your home.

Bass Cadet

Thanks for the advice guys

smccarrick - the parking spaces are private and would not be subject to any county council parking restrictions. Interesting about the owner occupier bit and actually living in the house as landlord with lodgers. Never really thought about it like that but that makes sense. My own renting experience has been good as I lived with a owner-occupier aswell but we got on great -i suppose being the same age and such so never thought about it that way, although I can appreciate that any potential lodger may have had bad experiences in the past or may be just wary of an owner-occupier

All things considered, the figure I had in my own head is 360 to 380 a month to include bin refuse and then all other major bills to be split after that. I'm obviously new to all this but I have time on my side as I won't be moving in until at least October so plenty of time to scope it all out. Also have a single room that I may be letting which may or may not bring me over the rent-a-room scheme break-off point. Does the 360 to 380 figure sound reasonable for what I've described (for the double room)?

Miguel_Sanchez

That sounds reasonable to me.

Having said that I haven't lived in Galway for 2 years so no sure what prices are like there at the moment.

The_Conductor

To be quite honest, I think 360-380 is very attractive, and you should have no difficulty in getting takers at that price point.

MysticalSoul

I would advice, as an owner occupier, who has a lodger, to charge in addition to the rent, any gas, esb or oil charges, as otherwise you are likely to have a hefty bill every other month from bord gais and esb. Also, it would be vital to have a contract drawn up, even unofficially, detailing what is/is not included. I learnt when I did not draw one up, that even though the tenant agreed to everything verbally, disputed things once the bills came.

Bass Cadet

irishamethyst wrote:

I would advice, as an owner occupier, who has a lodger, to charge in addition to the rent, any gas, esb or oil charges, as otherwise you are likely to have a hefty bill every other month from bord gais and esb. Also, it would be vital to have a contract drawn up, even unofficially, detailing what is/is not included. I learnt when I did not draw one up, that even though the tenant agreed to everything verbally, disputed things once the bills came.

sounds like a good idea alright!

cheers guys