Rent premium for increased occupancy ?

Middleage Fanclub

I have the opportunity to rent a 2 bed apartment to a family of four, wife stays at home with 2 kids under five. Given the increase in 'wear & tear' on the apartment, what % rent premium would you consider reasonable (over renting to 2 professionals). Premium aside, would you consider moving from 'professional' let to 'family' let?

Musketeer4

20% for increased wear and tear.
You'd be better off to decline and rent to professionals, its a landlords market and you can afford to be choosey here.

yqtwqxqm

Professionals are much easier to manage and get on with.
For some reason families see damage like writing on walls and furniture and p1ssy mattresses etc as normal wear and tear when you point it out when they are leaving.
Makes for too much work dealing with them.

Particularly as she stays at home and minds the kids there, the potential for a large amount of extra wear and tear is very large even compared to if both were working and the kids going to childminders.

I would avoid and rent it to a professional couple or rent the rooms separately to two professionals (which you could probably get away with charging a little more for the rooms individually than the apartment as a whole).

Ms Doubtfire1

Musketeer4 wrote: »

20% for increased wear and tear.
You'd be better off to decline and rent to professionals, its a landlords market and you can afford to be choosey here.

Love this remark. It's going to be tenants market again at some stage when the mini bubble bursts..thinking of circles and such.:D

yqtwqxqm

Ms Doubtfire1 wrote: »

Love this remark. It's going to be tenants market again at some stage when the mini bubble bursts..thinking of circles and such.:D

Thats exactly why landlords should charge as much as possible and not be letting below market rate now out the goodness of their hearts.

They should be banking as much as possible now and saving it to cover the inevitable downturn. We had one a few years ago, we will have another, be it in 3 years, 5 years or 10 years.

myshirt

Musketeer4 wrote: »

20% for increased wear and tear.
You'd be better off to decline and rent to professionals, its a landlords market and you can afford to be choosey here.

Where are your ethics or sense of decency?

Remember, this economy afforded the opportunity for second home ownership to many who never ever ever should have had that in a correctly functioning economy. Perks which the current generation are repaying now on their behalf.

Op, rather than a 20% premium, it should be a 20% discount off the baseline for less wear and tear. So in this case, leave the rent flat would be my call. Go for the quality sustainable settled tenant rather than a bump up in cash.

EagererBeaver

The usual suspects will be along to tell you you're a landlord simply trying to gouge a poor family struggling to get along in life any minute now.

Having seen the damage that kids do in their own house, never mind someone else's, I'd be inclined to put a premium of 30-35% of the standard rent on it. Lower if they're bringing their own furniture.

I'd also make sure you're very clear up front about inspections and that you make sure to follow through.

The other option, of course, is a much higher deposit than normal.

EagererBeaver

EagererBeaver wrote: »

The usual suspects will be along to tell you you're a landlord simply trying to gouge a poor family struggling to get along in life any minute now.

Oh look, they beat me to it.

Ms Doubtfire1

yqtwqxqm wrote: »

Thats exactly why landlords should charge as much as possible and not be letting below market rate now out the goodness of their hearts.

They should be banking as much as possible now and saving it to cover the inevitable downturn. We had one a few years ago, we will have another, be it in 3 years, 5 years or 10 years.

Not disputung that...but would you lower the rent for professional tenants than?

L1011

Ms Doubtfire1 wrote: »

Not disputung that...but would you lower the rent for professional tenants than?

The rent is already "lowered" to the asking price for the assumption of professional tenants.

yqtwqxqm

Ms Doubtfire1 wrote: »

Not disputung that...but would you lower the rent for professional tenants than?

I would charge as much as whoever I wanted to rent it to was willing to pay.
I i cant find someone I like willing to pay it, i will reduce it and see if I had any takers.
If I had none, I would then broaden my criteria for my preferred tenants.

Thats the market in action.

A few years ago landlords could get noone and had to reduce rents drastically to get tenants. This is the upswing of that. Plus now landlords have been bitten by the massive taxes they have to pay too, so will certainly be looking to make that easier on themselves too.

