Renting out an apartment (Correctly)

Bepolite

Kudos on the resources I hadn't checked them before and there is lots there. I couldn't find what I was looking for though so I wondered if you kind folks might point me in the right direction.

In relation to renting out an apartment what does one need to consider/do. I'm aware of the minimum standards and PRTB registration but do you need to employ an accountant or can the return and write offs be done yourself?

What can you write off on tax? Is it worth making improvments to the property and then writing them off on tax? Will writing off mortgage tax interest effect TRS/tracker mortgage*.

Where is a good place to read up on all of this?

Should a solicitor be engaged to draft the lease or will a decent rental agency do this?

Thanks in advance.

*Okay so you caught me - I'm not doing it *That* correctly!

Citizenpain

For Tax look at
http://www.revenue.ie/en/tax/it/rental-income.html

Will writing off mortgage tax interest effect TRS/tracker mortgage?

You dont have a choice - you ca not claim TRS if its not your Princiipal Private Residance

For impact on your tracker check your mortgage agreement - you might be able to keep it

There is a separate Taxation forum on boards as well - you might get more info there

johnnyskeleton

Bepolite wrote: »

In relation to renting out an apartment what does one need to consider/do. I'm aware of the minimum standards and PRTB registration but do you need to employ an accountant or can the return and write offs be done yourself?

Insurance as well, check the potential tenant's references thoroughly (or get a letting agent to do so for you for a fee), make sure that all furniture is sturdy and reasonably priced, be prepared to take away furniture if not required, take an inventory of all items being given with the property and photos of same.

In terms of accounts, you can do your own taxes or get an accountant. Doing them yourself is cheaper but you have to make sure they are correct (and remember that not all mortgage interest is deductable) or face civil/criminal sanctions. Accountants often give peace of mind that everything was done correctly and above board.

What can you write off on tax? Is it worth making improvments to the property and then writing them off on tax? Will writing off mortgage tax interest effect TRS/tracker mortgage*.

Expenses reasonably and legitimately incurred, with some statutory exceptions, such as (I think) a max of 75% of mortgage interest can be claimed. Probably best to get an accountant to look at this.

It is worth making improvements if they add value to the property or they have to be done to make the place habitable. If it costs €2000 to increase the rent by €200 per month, then it is well worth it, but not (IMO) if €100k worth of improvements will not make the place more attractive.

You are usually obliged to tell your lender when you are no longer living in the property, and they may well move you from a tracker to a BTL variable, so there would be a significant jump. Likewise, not only does TRS cease to be payable because it is not a PPR, but there can also be a clawback. There could also be a clawback on stamp duty but I think the ship has sailed on that one!

Where is a good place to read up on all of this?

To be honest, if in doubt get professional accountants and letting agents to help you. What you read on the internet, including this post, can only be taken as general opinion and not legal or taxation advice.

Citizensinformation.ie is a good source, but general googling will do.

Should a solicitor be engaged to draft the lease or will a decent rental agency do this?

Unless it is a particularly complex lease, a rental agency should do it. Again, if in doubt it is worth engaging them to assist you.

Santa Cruz

Check out Irishlandlord.com It's full of useful tips.

Three bits of advice
1.Keep a receipt for everything you buy for the apartment down to a can of paint as they all can be written off against tax.
2. If letting for first time it may be best to use an accountant. A good one will minimise your tax liability, their rates are not too expensive and it is an allowable cost
3. You are running a business. Keep it that way with the tenants. Be friendly but remember that you are providing a service and they are customers not friends. Minimise costs while maintaining the standard of the accommodation