Checklist for prospective landlord

DamoKen

Hi All, I'm going to be renting my house out within the next month (hopefully).

Firstly not planning on using an agency as I'll still be within commuting distance so plan to manage to property myself.

I haven't rented out in a number of years, and the first experience was a short and painful introduction. Anyway not sure what if anything has changed legally or standards wise so would really appreciate if people could point out what if anything I'm missing

PTRB Registration

Landlord liability insurance

Household Charge (if not paid)

Furnishings : Not really sure on this one. My girlfriend who has a property in London said if I rent with any electrical appliances such as toaster, kettle etc in London at least you must have them regularly checked by a qualified electrician. Doesn't apply to white goods. Is this now the case in Ireland? Also been years since I last rented myself in Ireland so not sure what is expected to provided in the kitchen. Fridge, cooker and washing machine obviously. What else is considered standard? The last place I rented in Dublin waay back even though it was furnished to a very high standard came with no crockery, cutlery etc. Thought that was a bit scabby at the time but would that be the norm now?

Informing Revenue : As I wouldn't expect to make any profit from renting my home is the rent that just covers the mortgage subject to tax?

Finally I looked at the RAS years ago during it's inception but never went any further. Anyone with any experience good or bad would really appreciate your thoughts on going with this

Bit of a short list so I'm sure there's some glaring omissions! Any advice more than welcome.

Thanks!

athtrasna

DamoKen wrote: »

Informing Revenue : As I wouldn't expect to make any profit from renting my home is the rent that just covers the mortgage subject to tax?

Tax is payable on income less allowable deductions (such as 75% of mortgage interest and wear and tear on fixtures and fittings, and letting expenses) regardless of whether or not a "profit is made". If the income exceeds the deductions, then tax is payable on that regardless of whether or not your mortgage is covered.

There are a lot of checklists and more information on irishlandlord.com

Pkiernan

You also need to pay the NPPR tax - non principal primary residence tax, which is €200 p.a.

Regarding the tax situation, if for example you get 10k over year in rent, the Revenue will treat that 10k as fully taxable for PAYE, PRSI, USC etc.

Up to 75% of the mortgage interest can be deducted from this income. If you paid 4k in interest, then you could deduct 3k from the 10k and have an income of an additional 7k to any other income you may have (your job for example).

Imagine you earn 50k per year at your job. You will now be taxed as if you earned 57k per year.

You can also deduct the cost of insurance, repairs and any management fees.


Contrary to what people think at fist, you are actually making a profit, as someone other than you is paying for the home you will eventually own outright.


I wish you all the best - it's not easy being a LL at the moment.

NIMAN

I found www.irishlandlord.com a very useful website when I became a LL for the 1st time.

Goodne

You will also need to get a BER cert for the house and get the boiler (if you have one) serviced

DamoKen

Hi guys, thanks for all the replies and links, some very useful info.

Had my boiler serviced two months ago so should be fine there, didn't know about the BER cert or NPPR tax however so thanks for the heads up.

Had a look at the landlord website, seems very comprehensive so thanks again for that.

Just a question on furnishings though. The landlord.com site is a bit vague on this. It just says from what I could find that a well furnished property will be easier to let than a badly furnished property. Doesn't really define what would be considered well furnished though. Don't want to skimp on furnishings but at the same time I don't want to overdo it with unnecessary stuff and then be bound to replace if they're broken.

Bedrooms : should bedside lockers and lamps be included? Each room has an integrated wardrobe. In the master bedroom there are two integrated wardrobes. Should chest of drawers be also included in each room or would this be unnecessary?

Kitchen : White goods would be washing machine, fridgefreezer and cooker. What else would be considered standard? Kettle, toaster, microwave?? Would crokery/cuterly also be standard?

Misc: Obviously if you want your property keep in a reasonable state it helps if you provide some equipment for doing so. I'd imagine a vacuum cleaner, brooms etc would also be standard? Ironing board? Anything else?

Thanks again

NIMAN

I rented my house without a BER Cert being done. I suppose if your tenant doesn't care about one, you will get your place rented without it.

If you go through an agency to handle the renting of it, then they might ask for one.