Ms Doubtfire1

I'd call that discrimination...just my 2 cents. Just something I'm wondering about: I am renting and I have plenty (PLENTY!!!!) of animals. I pay market value rent but I have a 'renovation agreement' with my LL. That is an x amount that is paid into a separate account I have visibility to. It's not part of the rental income, and as such it's not taxable. ( I think-I was told that) Any damage above normal wear and tear will be paid out of that at the end of a rental cycle, the remainder will be refunded to me. I find that works extremely well as it's nice to get a chunk of money back if you look after your rebted property.it takes a lot of stress out of the tenancy for both my LL and myself as we know everything is covered and I know if I do well, i have a nice chunk of money to go on holiday with...:D

Ms Doubtfire1

Ms Doubtfire1 wrote: »

Not disputung that...but would you lower the rent for professional tenants than?

The market rent (i.e. as much as someone is willing to pay me) is the baseline, it should be raised above this if the op takes on all the extra damage, wear and tear kids will do to the place being in it all day every day.

As I said easiest option is not to rent to them and find two professional tenants for the rooms who have no kids and no pets.

Mrs OBumble

Forget premiums. Just charge the market rent.

Yes, families are more wear-and-tear. But they're also likely to stay longer, so you'll have on average less re-letting work to do.

I do agree with the higher deposit and regular inspections, though.

Michael D Not Higgins

Ms Doubtfire1 wrote: »

I'd call that discrimination...just my 2 cents. Just something I'm wondering about: I am renting and I have plenty (PLENTY!!!!) of animals. I pay market value rent but I have a 'renovation agreement' with my LL. That is an x amount that is paid into a separate account I have visibility to. It's not part of the rental income, and as such it's not taxable. ( I think-I was told that) Any damage above normal wear and tear will be paid out of that at the end of a rental cycle, the remainder will be refunded to me. I find that works extremely well as it's nice to get a chunk of money back if you look after your rebted property.it takes a lot of stress out of the tenancy for both my LL and myself as we know everything is covered and I know if I do well, i have a nice chunk of money to go on holiday with...:D

Sounds like a possible tax dodge from the landlord to be honest.

Mrs OBumble

Mrs OBumble wrote: »

Yes, families are more wear-and-tear. But they're also likely to stay longer, so you'll have on average less re-letting work to do.
.

Probably have a higher chance of over holding etc too though or not paying rent in the event of a job loss as they would be more desperate. I think young professionals who will only see it as a place for a few years at most are the ideal tenant to aim for (preferably two unconnected people also paying their rent separately to further reduce the risk of lost rent).

NinjaTruncs

Mrs OBumble wrote: »

Forget premiums. Just charge the market rent.

Yes, families are more wear-and-tear. But they're also likely to stay longer, so you'll have on average less re-letting work to do.

I do agree with the higher deposit and regular inspections, though.

They may stay longer in a house, but not in a 2 bed apartment, imo they will be looking to get out as quick as they can.

irish_goat

Interesting thread. I live in a 2 bed apartment with one other fella. We spend about half an hour awake in the mornings each and then roughly 5 hours in the evenings. So let's say 11 hours a day total tenant activity in the apartment. A stay at home mum would in theory be up 9am-10pm (erring on the side of caution there). That's 11 hours straight away. Then factor in what hours the kids might be up. It's quite an increase, and that's not even counting the dad. Over the course of a year you're looking at well over double the amount of wear and tear 2 working professionals would do.

Could in theory factor in increased use on the washing machine, dryer, water boiler if these are all included too.

Mindset

If there is wear and tear that would cost you money to fix take it out of their deposit at the end of the lease. I don't think its fair to charge extra premium just because its a family.
You can protect yourself by adding a clause in the lease agreement to safeguard you against pissy beds and marked walls.

McGrath5

Simply charge the market rate - though in this market professionals are more desirable since they will spend far less time in the property compared to a couple with kids.

Ms Doubtfire1

Michael D Not Higgins wrote: »

Sounds like a possible tax dodge from the landlord to be honest.

That I don't know. It's the LL business but it has worked well so far for both sides. Maybe it's different if Ll resides in the UK?IN addition, the is the security deposit taxed ? It is not income in the real sense of the word?

L1011

Ms Doubtfire1 wrote: »

That I don't know. It's the LL business but it has worked well so far for both sides. Maybe it's different if Ll resides in the UK?IN addition, the is the security deposit taxed ? It is not income in the real sense of the word?

If the landlord lives in the UK you need to be either paying an Irish agent or submitting withholding tax to Revenue.

The deposit is not taxed - as it has to be either returned or spent on real expenses.

yqtwqxqm

Gracelyn Silly Fumble wrote: »

Probably have a higher chance of over holding etc too though or not paying rent in the event of a job loss as they would be more desperate. I think young professionals who will only see it as a place for a few years at most are the ideal tenant to aim for (preferably two unconnected people also paying their rent separately to further reduce the risk of lost rent).

