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Renting our house

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  • 20-05-2016 2:25pm
    #1
    Whispered
    Registered Users Posts: 14,772 ✭✭✭✭


    We are thinking about putting our house, which we bought 9 years ago, to let. My husband has gotten a job offer in another part of the country (where rent would be a lot cheaper) and the journey would be about 2 hours each way. So we are thinking of renting our house out and renting a place closer to the new workplace. Obviously this isn't something we had foreseen, but we have to change with our circumstances. We are not in a position to sell due to negative equity.

    So, aside from the fact we wouldn't be able to charge in rent, what we pay on our mortgage, what other costs are associated with renting out your house? What should we think about? He has a few weeks to take the job or turn it down and even then he could travel for a while, so it's not a decision we need to jump into. What should we consider while making this decision? Any other landlords who had a similar choice with any advice?

    Many thanks.


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    #2
    snubbleste
    Banned (with Prison Access) Posts: 31,117 ✭✭✭✭snubbleste


    Have you considered renting out rooms instead? you'd get up to €12k tax free income pa.


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    #3
    Michael D Not Higgins
    Moderators, Society & Culture Moderators Posts: 7,223 Mod ✭✭✭✭Michael D Not Higgins


    snubbleste wrote: »
    Have you considered renting out rooms instead? you'd get up to €12k tax free income pa.

    Only if it's their principal private residence, which if they've moved across the country it will not be.


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    #4
    Whispered
    Registered Users Posts: 14,772 ✭✭✭✭Whispered


    snubbleste wrote: »
    Have you considered renting out rooms instead? you'd get up to €12k tax free income pa.

    Do you mean move out and rent each room separately? I hadn't thought of that. Although to be honest, it's a 3 bed home is a small commuter village. I think it would be more suitable for a family. There is no college or major employer in the immediate town. But I will definitely think about it. Thanks!


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    #5
    Whispered
    Registered Users Posts: 14,772 ✭✭✭✭Whispered


    Michael D Not Higgins wrote: »
    Only if it's their principal private residence, which if they've moved across the country it will not be.

    Ah ok, thanks.


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    #6
    Jasper79
    Registered Users Posts: 507 ✭✭✭Jasper79


    Whispered wrote: »
    We are thinking about putting our house, which we bought 9 years ago, to let. My husband has gotten a job offer in another part of the country (where rent would be a lot cheaper) and the journey would be about 2 hours each way. So we are thinking of renting our house out and renting a place closer to the new workplace. Obviously this isn't something we had foreseen, but we have to change with our circumstances. We are not in a position to sell due to negative equity.

    So, aside from the fact we wouldn't be able to charge in rent, what we pay on our mortgage, what other costs are associated with renting out your house? What should we think about? He has a few weeks to take the job or turn it down and even then he could travel for a while, so it's not a decision we need to jump into. What should we consider while making this decision? Any other landlords who had a similar choice with any advice?

    Many thanks.

    Tax will be the biggest expense.

    Rent received - 75% of mortgage interest paid - expenses.

    If pay top rate of income tax, tax will be at 52%.
    ay


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    #7
    draiochtanois
    Registered Users Posts: 2,655 ✭✭✭draiochtanois


    This post has been deleted.


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    #8
    Michael D Not Higgins
    Moderators, Society & Culture Moderators Posts: 7,223 Mod ✭✭✭✭Michael D Not Higgins


    draiochtanois wrote: »
    This post has been deleted.

    From IT70 of Revenue's guide to rental income (emphasis by me)

    "The room or rooms must be in a residential premises that is situated in the State and that is occupied by an individual as his/her sole or main residence during the particular tax year."


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    #9
    draiochtanois
    Registered Users Posts: 2,655 ✭✭✭draiochtanois


    This post has been deleted.


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    #10
    Michael D Not Higgins
    Moderators, Society & Culture Moderators Posts: 7,223 Mod ✭✭✭✭Michael D Not Higgins


    OP, to answer your question, there will be tax on the rental income at your marginal rate. Expenses and capital depreciation can be tax deductible, including professional fees, so I would speak to a tax accountant for at least the first year of renting (if you do decide to rent) as you can get valuable advice on reducing the tax burden. Other costs include landlord insurance, PRTB fees, letting fees (if done through a letting agency and can typically cost one month's rent), vacancy cost (typically taken to be one month for calculation), maintenance and repairs, and potential costs of evicting a tenant which can take a long time through the PRTB and courts if they decide not to leave voluntarily.


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    #11
    Michael D Not Higgins
    Moderators, Society & Culture Moderators Posts: 7,223 Mod ✭✭✭✭Michael D Not Higgins


    draiochtanois wrote: »
    This post has been deleted.

    If the OP is planning to move out of the house and not live there, I don't see where the nuance is. The tax law is clear on this point.


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    #12
    Whispered
    Registered Users Posts: 14,772 ✭✭✭✭Whispered


    Thanks all, so best bet would be to speak to an accountant. We were hoping to leave an agency to deal with it all, would they be in a position to advise on tax etc or would a separate accountant be necessary?

    Besides financial, is there anything else we need to think about? Is renting out your house a pain? Ideally we'd like a family in who'd make it their home rather than someone moving in and out every few months. Any tips for helping that happen?


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    #13
    Michael D Not Higgins
    Moderators, Society & Culture Moderators Posts: 7,223 Mod ✭✭✭✭Michael D Not Higgins


    Whispered wrote: »
    Thanks all, so best bet would be to speak to an accountant. We were hoping to leave an agency to deal with it all, would they be in a position to advise on tax etc or would a separate accountant be necessary?

    Besides financial, is there anything else we need to think about? Is renting out your house a pain? Ideally we'd like a family in who'd make it their home rather than someone moving in and out every few months. Any tips for helping that happen?

    I don't think the letting agencies tend to do tax advice, but they do offer services to manage the letting, including collecting the rent and organising repair people. All for a price of course. If they're vetting the tenants for you, be sure to be specific on the type of renters you're targeting but remember that equality legislation means they can't exclude people on discriminatory grounds.


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    #14
    Michael D Not Higgins
    Moderators, Society & Culture Moderators Posts: 7,223 Mod ✭✭✭✭Michael D Not Higgins


    PLL, your post has been removed, do not post illegal advice.


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    #15
    April 73
    Registered Users Posts: 846 ✭✭✭April 73


    I would be inclined to try to let the property yourself, even if you use an agent to look after any issues & to collect the rent after that.
    You will care more about who you rent your house to, than any agent ever will. When you meet people personally it's easier to get a feel for the kind of person they are & you can establish a relationship with them. I have always done better at picking tenants myself than the poor job agents did until I stopped using them.


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    #16
    Whispered
    Registered Users Posts: 14,772 ✭✭✭✭Whispered


    Thanks, I'm probably being niave but I'm hoping we can rent to people who would appreciate a decent landlord and be decent in return. I heard stories such as tenants calling landlords to change light bulbs or wrecking appliances through misuse and needing replacements very regularly etc.

    Who is responsible for maintenance such as grass cutting in the garden, exterior and interior paint, internal furnishings? Is there a website which lays out the responsibilities of the landlord? We'd literally be learning from scratch so have no idea.


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