Pitfalls - letting house to tenants

ElecKtrA

Hi guys,

I've a semi detached four bedroom house that is well located in Cork City. I want to take a year out (possibly longer/shorter) to travel and work abroad before the summer.

The thing is, I can't make up my mind between letting the house out (to a couple/family) and renting it to a few different professionals. Obviously, I would like to make as much revenue as I can from letting the house out but at the same time, I don't want to be tied down to a contract. If I had to return to Ireland sooner than expected then I would like the flexibility to give a few weeks notice to the tenant and return to my house.

I've been looking into getting a management agency to oversee everything that would come with letting/renting the house/rooms out. I would have no problem paying for a good company to keep any issues that may arise at bay.

I'm really just asking for some advice/suggestions - I know there would be no problem finding a potential tenant (s) to vacate my house while I am gone.

newacc2015

IMO families are not what you want as a tenant. Landlords rarely have a good thing to say about a family in their house. A family generally treats a rented property as their home, which they should be entitled to. But wrecking paint work with crayons, damaging wood work with toys, damaging plaster work with posters etc is completely unacceptable but the norm with families. Look at all the emotional posts on boards from families versus post from professionals. There is considerable more from families than professionals, even though there is far more professionals renting.

Whereas professionals do less wear and tear on the house. If they are working 9-5 they are rarely in the house. If they continental European like Germans, they tend to be gone for any holidays like Christmas or long weekend. IMO wear and tear from educated professionals is minimal.

Estate agencies can be a bit useless with renting and managing houses. They will generally underprice the house to get it let. They wont be as selective as you would be renting the house yourself. Getting an agent is generally for a peace of mind and not because they can do a better job than yourself. The only benefit is that they can be "collection agent" for tax purposes. But I imagine you could get an accountant/friend to do that for you.

Ken.

If I was you and the chances of coming back after less than a year out-weighed longer by even 1% I'd go with rent out 3 rooms and keep one for yourself. If you came back in less than a year and had someone in there on a year lease you'd end up having to rent yourself.

ElecKtrA

ken wrote: »

If I was you and the chances of coming back after less than a year out-weighed longer by even 1% I'd go with rent out 3 rooms and keep one for yourself. If you came back in less than a year and had someone in there on a year lease you'd end up having to rent yourself.

Thanks Ken, yes I think that would be the ideal option for me. I believe that if I keep a room for myself then at least I will have a place to return to and it may be easier to get out the tenants as well, as oppose to letting it out to a family!

Would you think it's a good idea to get a Property Management Company involved? I could source the tenants myself and advise the rooms but if I'm half way across the globe and there are issues arising then I would probably find it difficult to try and resolve whilst on my travels!

Any other opinions or suggestions that you may have then I would be happy to hear. Thanks again!

Cuddlesworth

ElecKtrA wrote: »

Thanks Ken, yes I think that would be the ideal option for me. I believe that if I keep a room for myself then at least I will have a place to return to and it may be easier to get out the tenants as well, as oppose to letting it out to a family!

Would you think it's a good idea to get a Property Management Company involved? I could source the tenants myself and advise the rooms but if I'm half way across the globe and there are issues arising then I would probably find it difficult to try and resolve whilst on my travels!

Any other opinions or suggestions that you may have then I would be happy to hear. Thanks again!

As said above, most property management agents are pretty useless in Ireland. They take their yearly fee's and ignore most of the problems.

If you are going to do this, I would get the tenants in while you are still there. And get a family member to go into the house once or twice a month to check it. Pay a cleaner to clean the common areas since your personally invested in the property.

If you are going travelling the house will still be your primary residence so you may well be able to rent rooms under the rent a room scheme thus tax free up to 12k and no rights for the people who rent the rooms so they can be asked to leave when ever you want.

ElecKtrA

Ephraim Crooked Stockpile wrote: »

If you are going travelling the house will still be your primary residence so you may well be able to rent rooms under the rent a room scheme thus tax free up to 12k and no rights for the people who rent the rooms so they can be asked to leave when ever you want.

Yes, that is what I was hoping - do you think I am eligible then? Once again I don't know how long I would be travelling for - I do have a working holiday Visa for Australia so I may well use that.

ElecKtrA

Cuddlesworth wrote: »

As said above, most property management agents are pretty useless in Ireland. They take their yearly fee's and ignore most of the problems.

If you are going to do this, I would get the tenants in while you are still there. And get a family member to go into the house once or twice a month to check it. Pay a cleaner to clean the common areas since your personally invested in the property.

Yes, that is something that I have considered. My parents don't live more than an hour away from me, so that is very feasible but I still would not feel very comfortable asking them to take responsibility for anything that needs sorting out (no doubt they would oblige though).

Mrs OBumble

While relative/friends say they're willing to help, that may change if they have to evict a non-paying or anti-socially-behaving tenant. Or even if there's a major repairs that need to be organised. And trying to do either of these yourself from overseas would be a nightmare.

I'd suggest looking for a professional property management company: not an estate agent that does PM as a sideline and earns most of their money from sales, but one that specialises in PM. Some are better than others, so do ask around.

Re claiming that the place is still you primary residence: be careful, I don't know that you can be both not-tax-resident Ireland and have a primary residence. Especially if you can manage to be not-tax-resident in the places you are visiting (for at least one of the years), then this may be better for you.

Cuddlesworth

Mrs OBumble wrote: »

While relative/friends say they're willing to help, that may change if they have to evict a non-paying or anti-socially-behaving tenant. Or even if there's a major repairs that need to be organised. And trying to do either of these yourself from overseas would be a nightmare.

But very easy in a licensee arrangement to evict people.

Mrs OBumble wrote: »

I'd suggest looking for a professional property management company: not an estate agent that does PM as a sideline and earns most of their money from sales, but one that specialises in PM. Some are better than others, so do ask around.

Rare enough to find, for only a year I can't see it being worth even risking it.

ElecKtrA

Mrs OBumble wrote: »

While relative/friends say they're willing to help, that may change if they have to evict a non-paying or anti-socially-behaving tenant. Or even if there's a major repairs that need to be organised. And trying to do either of these yourself from overseas would be a nightmare.

I'd suggest looking for a professional property management company: not an estate agent that does PM as a sideline and earns most of their money from sales, but one that specialises in PM. Some are better than others, so do ask around.

Re claiming that the place is still you primary residence: be careful, I don't know that you can be both not-tax-resident Ireland and have a primary residence. Especially if you can manage to be not-tax-resident in the places you are visiting (for at least one of the years), then this may be better for you.

Thanks for your advice. I think if I can source the tenants myself and get an idea what kind of people they are and obviously ask for references from them then I would be willing to give them the benefit of the doubt and not get a PM agency involved (I know it would be a risk!).

With regards my rights on having tenants living in my house without me occupying it - I tried to find information on this but I can't find anything! May be I will fall into the tax exempt if money earned is less an 12,000 euro/annum?!