True. And a picture of the evil landlord and two innocent children with tears in their eyes, whos mother wont pay the rent beside it, on the front of the indo too. Or worse all over the internet. :eek:

Less likely to be such drama with professionals.
Even less likely with Airbnb.

ted1

yqtwqxqm wrote: »

Professionals are much easier to manage and get on with.
For some reason families see damage like writing on walls and furniture and p1ssy mattresses etc as normal wear and tear when you point it out when they are leaving.
Makes for too much work dealing with them.

Places should be painted every 4 years or so and families tend to stay longer. So writing on walls should not be an issue.
Mattresses can be depreciated over 8 years, so if they stay for 4 you can throw out the mattress and deduct 50% of the mattress price from the deposit and so on

Ms Doubtfire1

L1011 wrote: »

If the landlord lives in the UK you need to be either paying an Irish agent or submitting withholding tax to Revenue.

The deposit is not taxed - as it has to be either returned or spent on real expenses.

I'm aware of the upper re tax-I leave that to my LL but he provides me with proof annually that he has paid the tax.

So, if a deposit is not taxed, that the renovation money shouldn't be taxed either as it's proven to be spent either in repairs or returned to me?

ted1

ted1 wrote: »

Places should be painted every 4 years or so and families tend to stay longer. So writing on walls should not be an issue.
Mattresses can be depreciated over 8 years, so if they stay for 4 you can throw out the mattress and deduct 50% of the mattress price from the deposit and so on

You will travel far and wide to find a LL who paints anything near every 4 years, even owners wouldn't do it so often in their own house. What about furniture, washing machine dryer and dishwasher which probably get 10 times more use with a two adults and two kids compared to two professional adults thus failing much sooner and needing replacement. If you want to maximise you profit you want to minimise unnecessary expenses.

Musketeer4

If you ever need the apartment back it will be much easier to get rid of two independent professionals than get rid of a family with ties.

rawn

As a soon-to-be mother struggling to find accommodation at market rate (never mind this "premium rate" I'm hearing about here for the first time), i genuinely feel like crying. I know it's a business and all that, but this adds a whole new level of difficulty into finding a home. Couldn't you just charge a fair market rate and tell the tenant to replace dirty mattresses and paint the walls if necessary, which to be fair most decent tenants would do before moving out?

Musketeer4

On the painting thing, I would never entertain a tenant's request that they do the painting themselves - you'd end up with some slap dash amatuer effort with runs in the paint, paint on the skirtings and carpet etc. No, I'd be getting a professional decorator in and recover the cost from the tenant.

L1011

rawn wrote: »

As a soon-to-be mother struggling to find accommodation at market rate (never mind this "premium rate" I'm hearing about here for the first time), i genuinely feel like crying. I know it's a business and all that, but this adds a whole new level of difficulty into finding a home. Couldn't you just charge a fair market rate and tell the tenant to replace dirty mattresses and paint the walls if necessary, which to be fair most decent tenants would do before moving out?

Because most of them won't, and the deposit won't cover it. You have no way of knowing at the start whether the tenant will or not.

Also, as has been said, parents idea of fair wear and tear (or pet owners, not that its on-topic) vs people without is completely different.

Ms Doubtfire1

L1011 wrote: »

Also, as has been said, parents idea of fair wear and tear (or pet owners, not that its on-topic) vs people without is completely different.

Disagree on the petwoners.I know EXACTLY how much damage my lot can cause I also know 1500 per year covers it.(that aside)

kidneyfan

A family might stay for eight years. The cost of refurbishment is trivial compared to a the cost of churn. (Of course different for you as it is an apartment - anything about this apartment that makes it attractive for a family?).

kidneyfan

ted1 wrote: »

Places should be painted every 4 years or so and families tend to stay longer. So writing on walls should not be an issue.
Mattresses can be depreciated over 8 years, so if they stay for 4 you can throw out the mattress and deduct 50% of the mattress price from the deposit and so on

2 years - revenue will allow 2 yearly writeoff with proof

runawaybishop

Mindset wrote: »

If there is wear and tear that would cost you money to fix take it out of their deposit at the end of the lease. I don't think its fair to charge extra premium just because its a family.
You can protect yourself by adding a clause in the lease agreement to safeguard you against pissy beds and marked walls.

