Renting Investment Properties

betterlife123

I just picked up the keys for my investment property this afternoon.

I intend to manage the letting myself - small house which will be let furnished.

Any tips or pitfalls I should avoid?

Bren157

Screen all interested tenants; get a reference off them, identify them via family address and PPS number, sign a lease, get a deposit, do not entertain rent allowance.

MammaZita

Bren157 wrote: »

Screen all interested tenants; get a reference off them, identify them via family address and PPS number, sign a lease, get a deposit, do not entertain rent allowance.

Why not entertain rent allowance? It's guaranteed into your bank account every month!

Bandara

MammaZita wrote: »

Why not entertain rent allowance? It's guaranteed into your bank account every month!

Yes it is

But your not guaranteed to still have a habitable apartment in a month.

ted1

Hammertime wrote: »

Yes it is

But your not guaranteed to still have a habitable apartment in a month.

That's pure nonsense, screen the tenant as you would any one else, there's no risk of the losing there job and not being able to pay.

MammaZita

Hammertime wrote: »

Yes it is

But your not guaranteed to still have a habitable apartment in a month.

As with any tenant.

The private tenant is only 1 months pay cheque away from the dole queue in these uncertain times. And is far more likely to move annually due to job changes, location, price sensitivity etc... The tenant on rent allowance is far more likely to view the property as a home, stay long term, with far less capital expenditure and improvements required on the landlords part, with the added bonus of guaranteed rent.

You should screen every tenant and check your property regularly, it goes without saying, irrespective of the tenant. The tenant on rent allowance has more to lose in fact as they can't just rent the next property they choose like the private tenant can.

Bren157

The big issue with rent allowance from my experience - once you have screened the tenant and taken correct action such as a lease, deposit , PPS number as I suggested above - is that dealing with Social Welfare is a nightmare. They change their benefits from RAS to Rent Allowance at will; do not pay the landlord as you might want - usually weekly whereas we like to get paid monthly as it is easier for tax mgt etc - and in any event, it is not much money. I get €23 weekly from rent allowance for a property I own. the actual rent is €550.00pm so it is of little value. If you go down the RAS route, you are giving your house to welfare for up to four years and they can put anyone they like into it. On balance, I suggest be patient, wait for the working tenant who shows a degree of maturity and you will be well-served in the longrun.

ted1

I get €950 from my tenant on Rent allowance, never had a problem.

MammaZita

Bren157 wrote: »

The big issue with rent allowance from my experience - once you have screened the tenant and taken correct action such as a lease, deposit , PPS number as I suggested above - is that dealing with Social Welfare is a nightmare. They change their benefits from RAS to Rent Allowance at will; do not pay the landlord as you might want - usually weekly whereas we like to get paid monthly as it is easier for tax mgt etc - and in any event, it is not much money. I get €23 weekly from rent allowance for a property I own. the actual rent is €550.00pm so it is of little value. If you go down the RAS route, you are giving your house to welfare for up to four years and they can put anyone they like into it. On balance, I suggest be patient, wait for the working tenant who shows a degree of maturity and you will be well-served in the longrun.

This is not my experience at all! We sign a form once a year for our tenant around lease renewal date and in 4 years the rent has been paid into our account on a monthly basis without a single issue.

Rent Allowance and RAS are two different things and at the moment have no interest in the latter as I am receiving market rent for my property (as the tenant tops up the Rent Allowsnce payment).

MammaZita

ted1 wrote: »

I get €950 from my tenant on Rent allowance, never had a problem.

Me neither

womandriver

MammaZita wrote: »

This is not my experience at all! We sign a form once a year for our tenant around lease renewal date and in 4 years the rent has been paid into our account on a monthly basis without a single issue.

Rent Allowance and RAS are two different things and at the moment have no interest in the latter as I am receiving market rent for my property (as the tenant tops up the Rent Allowsnce payment).

As in the tenant/you informed social welfare that the rent is at or below the limits for the area but it's not and the tenant is making up the difference?

You do know that's welfare fraud don't you?

MammaZita

womandriver wrote: »

As in the tenant/you informed social welfare that the rent is at or below the limits for the area but it's not and the tenant is making up the difference?

You do know that's welfare fraud don't you?

Absolutely not! The rent we charge exceeds social welfare limits for that area so our tenant makes up the balance. We confirm what we charge her annually to social welfare. Nothing fraudulent at all!

womandriver

MammaZita wrote: »

Absolutely not! The rent we charge exceeds social welfare limits for that area so our tenant makes up the balance. We confirm what we charge her annually to social welfare. Nothing fraudulent at all!

I'm open to correction on this but my understanding is that if the rent isn't at or below the limit for the area, rent allowance is not granted.

MammaZita

womandriver wrote: »

I'm open to correction on this but my understanding is that if the rent isn't at or below the limit for the area, rent allowance is not granted.