Funnyonion79

Hi, I'm going to rent out my place and will provide a small amount of crockery and cutlery - you can buy a 16 piece cutlery set in Heatons for a fiver (4 knives, 4 forks, 4 teaspoons, 4 desert spoons).

Also think a hoover and an ironing board are a good idea to provide. I'm going to leave fridge freezer, washing machine, dishwasher, microwave, kettle and toaster, but lots of places I rented before didn't have a kettle, toaster or crockery, so I suppose it's up to you....

I also have built in wardrobes so am not supplying a chest of drawers however I'll try and pick up a cheap beside locker and a lamp just to make the room look better. Again, previous places I rented, didn't have these items so it's up to you what you decide.

Goodne

You need a BER cert to register with the PRTB. Have a look at daft.ie or similar to see other properties to rent in your area so you know your competition

NIMAN

Goodne wrote: »

You need a BER cert to register with the PRTB. Have a look at daft.ie or similar to see other properties to rent in your area so you know your competition

My rental property is registered with the PRTB and I have never had a BER Cert done, so thats not right.

NIMAN

NIMAN wrote: »

My rental property is registered with the PRTB and I have never had a BER Cert done, so thats not right.

There's now a box to tick, you don't need to prove you have the cert but the question is asked.

Goodne

ok sorry about that so; when I first registered with them I had to send in a copy of the cert it must have changed since then

odds_on

NIMAN wrote: »

My rental property is registered with the PRTB and I have never had a BER Cert done, so thats not right.

A valid current BER Cert (lasts 10 years) is required when a property "is offered for sale or rent". Because you do not have one is not an issue with the PRTB (at the moment). If a property owner does not have one when required, he may be fined up 5,000 euros on conviction. If a landlord wants to pick and choose by which laws he will abide why should a tenant not do the same???

Renting laws are quite different between Ireland and England, therefore do not rely on your English knowledge of renting.

OP, I suggest that you download a copy of the Residential Tenancies Act 2004 and read and understand it, as well as the differences between a Fixed Term lease and a Part 4 lease. After 6 months in the property, a tenant has the right to remain for a further 3.5 years, without signing a new lease.

Also the Housing (Standards for Rented Houses) Regulations 2008 and the amendment 2009.

Also check out the PRTB site which has many relevant documents describing renting in Ireland.

NIMAN

tbh, I do not remember anything about a BER Cert being mandatory when I was registering. I am no dodger when it comes to rules and regulations, I thought I had done everything else as per the rules, and if it was made clear I had to have a BER Cert I would have got one. It must not have been mentioned.

I didn't meant to come across as a chancer.

odds_on

NIMAN wrote: »

tbh, I do not remember anything about a BER Cert being mandatory when I was registering. I am no dodger when it comes to rules and regulations, I thought I had done everything else as per the rules, and if it was made clear I had to have a BER Cert I would have got one. It must not have been mentioned.

I didn't meant to come across as a chancer.

I wasn't accusing you of being a chancer but suggesting that any landlord who does not have a valid BER Cert (and therefore renting without full compliance of the law) should not complain too loudly when a tenant has a complaint with the property. Although many consider a BER not to be worth the paper it is written on, IMO, it does give an indication as to how much it may cost to heat a property. Furthermore, a BER cert last for up to 10 years (unless substantial changes are made) and a good rating should give a property a better market value. If you can get just an extra 10 euros a month for a better rating, you have nearly paid the cost of a cert in the first year and the subsequent years are all extra profit.

A BER Cert is not mandatory as regards the PRTB. Just in the same way that the Housing Standards for rented property is cited in different legislation to the RTA 2004 and the PRTB do not consider that legislation when registering a tenancy though they do required to be informed if the property is "Furnished", by a check box.

BER comes under the S.I. No. 666 of 2006, European Communities (Energy Performance of Buildings) Regulations 2006 where it states:

(2) A person who offers for sale or letting (whether in writing or otherwise)—
(a) a building of a class referred to in subparagraph (a) or (b) of paragraph (4) construction of which commences on or after such date specified for that class in the said subparagraphs, hereinafter referred to as a ‘new building’, or
(b) on or after 1 January 2009, a building that is in existence on or before 1 January 2009,
and any agent acting on behalf of such person in connection with such offering, shall produce a printed copy of the BER certificate and advisory report in relation to the building to any person expressing an interest in purchasing or taking a letting of the building and, on demand, to the building control authority in whose functional area the building is situated.

flyguy

DamoKen wrote: »

Hi All, I'm going to be renting my house out within the next month (hopefully).

