First-time Landlord - Advice Needed

Funnyonion79

Hi, I'm planning to rent out my apartment for the first time and have a few questions that I hope some experienced boardsie landlords can answer for me:

Landlord Insurance:
The apartment itself is insured under a block policy and included in my yearly management fees.
When I'm insuring the contents of the apartment (i.e. my own furniture, as I'm letting the apartment as furnished), do I get landlord's insurance seperately? Or can you get landlord/contents insurance?
Roughly what should I be looking to pay per year? Just a ballpark...
Should I notify the management company that I'm taking out landlord's insurance i.e. does this affect the block policy?

I'm going to manage the property myself as I keep reading and hearing only bad reports about letting agents.
Where are the best places to advertise for tenants? Daft?
Any advice when placing an ad?
Similar properties are renting for between 1000 - 1200 per month in my area - should I pitch the rent at 1200 to start off with and then lower it, if I get no responses? Or should I pitch my rent at 1100 from the get go?

I pay management fees every year and these include refuse collection?
Can I charge my tenant the price of the refuse collection each year?
Do people do this? (Only reason I ask, is because when I was renting an apartment a few years ago, when I moved out after 18 months, the landlord deducted €150 from my deposit to cover refuse collection, which he said he'd paid in the management fees - but it was my expense to pay).

Is a month's rent in advance and another month's rent for the deposit, standard practise?
Does anyone charge a month and a half's rent as a deposit - just to cover themselves in case the tenant ups and leaves at the end of the month, giving no notice and there are repairs beyond normal wear and tear to pay for?

With regards to submitting the tax return each year:
Can you claim the PRTB as an allowable expense?
I see that the NPPR is open to interpretation as to whether it can be claimed as an allowable expense - the Revenue have given "guidelines" that it can not, however as far as I know, there is nothing set down legally preventing me from claiming it, so I intend to claim it.
I have not paid the household charge and am not planning to - has any landlord paid the NPPR but not the household charge and have you received any letters pertaining to this yet?

With regards to capital allowances:
Say I have a dishwasher in the apartment that I am claiming 12.5% depreciation on each year - and this breaks. I buy a new dishwasher costing €300. Do I claim this €300 as an expense for that year and then continue to depreciate it at 12.5% for the next 8 years?
Or can I only do one or the other? i.e. either claim the €300 as an expense as a once off, or don't and depreciate the €300 over the next 8 years?

I'd be really grateful if anyone can help answer these questions. I've been reading up on irishlandlord.com and on boards as well trying to get as much info as possible so that I can be as prepared as I can be. But just not too sure on these few things...

Thanks!

cookie1977

Answered in red

Funnyonion79 wrote: »

Hi, I'm planning to rent out my apartment for the first time and have a few questions that I hope some experienced boardsie landlords can answer for me:

Landlord Insurance:
The apartment itself is insured under a block policy and included in my yearly management fees.
When I'm insuring the contents of the apartment (i.e. my own furniture, as I'm letting the apartment as furnished), do I get landlord's insurance seperately? Or can you get landlord/contents insurance?
Roughly what should I be looking to pay per year? Just a ballpark...
I've an apartment rented out and I have landlord contents cover with AXA insurance and I pay 150euro for 20,000 contents.

Should I notify the management company that I'm taking out landlord's insurance i.e. does this affect the block policy?
Notify them to divert all mail to your new location and contact details but no need to tell them about insurance. They wont care.

I'm going to manage the property myself as I keep reading and hearing only bad reports about letting agents.
Where are the best places to advertise for tenants? Daft?
Any advice when placing an ad?
Similar properties are renting for between 1000 - 1200 per month in my area - should I pitch the rent at 1200 to start off with and then lower it, if I get no responses? Or should I pitch my rent at 1100 from the get go?
Price according to similar properties in the area and what you'd be happy with. We always price slightly under the average so we get the property rented quickly. We're happy with this policy

I pay management fees every year and these include refuse collection?
Can I charge my tenant the price of the refuse collection each year?
Do people do this? (Only reason I ask, is because when I was renting an apartment a few years ago, when I moved out after 18 months, the landlord deducted €150 from my deposit to cover refuse collection, which he said he'd paid in the management fees - but it was my expense to pay).
I pay management fees and refuse fees are part of them but we dont charge our tenents this (and never will).

