First time letting an inherited house, any guidance or tips please

pookiepants

Hi there, Am hoping to rent out my late fathers' house in the coming months (first timer aswell) and am just wondering if you got tenants privately or through a letting agency? Can see the attraction of going through an agency (rent paid on time, no 3am calls about a burst pipe etc.!) but obviously these people have to be paid but just wondering if it is worth it? House is in a different county to where I live so would be very handy to have someone local to deal with it (apart from relatives who live nearby)....

The_Conductor

pookiepants wrote: »

Hi there, Am hoping to rent out my late fathers' house in the coming months (first timer aswell) and am just wondering if you got tenants privately or through a letting agency? Can see the attraction of going through an agency (rent paid on time, no 3am calls about a burst pipe etc.!) but obviously these people have to be paid but just wondering if it is worth it? House is in a different county to where I live so would be very handy to have someone local to deal with it (apart from relatives who live nearby)....

Pookiepants- the fact that you're using an agency has very little bearing on whether you get paid your rent on time or not- and if the agency do not have a dedicated maintenance team and out of hours coverage- you would most certainly have tenants track you down with their 3AM phone calls etc.

Unless you are able to cross all the 't's and dot all the 'i's with your contract with the letting agency- making sure you are fully insulated from daily contact with the tenants- which in 90% of contracts is not what happens- you'll have trouble.

A further issue- is that any good letting agencies tend to have pretty steep fees. You need to factor this into any expected rental income from the property.

Regarding letting a house you have inherited- as the property does not have a primary mortgage associated with it (secondary or subservient loans do not count)- the large cost that most landlords offset against rental income to bring down their tax bill- mortgage interest- does not apply). In fact- there would be few costs you could set off against the rental income other than-

NPR annual charge
PRTB fees
Any upkeep or maintenance on the property
Any letting agency fees

Outside of the above expenses- pretty much all of the rental income is taxable- probably at the higher rate and with the (now usual) surcharges- depending on any other income you might have. The rental income is also classified as means for social welfare classifications.

You really need to look into this in detail.

ricman

you inform the revenue before the end of the tax year, fill in a self assessment form ,say income is ten k, mortgage plus insurance is 11k, your tax liability is zero .
If you dont inform the revenue you are liable to pay a large fine.
it takes maybe 5minutes to fill in the form.
if the house/mortgage is in joes name ,joe fills out the form.or put both names on ,if its a joint mortgage.Hold on to all,receipts for repairs, house insurance etc as you may need them if you rental, income is slightly over the mortgage.
Any potential tenants ,ask for payslip, proof of income,letter from employer ,joe blogs works here as job ,x , not an intern,
ten percent of people are liars, they will lie to get accomodation ,be careful.if you wanna rent home out to rent allowance client get a single mother, with one or 2 kids ,each area has a max ra rent level.

The_Conductor

ricman wrote: »

you inform the revenue before the end of the tax year, fill in a self assessment form ,say income is ten k, mortgage plus insurance is 11k, your tax liability is zero .
If you dont inform the revenue you are liable to pay a large fine.
it takes maybe 5minutes to fill in the form.
if the house/mortgage is in joes name ,joe fills out the form.or put both names on ,if its a joint mortgage.Hold on to all,receipts for repairs, house insurance etc as you may need them if you rental, income is slightly over the mortgage.
Any potential tenants ,ask for payslip, proof of income,letter from employer ,joe blogs works here as job ,x , not an intern,
ten percent of people are liars, they will lie to get accomodation ,be careful.if you wanna rent home out to rent allowance client get a single mother, with one or 2 kids ,each area has a max ra rent level.

The mortgage is not fully tax deductable- 75% of the interest is tax deductable, falling to 50% in 2013 (the schedule has it being abolished in its entirety by 2017- and the current government have remained strangely mute on two separate PQs as to whether they intend to follow the schedule).

So- if you have a mortgage of 10k (which the OP won't have- as they have inherited the property and only a primary mortgage counts, no other liens), and the entire 10k is interest- 7,500 of the 10k is an allowable expense in tax year 2011/2012, falling to 5k in tax year 2012/2013 and 2.5k two years later.

There have been numerous representations made to the government to try to get them to reverse the proposed abolishment of mortgage interest relief for landlords- however there has been absolutely nothing said on the matter thus far.

wyndham

I would try to avoid the agency route if possible. Apart from the expense involved, do they really care who they let to? In my experience, a lot of agencies just want the property let and commission earned. Their hands are then washed of the situation, and they may not necessarily be ideal tenants.

There is no ongoing management of the property or letting, unless arranged separately.

odds_on

Having sorted out the ins and outs of the tax and revenue, you have to address the problem of all the laws relating to rental property and tenants. You should download the "Rental Tenancy Act 2004" and study it thoroughly. Many so-called "agents" do not know these laws.

So many new (and many who have been renting for some time) landlords do not know their obligations nor how to deal with tenants and problems that arise during a tenancy.

You will also have to get a BER certificate before offering the house for rent (or if you decide to sell).

Raskolnikov

odds_on wrote: »

You will also have to get a BER certificate before offering the house for rent (or if you decide to sell).

I wouldn't bother with that. In my time of renting, I have never seen a property that has been let-ed with one of those.