Bit of a short list so I'm sure there's some glaring omissions! Any advice more than welcome.

Thanks!

I'm assuming your gonna rent out the house you were living in yourself? In that case you should -but you might not want to for obvious reasons- inform your mortgage supplier. You got LL insurance, does this replace your home insurance? If not they need to be informed as well...

Gautama

If you've received any "deal" on stamp duty, mortgage interest relief, etc, from Revenue, you may be liable for clawback and/or changes.

DamoKen

Hi guys, thanks for all the replies since I was last on the thread and sorry for not replying sooner, no internet access the last few days.

Quick question for Flyguy concerning informing your mortgage provider. This again is drawing on my knowledge of renting in England so not sure if it applies here.

My girlfriend was like me on a tracker in London but when she moved home and rented her place out she had to inform her provider. This for some reason or another meant she could no longer avail of the tracker and her mortgage increased significantly as a result.

As I said, not sure of the reasoning behind the change and why they could do it but could the same happen here?

Thanks again for all the help

Mickey Dazzler

DamoKen wrote: »

Hi guys, thanks for all the replies since I was last on the thread and sorry for not replying sooner, no internet access the last few days.

Quick question for Flyguy concerning informing your mortgage provider. This again is drawing on my knowledge of renting in England so not sure if it applies here.

My girlfriend was like me on a tracker in London but when she moved home and rented her place out she had to inform her provider. This for some reason or another meant she could no longer avail of the tracker and her mortgage increased significantly as a result.

As I said, not sure of the reasoning behind the change and why they could do it but could the same happen here?

Thanks again for all the help

Do not tell your mortgage provider that you will be renting as they will force you off the tracker. They are looking for any excuse to get people off trackers.

If you don't tell the bank it won't make a difference. If you do tell them your mortgage repayments will shoot up.

Even if you get found out, which you won't, they cant claw back any money.

I was in the same situation as you and mentioned it to my bank and the manager looked at me said under his breath... "We don't need to know that". Trust me, you'll be grand.

Gautama

How can you be sure that they won't find out? If you've got no other relationship with them you might get away with it. But if you've got a current account, credit card, etc, then you won't be able to update the address without them knowing. Unless you come to an agreement with the tenants to hand over all mail, such as statements, new cards, etc.

Your insurance may also become invalid as you are are no longer an owner-occupier and it's a let property instead.
Ditto with that other insurance-like thing.

Also, your mortgage interest relief will be different, as you are no longer an owner-occupier and it's a let property instead. Sure, say nothing to the Revenue in the short term, but when it comes to selling or inheriting the property you'll be liable for fines, penalties, etc.

I'm in a similar boat, but am coming to realise that not telling the bank may not be so easy. I'm just hoping to get away with it for as long as I can.

I briefly spoke to a financial advisor on this. He told me to look at the loan agreement, specifically as to whether the mortgage is for "owner-occupier" only.

Gautama

I've been browsing around this site for some further information.
If you change your insurance from owner-occupier to rental property, the insurance company will notify the lender.
Of course, if you don't change your insurance, then you won't actually be insured at all. In which case, if something goes wrong, you won't be covered and you'll have to stump up.

Are you with BOI? Read the second paragraph:
http://www.life4less.ie/blog/?p=1166

Mickey Dazzler

Gautama wrote: »

I've been browsing around this site for some further information.
If you change your insurance from owner-occupier to rental property, the insurance company will notify the lender.
Of course, if you don't change your insurance, then you won't actually be insured at all. In which case, if something goes wrong, you won't be covered and you'll have to stump up.

Are you with BOI? Read the second paragraph:
http://www.life4less.ie/blog/?p=1166

Utter nonsense.

All you have to do is cancel your current insurance policy then call up a new insurance company and start a new landlord insurance policy. I did this and they didn't even ask if I had a mortgage.

sunnysoutheast

Mickey Dazzler wrote: »

Gautama wrote: »

I've been browsing around this site for some further information.
If you change your insurance from owner-occupier to rental property, the insurance company will notify the lender.
Of course, if you don't ch insurance, then you won't actually be insured at all. In which case, if something goes wrong, you won't be covered and you'll have to stump up.