Is a month's rent in advance and another month's rent for the deposit, standard practise? Does anyone charge a month and a half's rent as a deposit - just to cover themselves in case the tenant ups and leaves at the end of the month, giving no notice and there are repairs beyond normal wear and tear to pay for?
We charge 1months rent and depost (so twon months rent) when they move in. We give back the deposit unless there's brekages or damage outside of normal wear and tear or they break the lease. Although we've had tenents move out in the middle of a lease because they lost their jobs but we did not charge them the deposit as we got people in to replace them quickly enough.


With regards to submitting the tax return each year:
Can you claim the PRTB as an allowable expense? Yes http://www.rentalincome.ie/prtb-faq-help/

I see that the NPPR is open to interpretation as to whether it can be claimed as an allowable expense - the Revenue have given "guidelines" that it can not, however as far as I know, there is nothing set down legally preventing me from claiming it, so I intend to claim it. NPPR is not an allowable cost http://www.taxireland.ie/taxadvice/35760.aspx

I have not paid the household charge and am not planning to - has any landlord paid the NPPR but not the household charge and have you received any letters pertaining to this yet?
Yes we have paid it as there are penalties for not and they are accumulating until you do. In the future you may not be able to claim tax back if they see that you're not paying it

With regards to capital allowances:
Say I have a dishwasher in the apartment that I am claiming 12.5% depreciation on each year - and this breaks. I buy a new dishwasher costing €300. Do I claim this €300 as an expense for that year and then continue to depreciate it at 12.5% for the next 8 years?
Or can I only do one or the other? i.e. either claim the €300 as an expense as a once off, or don't and depreciate the €300 over the next 8 years?
My wife's better at this one so I'll post back later about it

I'd be really grateful if anyone can help answer these questions. I've been reading up on irishlandlord.com and on boards as well trying to get as much info as possible so that I can be as prepared as I can be. But just not too sure on these few things...

Thanks!

Funnyonion79

Great stuff Cookie - thanks so much for your replies!

murphaph

Say I have a dishwasher in the apartment that I am claiming 12.5% depreciation on each year - and this breaks. I buy a new dishwasher costing €300. Do I claim this €300 as an expense for that year and then continue to depreciate it at 12.5% for the next 8 years?
Or can I only do one or the other? i.e. either claim the €300 as an expense as a once off, or don't and depreciate the €300 over the next 8 years?

You can't have both-it'll be either claim it as an expense in the current tax year completely (ie, reduce yoour taxable income by €300) OR depreciate 12.5% of it for the follwong 8 years. You can't do both as you only bought it once!

The threshold at which point an item becomes a capital expense can be hazy. If you can, you're better off claiming the full cost in any year as inflation will obviously reduce the benefit (in 8 years that 12.5% will be woth less than 12.5% today).

You wouldn't get away with claiming an extension as a repair for example-that would certainly be considered a capital expense, to be depreciated over 8 years. A dishwsher, I'd put it through as a one off, ie not depreciate it.

Funnyonion79

murphaph wrote: »

Say I have a dishwasher in the apartment that I am claiming 12.5% depreciation on each year - and this breaks. I buy a new dishwasher costing €300. Do I claim this €300 as an expense for that year and then continue to depreciate it at 12.5% for the next 8 years?
Or can I only do one or the other? i.e. either claim the €300 as an expense as a once off, or don't and depreciate the €300 over the next 8 years?

You can't have both-it'll be either claim it as an expense in the current tax year completely (ie, reduce yoour taxable income by €300) OR depreciate 12.5% of it for the follwong 8 years. You can't do both as you only bought it once!

The threshold at which point an item becomes a capital expense can be hazy. If you can, you're better off claiming the full cost in any year as inflation will obviously reduce the benefit (in 8 years that 12.5% will be woth less than 12.5% today).

You wouldn't get away with claiming an extension as a repair for example-that would certainly be considered a capital expense, to be depreciated over 8 years. A dishwsher, I'd put it through as a one off, ie not depreciate it.

