Renting to a family

the drifter

Hi all im thinking of travelling for a year next year and will be renting out my house. it will be let on a one year lease with no option for renewal. ive been told not to let it to a family as if they can prove they have no where to go you cant put them out if they have kids....is this true or a load of rubbish?

bugler

There's no special status or allowances made for families in that manner, AFAIK. What you do need to be aware of is the existence of Part 4 tenancies. You can read about these on Threshold.ie or even this site itself (just search for "tenure" or the like).

"The landlord can terminate the tenancy without reason during the initial six months but once the tenancy has lasted six months, the landlord will only be able to end it on specific grounds. Acceptable grounds include the tenant not complying with their obligations (e.g. not paying their rent), the landlord intending to sell the dwelling and the landlord requiring the dwelling for his own occupation or for a family member. For a complete list of the acceptable reasons, contact Threshold."

Seeing as you'd need it for your own use you can have the property back after the year if you need it. For simplicity and fairness I'd make it quite clear to the tenants that there will be no option of extending the lease. A family is particularly likely to be thinking of a more longer-term letting than say a group of singles.

kmick

bugler wrote: »

For simplicity and fairness, I'd made it quite clear to the tenants that there will be no option of extending the lease. A family is particularly likely to be thinking of a more longer-term letting than say a group of singles.

+1
Tell them you cant offer more than a 1 year contract.

the drifter

cheers lads said in the first post i was going to do this but just wanted to make sure!!

Emerald Lass

Drifter - be careful in regards to tax though - if you are out fo the country then the tenant is entitled to hold back 20% of the rent for the revenue. You should ring the revenue and find out where you stand (and if necessary wht fibs to tell! lol) I live half of the year abroad, but I have to return to Ireland regularly and get my earnings paid to Ireland so that I am still considered a resident of the state, and this makes my tax at the end of the year easier.

In regards to letting to a family, there are pros and cons - one pro being that it is probably more likely to be a steady tenant, and there will be most likely at least one wage in the house, if not two. One con is that the more people in the house, the more wear and tear. And some peoples kids are animals! and when its not their house, they don't correct the kids when they play football against the kitchen wall!

also, if you are thinking of renting out, the sooner you make a start the better. The market is slow right now, so it may take a while. Also bear in mind that from Nov to the end of Jan is traditionally a quiet time for getting tenants, so if you wanted to travel around that time you would need to get organised well in advance.

finally, get someone you trust to manage the property for you. It is not fair to be an absentee landlord, as the tenant cannot get you in an emergecny. Also it means that you are letting them know that you are unavailable to check on them for months on end, and this may mean that your house gets wrecked. I DO NOT RECOMMEND ANY LETTING AND MANAGEMENT AGENTS - to my detriment I learned this the hard way and since my bad luck I have found that most people share my experiences. A family member or good friend is a better bet - even if you have to give them a few quid, its worth it to have someone available to check on the house for you.

chump

the drifter I'd try not to rent to a family.

Even in terms of them lasting 12 months.

In the back of their mind is 'gotta be gone from here in 12 months' and so it is very possible they'll start looking around a bit earlier.

the drifter

my sister will be looking after the property for me as she has a few of her own let out. and my parents live next door so they will be able to keep an eye. im planning to leave next april so will advertise in january i dont mind living with the rents for a month or two if i have too. i didnt know that about the 20% tax i will def check this out thanks!

auerillo

the drifter wrote: »

Hi all im thinking of travelling for a year next year and will be renting out my house. it will be let on a one year lease with no option for renewal. ive been told not to let it to a family as if they can prove they have no where to go you cant put them out if they have kids....is this true or a load of rubbish?

You have to be careful and look to the worst case scenario.

Firstly, a family, if they have young children, wil be more likely to cause more damage.

Additionally, if they don't leave after 12 months, how likely is a judge to be sympathetic at the sight of a mother and young child in court crying because they have no where to move to compared to a couple of single people?

Additionally, if your tenants cause a lot of damage, a court will be less likely to make an award against a poor family with children, for restitution, than against a single person or two who have less financial commitments.

Renting property, where there are children involved, is less certain if it comes to eviction. Obviously you hope it won't get to eviction, but you have to consider the worst case scenario.

the drifter

it looks like ill not go down the route of getting professionals in instead of a famliy im fairly well located and not far from industrial parks so hopefully should be ok!

mydarkstar

the drifter wrote: »

my sister will be looking after the property for me as she has a few of her own let out. and my parents live next door so they will be able to keep an eye. im planning to leave next april so will advertise in january i dont mind living with the rents for a month or two if i have too. i didnt know that about the 20% tax i will def check this out thanks!

The tenant being obliged to withhold 20% of the rent is one possible option since you are non-resident. The tenant witholds the 20% and pays it over to Revenue.
- "At the end of the year, the tenant must also give a completed Form R185* to the landlord to show that the tax has been accounted for to Revenue. The landlord can then claim this amount as credit on their annual Tax Return."

There is also another option for you. If you are non-resident you may appoint a collection agent (perhaps your sister if you like) and they are responsible for the filing of your tax returns. This 'agent' must be resident. In this case the tenant pays the gross rent to your collector. The rents are taxed under a separate Collection Agent tax reference (allocated by Revenue) as opposed to being taxed under your own PPS or under your sister's PPS.

- "Where an agent resident in the State, is appointed by the non-resident landlord to manage the property and the agent is collecting the rents, the rents must be paid gross to the agent. The agent is then chargeable to tax on the rents as Collection Agent for the landlord and is required to submit an annual tax return and account for the tax due under Self Assessment. Leaflet IT10 Guide to Self Assessment* provides more detailed information.

Note: The agent appointed need not be a professional person, i.e. it can be a family member or other person prepared to take on the responsibility and undertakes to make annual tax returns and account to Revenue for the tax due."

All the above quotes are taken from the Revenue website www.revenue.ie, they have a leaflet IT70 Guide to Rental Income which will be helpful to you. Or ring your local tax office of course!

the drifter

excellent thanks ill get on to the tax office im going to appoint my sister as an agent for me!