No, the limits relate to what social welfare will pay, but you're free to charge whatever rent you like. We advise the dept of social welfare every year in writing what we charge our tenant. They don't pay us the full amount- she provides the shortfall.

womandriver

MammaZita wrote: »

No, the limits relate to what social welfare will pay, but you're free to charge whatever rent you like. We advise the dept of social welfare every year in writing what we charge our tenant. They don't pay us the full amount- she provides the shortfall.

No, that's definitely not correct. If the rent is above the limit, zero rent allowance will be given (I believe there may be discretion used in exceptional circumstances) but that is the general rule.


From citizens info:

The rent paid to your landlord (that is, your contribution plus your Rent Supplement) must not be above the maximum rent limit set for your county or area. The maximum rent limit for your county is set by the Department of Social Protection (DSP). However, the Community Welfare Office may set lower rates within these limits. There is a maximum rent limit for each area (see below). If your actual rent is higher than the local maximum, you may be refused Rent Supplement entirely.
Cases where rent is over the relevant limit
In some cases Rent Supplement can be paid at the discretion of the DSP's representative (formerly known as the CWO) where the rent is over the relevant limit:
If you or a member of your household has special housing needs (for example, a disabled person in specially adapted accommodation).
If you will be able to pay the rent yourself within a short period, if, for example, if you are taking up employment. In this case Rent Supplement at a higher rate can be paid for a short period of 6-8 weeks.
If there are other exceptional circumstances.

MammaZita

womandriver wrote: »

No, that's definitely not correct. If the rent is above the limit, zero rent allowance will be given (I believe there may be discretion used in exceptional circumstances) but that is the general rule.

There must be plenty of exceptions then as I'm aware of several investors whose tenants top up their rent allowance.

womandriver

MammaZita wrote: »

There must be plenty of exceptions then as I'm aware of several investors whose tenants top up their rent allowance.

Are the social welfare aware of this too I wonder.....

MammaZita

womandriver wrote: »

Are the social welfare aware of this too I wonder.....

Of course they are! In order to qualify the tenant has to provide confirmation of the rent their paying- i.e. a copy of the signed lease and the landlord is required to complete a form detailing PPS number, rental amount etc.

Please do not come on here accusing me and others of fraud without knowing your facts.

womandriver

MammaZita wrote: »

Of course they are! In order to qualify the tenant has to provide confirmation of the rent their paying- i.e. a copy of the signed lease and the landlord is required to complete a form detailing PPS number, rental amount etc.

Please do not come on here accusing me and others of fraud without knowing your facts.

Oddly you don't seem to know the rent allowance rules which is concerning as you have a rent allowance tenant.

MammaZita

womandriver wrote: »

Oddly you don't seem to know the rent allowance rules which is concerning as you have a rent allowance tenant.

The rent allowance rules?? I'm not in receipt of rent allowance so why would the rules concern me?! My tenant provides me with a form, I complete it and get my rent. I don't concern myself with the intricacies of it- I'm just telling you that I charge market rent, my tenant is in receipt of rental allowance, tops it up and the department of social welfare are aware of this and have been for over 4 years.

womandriver

MammaZita wrote: »

The rent allowance rules?? I'm not in receipt of rent allowance so why would the rules concern me?! My tenant provides me with a form, I complete it and get my rent. I don't concern myself with the intricacies of it- I'm just telling you that I charge market rent, my tenant is in receipt of rental allowance, tops it up and the department of social welfare are aware of this and have been for over 4 years.

Ignorance is bliss let's hope we don't see you on the news...

MammaZita

womandriver wrote: »

Ignorance is bliss let's hope we don't see you on the news...

Whatever do you mean? You don't seem too blissful of your own ignorance that tenants can and do top up their RA.

I repeat my request that you stop accusing me of fraud.

womandriver

MammaZita wrote: »

Whatever do you mean? You don't seem too blissful of your own ignorance that tenants can and do top up their RA.

I repeat my request that you stop accusing me of fraud.

No problem. Whatever you say .

MammaZita

womandriver wrote: »

No problem. Whatever you say .

I suggest you look for a new tenant when their lease is up, as you seem very bitter that you're receiving substantially below market rent

womandriver

MammaZita wrote: »

I suggest you look for a new tenant when their lease is up, as you seem very bitter that you're receiving substantially below market rent

Lol don't have a tenant, nor an investment property. I do however have the ability to read the social welfare rules regarding rent allowance. Might do you no harm to do the same.

MammaZita

womandriver wrote: »

Lol don't have a tenant, nor an investment property. I do however have the ability to read the social welfare rules regarding rent allowance. Might do you no harm to do the same.

I will if and when I ever need to but thankfully for the time being all is good

womandriver

MammaZita wrote: »

I will if and when I ever need to but thankfully for the time being all is good

Good for you, no one likes to see their name in the paper these days

MammaZita

womandriver wrote: »

Good for you, no one likes to see their name in the paper these days

Why would my name be in the papers?