Yes that makes sense alright Murph - thanks for clarifying.

Funnyonion79

Just a few more questions guys:

I was planning to manage the rental myself and not use an agent but I just found out that the couple below us have moved out and have rented their apartment through an agent, as they know the guy working there. They appear to have gotten a really good rental price for their smaller apartment and decent tenants (as far as we can tell).

How do letting agents work? Are they expensive? If they're not working well for you, can you get rid of them without incurring extra costs? I'm totally clueless about them.

Also, does everyone use an accountant for their annual tax return or is it possible to work out the tax owed yourself? I used to know how to calculate it but since the USC came in etc, I wouldn't have a notion now.

Thx!

NIMAN

Agents normally take approx 10% per month fee.

I am about to do my 1st tax return for rental income, and I will be using an accountant tbh. I have read that its easy enough to do a return yourself online, but I want to make sure its done right the 1st time, and afaik the cost of the accountant is tax deductible as an expense.

cookie1977

We manage the property ourselves but use a rental agency to rent it out (we dont have the time to be taking calls and showing people around). The last one we used charge 4% plus VAT for getting us tenants and checking them out, then signing them up) which we thought was reasonable. We live reasonable close to our apt so it's easy enough to manage. Personally I think most agents dont do enough to charge for managing a property so unless you live miles away or out of the country I think you're better off managing it yourself.

NIMAN

I have managed my own property for 18 months now with no bother, but to be fair I have a great tenant. If I had a bad one, I probably would think that 10% every month for an agent to deal with them would be worth paying.

Funnyonion79

Thanks Niman and Cookie.

On balance, I think I would like to manage the place myself so that I can keep some control over any problems that crop up. As in, if I get good tenants, I want to be able to keep them and don't want them getting pissed off if an agent isn't getting back to them etc.

However I didn't know you could hire a letting agent, just to source tenants. This definitely may be something I'll investigate.

Thanks again.

markpb

I let my apartment out a year ago and hired an agent right from the start. I paid c. €400 finding fee and c. €400 for a years management (the rent is €825 pm). The main reason I hired him was to make sure my tenants got a good service. If I was on holidays or busy with work, I want them to have someone they can contact all the time and someone who can sort out any problems without waiting for me. Of course, it's only an advantage if you find a good agent. My tenants renewed their lease for another year so I guess they're happy

Funnyonion79

Hi - another question for you:

Say I got a tenant in on a fixed term 12 month lease and they broke the lease before the 12 months were up. I'm under no obligation to return the deposit, because they have broken the terms of the lease - yes?

However, ideally - once they've given me a month's notice and I'm able to get tenants in to replace them, I'd have no problems returning their deposit. My question is - since I'd be doing them a favour, returning their deposit in the first place - am I allowed to deduct the cost of a new ad on Daft and the new PRTB registration from their deposit? I think this seems fair enough...?

Would this be common practice?

cookie1977

Funnyonion79 wrote: »

Hi - another question for you:

Say I got a tenant in on a fixed term 12 month lease and they broke the lease before the 12 months were up. I'm under no obligation to return the deposit, because they have broken the terms of the lease - yes?

Yes that's correct.

However, ideally - once they've given me a month's notice and I'm able to get tenants in to replace them, I'd have no problems returning their deposit. My question is - since I'd be doing them a favour, returning their deposit in the first place - am I allowed to deduct the cost of a new ad on Daft and the new PRTB registration from their deposit? I think this seems fair enough...?

Seems fair but the one time it happened to us we refunded the full deposit.

Would this be common practice?

Not sure it it's common practice or not.

Funnyonion79

cookie1977 wrote: »

Not sure it it's common practice or not.

Thanks as always Cookie!

racer1

Hey i will be renting out my apt in Dublin in the new year as we are leaving the country. I will be looking for an agent to manage the property. Does anyone know any good agents who don't charge 10%? Trying to get my head around everything involved from losing my interest relief to tax issues.

ccull123

cookie1977 wrote: »

Answered in red

hi there,

In the process of looking into landlord insurance. Can someone tell me when I get it do they notify my bank automatically??