Raskolnikov

ricman wrote: »

you inform the revenue before the end of the tax year, fill in a self assessment form ,say income is ten k, mortgage plus insurance is 11k, your tax liability is zero .
If you dont inform the revenue you are liable to pay a large fine.
it takes maybe 5minutes to fill in the form.
if the house/mortgage is in joes name ,joe fills out the form.or put both names on ,if its a joint mortgage.Hold on to all,receipts for repairs, house insurance etc as you may need them if you rental, income is slightly over the mortgage.
Any potential tenants ,ask for payslip, proof of income,letter from employer ,joe blogs works here as job ,x , not an intern,
ten percent of people are liars, they will lie to get accomodation ,be careful.if you wanna rent home out to rent allowance client get a single mother, with one or 2 kids ,each area has a max ra rent level.

That's mostly good advice in fairness.

Another thing not to forget is to transfer all bills from your name to the name of the tenant. The amount of amateur landlords that come on here complaining that they're stuck with a €1k electricity bill because the bill is in their name and they have done a runner.

Say hello to my little friend

Where do you look apart from daft for houses for rent.

The_Conductor

Say hello to my little friend wrote: »

Where do you look apart from daft for houses for rent.

myhome.ie for starters- I'm sure there many more.
Daft.ie- while brilliant at what they do- are far from the be-all and end-all when it comes to renting property.

odds_on

Raskolnikov wrote: »

I wouldn't bother with that. In my time of renting, I have never seen a property that has been let-ed with one of those.

Failure to provide a BER certificate before a lease agreement is signed cannot be remedied by a subsequent provision of such certificate unless the tenant is simultaneously given the opportunity to back out of the lease. Thus, any lease agreement made without previously furnishing a current valid BER certificate to the would-be tenants may render the lease agreement invalid.

Article 10 of the Regulations provides that a person (a landlord or his agent) who contravenes any requirements of the Regulations commits an offence. Such an offence is punishable by fine on summary conviction not exceeding €5,000.

Incidently, the past tense of "let" is also "let"!

Merch

smccarrick wrote: »

Pookiepants- In fact- there would be few costs you could set off against the rental income other than-

NPR annual charge
PRTB fees
Any upkeep or maintenance on the property
Any letting agency fees.

NPR cannot be offset against tax on rental income

EricPraline

Raskolnikov wrote: »

I wouldn't bother with that. In my time of renting, I have never seen a property that has been let-ed with one of those.

I've seen plenty of properties for both rent and sale that provided a BER. It's the legal right of a tenant to see the cert before agreement to a letting - at least it'll give some indication of the energy efficiency and level of heating bills that you might have during the tenancy. Of course, this being Ireland many people choose not to comply with the legislation.

smccarrick wrote: »

myhome.ie for starters- I'm sure there many more.
Daft.ie- while brilliant at what they do- are far from the be-all and end-all when it comes to renting property.

Not sure I'd agree with this. Myhome has comprehensive sales listings, but their rental listings are very sparse, mostly high-end Dublin properties. Daft and its affiliates (rent.ie etc) dominate the online rental advert market. Perhaps newspapers are still used for rental adverts in some parts of the country, but in Dublin the days of leafing through the Herald were ended by Daft.

Merch

Raskolnikov wrote: »

I wouldn't bother with that. In my time of renting, I have never seen a property that has been let-ed with one of those.

I believe its a legal obligation for a landlord to provide a BER, kinda makes sense for a tenant to ask for one also. In theory the BER is a good idea, but as a system I wouldnt say its the best, overall it might give the occupant some idea if the building is really good or really bad re cost to heat.

odds_on

Merch wrote: »

I believe its a legal obligation for a landlord to provide a BER, kinda makes sense for a tenant to ask for one also. In theory the BER is a good idea, but as a system I wouldnt say its the best, overall it might give the occupant some idea if the building is really good or really bad re cost to heat.

See post #11

The onus is on the landlord (or his agent) to show the prospective tenant the BER cert. The tenant shouldn't have to ask to see it.


A B1 rating of 2 bed apartment would cost a tenant in the region of €500 per year while the similar apartment with a rating of D2 would cost approximately €1,600 per year; a difference of €1,100.
For the average 3 bed house, the difference between B1 and D2 would be in the region of €1,555 per year.

If you want to waste your hard earned money it's up to you.

Merch

odds_on wrote: »

See post #11

The onus is on the landlord (or his agent) to show the prospective tenant the BER cert. The tenant shouldn't have to ask to see it.


A B1 rating of 2 bed apartment would cost a tenant in the region of €500 per year while the similar apartment with a rating of D2 would cost approximately €1,600 per year; a difference of €1,100.
For the average 3 bed house, the difference between B1 and D2 would be in the region of €1,555 per year.

If you want to waste your hard earned money it's up to you.

Show it/ask for it they either have it or not (I am saying its a legal requirement) I'm saying if its not offered a tenant should ask.
Do you have a link to where you got those figures?
What I am saying is that the calculations to determine heat loss are somewhat complicated and variations between buildings cannot be taken into account by the BER accurately, so the system is standardised. Costs of running a system can also depend on how it is used so one system can have different costs when operated by different people.