Peterdalkey

leaver ouh guys/girls!!!

ted1

womandriver wrote: »

Good for you, no one likes to see their name in the paper these days

In fairness your coming across quite bitter and making mad aqquastions.
Out tenant bought us forms , which we filled up shown rent payable , Pps number etc.
The council pay the rent I think she pays like 20 euro,

You seem to out if touch with how councils work. Out property is in the Dublin city area .

Bandara

It is completely against the rules of rent allowance to accept monies over the amount paid via the rent allowance, the tenant makes a calculated contribution towards the rent, but additional private payments between the tenant and the landlord are strictly prohibited and will result in the allowance being taken away immediately.

I would imagine that is what woman driver is trying to explain to you

ted1

Hammertime wrote: »

It is completely against the rules of rent allowance to accept monies over the amount paid via the rent allowance, the tenant makes a calculated contribution towards the rent, but additional private payments between the tenant and the landlord are strictly prohibited and will result in the allowance being taken away immediately.

I would imagine that is what woman driver is trying to explain to you

No one is hiding the payments, I tell the council that the rent is 950 and I recieve 950, how that rent is made up is none if my buisness.

Bandara

ted1 wrote: »

No one is hiding the payments, I tell the council that the rent is 950 and I recieve 950, how that rent is made up is none if my buisness.

My comment wasnt directed towards you.

BostonB

Hammertime wrote: »

It is completely against the rules of rent allowance to accept monies over the amount paid via the rent allowance, the tenant makes a calculated contribution towards the rent, but additional private payments between the tenant and the landlord are strictly prohibited and will result in the allowance being taken away immediately.

I would imagine that is what woman driver is trying to explain to you

I couldn't follow that at all. Isn't this what you mean?

Rent Allowance + tenant contribution = DSP defined Market Rate

But DSP market rate is not the same as the actual Market Rate. The rules of the RA mean the tenant can't top up the total above with a 2nd payment to bring it up to the actual market rate. So this below is not allowed.

Rent Allowance + tenant contribution + tenant topup = Actual Market

See here for an example.
http://www.askaboutmoney.com/showpost.php?p=1320210&postcount=1

Basically DSP are trying to control the market rate, by setting lower limits. Meanwhile LPT will eventually push the actual market rate up.

BostonB

MammaZita wrote: »

Why not entertain rent allowance? It's guaranteed into your bank account every month!

I don't think "guaranteed" means what you think it means. Guaranteed by whom exactly? Some authorities won't pay the LL directly. Theres always the possibility that a tenant will abuse the system and not pass the RA over. Leaving the LL out of pocket. What Guarantee then?

MammaZita

BostonB wrote: »

I don't think "guaranteed" means what you think it means. Guaranteed by whom exactly? Some authorities won't pay the LL directly. Theres always the possibility that a tenant will abuse the system and not pass the RA over. Leaving the LL out of pocket. What Guarantee then?

Don't know about other councils, but mine pays directly into my bank account, so on that basis is guaranteed. I know friends who receive cheques each month from their respective councils, so on that basis the rent is again guaranteed.

BostonB

Not all do unfortunately.

MammaZita

BostonB wrote: »

Not all do unfortunately.

It's a pity they don't as it would cut out this perceived risk in renting to tenants in receipt of rent allowance and cut down on the amount of landlord preferring to rent to private tenants on the black market for lower (undeclared) rents.

BostonB

Its another flaw in a deeply flawed process. There's nothing perceived about it.

Considering its paying below real market rates in some areas, will only make it even less attractive to landlords. Unless they are struggling to find tenants.

MammaZita

BostonB wrote: »

Its another flaw in a deeply flawed process. There's nothing perceived about it.

Considering its paying below real market rates in some areas, will only make it even less attractive to landlords. Unless they are struggling to find tenants.

Not necessarily. If the tenant is willing to pay some rent too, to bring the closer to market rents then there's no issue.

I've rented to both private and RA tenants and from a financial point of view much prefer the latter as the rent is guaranteed, they are much more likely to view the property as a home and stay longer term which means you're not re-advertising it and having to repaint it every year or even have it vacant.

I do agree that the system is totally flawed though!

BostonB

Isn't that the point? The tenant can't top it up. They risk being cut off if they do. Where do they fund the top up from, except to eat further into their dole. Putting them under further financial stress.

I think your idea of an increased sense of home is solely your personal experience. It certainly hasn't been mine.

MammaZita

BostonB wrote: »

Isn't that the point? The tenant can't top it up. They risk being cut off if they do. Where do they fund the top up from, except to eat further into their dole. Putting them under further financial stress.

I think your idea of an increased sense of home is solely your personal experience. It certainly hasn't been mine.

Well as I've stated above my tenant tops it up (from her dole and her lone parents payment) and SW and her CWO are aware of this. She obviously considers it worth the extra payment for a quality well maintained property, and neither SW nor the HSE have any issue with this.

Sorry to hear that hasn't been your experience, guess tenants differ but I would say that's irrespective of who pays their rent.

BostonB

I'd also add that my experience neither the dsp or hse would communicate with the landlord at all. Simple questions like what's the current backlog in setting up tenant they wouldn't answer.