Are you with BOI? Read the second paragraph:
http://www.life4less.ie/blog/?p=1166

Utter nonsense.

All you have to do is cancel your current insurance policy then call up a new insurance company and start a new landlord insurance policy. I did this and they didn't even ask if I had a mortgage.

If the bank is noted as having an interest in the policy they will be informed when it is cancelled. Sounds like your bank (if you have one) is/was not noted correctly on the original insurance.

DamoKen

Hi guys, from what I've read on this thread and through links helpfully provided when I add up the rental income tax, ptrb, ber cert, non primary residental tax AND the possibility of losing my tracker I might actually be better off just renting a room instead.

The taxation plus other charges will almost bring it down to what I would get if I was to do a house share which I did when I first bought. That is if I read it correctly and taxation is at 41%?

When all charges/taxes are added up as well as the worry that I may at some point lose my tracker the conclusion is that I'm better off keeping it as my primary residence.

I'm not buying a new home so there would be no complications there. In fact I would if at all possible prefer to sell rather than rent but that as with many homes is not a viable option at the moment.

Anyway I digress. Benefits from what I can see in renting a room rather than the house in it's entirety are as follows and please if I'm wrong on any of the assumptions below please let me know.

Advantages for me :

No change in mortgage rate
No change in insurance
No taxation on rental income as it's still my primary residence
No Ber cert necessary
No NPRT necessary
No PTRB registration necessary
I still have legal access rights to the house and can come and go as I please.
Place to stay every second weekend when out visiting family.
No worries about damage to house.

Disadvantages for me :

Not renting full house means less rental income. However when all other considerations mentioned above are taken into account the difference if I manage to rent one double room for at the higher end comes to less than 100 euro a year. That's not counting losing my tracker.

Advantages for prospective tenant :

Although renting a room in effect for most of the month bar a night or two at weekends they get a very highly specced and recently renovated house for a lot less than the going rate.

So any thoughts on this as an option? Pro's/Cons that I haven't thought of?

Thanks again, this has been a very helpful thread and really appreciate all the input!

Gautama

I've moved out of my gaff and am finishing it off before renting it out. Will be putting it on the rental market next month.
From my current perspective, if I lose no more than €100 a month on average, I'll be happy.
I've two friends, one Dublin NS (emigrated) and one Dublin SS (growing family) that are losing €200 a month.

Note, by "losing" I mean the mortgage repayment exceeds the rental income.

I remember that during the "boom" days the economist Jill Kirby repeatedly advising against buy-to-let, that the average income was only 2 - 3 %. I'd tear the arm off someone that'd offer me that now!
I think that, in the short term, if the property is mortgaged that being a landlord is an not earner.

The only reason I'm taking this route is that to sell it I'd need about €100k in cash, living in Dublin is far from desirable anymore, and renting is the only option I can think of. When I'm a pensioner I should have some wiggle room and hopefully some sort of a nest egg. At least property is tangible. Can't say that about shares or a pension.

Gautama

Mickey Dazzler wrote: »

Utter nonsense.

All you have to do is cancel your current insurance policy then call up a new insurance company and start a new landlord insurance policy. I did this and they didn't even ask if I had a mortgage.

What bank are you with, is it BoSI? I reckon they don't care and are happy to have anything coming in.

athtrasna

DamoKen wrote: »

No taxation on rental income as it's still my primary residence
....
I still have legal access rights to the house and can come and go as I please.
Place to stay every second weekend when out visiting family.
No worries about damage to house.

http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html gives you a lot of the information, including that the property must be occupied by you. Your post suggests you do not plan to occupy the house on a full time basis which is potentially tax fraud. Chances of being caught are probably small, but potential penalties aren't.


http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-32.pdf?download=true is the official Revenue information and gives more information on residency in the property.

As for no worries about damage to your house? A tenant has the house to themselves for the majority of the month...all it takes is one party to trash the place. Tenants may also be disingenuous about the number of people in the property if they are sure when you won't be around - could be a nice little earner.