War and tear cannot be taken out of a deposit. Families do more damage and cause greater wear and tear than professionals.

runawaybishop

myshirt wrote: »

Where are your ethics or sense of decency?

This is a business, not a charity.

yqtwqxqm

kidneyfan wrote: »

A family might stay for eight years. The cost of refurbishment is trivial compared to a the cost of churn. (Of course different for you as it is an apartment - anything about this apartment that makes it attractive for a family?).

I think people in general overestimate the cost of churn.
There has been no cost to churn for many a year now and it can actually be positive nowadays.
Look how many landlords are now ending a tenancy after 4 years no matter what. And if you dont know any, pose the question to landlords on boards and you will find out why.
Government interference, tying my hands would be top of the list for me.

yqtwqxqm

kidneyfan wrote: »

2 years - revenue will allow 2 yearly writeoff with proof

I find a new mattress has to be bought for every tenant now.
Better not to provide a mattress at that rate. Let the tenant buy a nice comfy one of their own and take it with them.
No matter what a landlord pays for a mattress it will be wrecked.

yqtwqxqm

yqtwqxqm wrote: »

I think people in general overestimate the cost of churn.

+1

There is no reason to even have a week of lost rent nowadays, you could easily have a new tenant moving in the morning after the previous one moves out and almost certainly at a higher rent.

I rent a room in a house and have filled the other rooms in the house for the LL when people have moved out, the last time someone moved out I placed an ad at 9am, had 6 or 7 call by half 9. 4 viewings arranged for that evening and one of them 4 took the room and had their deposit transferred to the LL before 9pm that night. I'm moving out myself in the next few weeks and have already people lined up to view the room without even placing an ad on daft (which I want to avoid as I know I'll get about 100 calls).

yqtwqxqm wrote: »

I find a new mattress has to be bought for every tenant now.

This I wouldn't agree with, I've never seen new mattresses being provided and this is in houseshares where there are new tenants moving in regularly. I'd guess the mattress is at least 10+ years old in my room and has seen many different tenants. If I were a LL I certainly wouldn't be replacing them unless they were wrecked and that takes years or else isn't normal wear and tear and could be deducted from the deposit.

K.Flyer

runawaybishop wrote: »

War and tear cannot be taken out of a deposit. Families do more damage and cause greater wear and tear than professionals.

Thats a very broad statement and not entirely true.
From my own experience of carrying out maintenance in hundreds of apartments a year, I would say its almost a 50 - 50 split.
I have seen apartments after so called professional tenants left like a tip, walls badly marked from bringing bikes into the hall, items broken etc and apartments after familes left spotless, and the converse of all of that.
Charge the normal going rate, increase on deposit, 6 month inspection, hold the deposit if there are any issues at the end.

Musketeer4

I'll second that. My sister rented her bunglow to an architect, an apparent "professional", and he left about 20 bags of decaying rubbish behind, the kitchen was in a desperate state with thick grease everywhere and hadtaken it upon himself to drill TV brakets onto the walls and had caused blockages in the septic tank system that I had to unblock - the rods i used came out covered in condoms, there must have been hundreds in there! <mod snip - dragging discussion off topic>
Subsequently let the house to a polish group of petrol heads working in the meat factory. House was spotless.

Elliott S

K.Flyer wrote: »

Thats a very broad statement and not entirely true.
From my own experience of carrying out maintenance in hundreds of apartments a year, I would say its almost a 50 - 50 split.
I have seen apartments after so called professional tenants left like a tip, walls badly marked from bringing bikes into the hall, items broken etc and apartments after familes left spotless, and the converse of all of that.
Charge the normal going rate, increase on deposit, 6 month inspection, hold the deposit if there are any issues at the end.

Yeah, I think a house might be better looked after if it's acting as a family home. Nobody wants their children living in a dirty environment. Whereas in house shares, things tend to not be as clean as people would have in the home they settle down in, I find. People just don't care as much about keeping a house share clean outside of the basics.

So I think it probably evens out. There is more wear and tear in some ways, but small repairs and regular cleaning that avoids that hard to remove grubbiness is more likely to happen.

runawaybishop

K.Flyer wrote: »

Thats a very broad statement and not entirely true.
From my own experience of carrying out maintenance in hundreds of apartments a year, I would say its almost a 50 - 50 split.
I have seen apartments after so called professional tenants left like a tip, walls badly marked from bringing bikes into the hall, items broken etc and apartments after familes left spotless, and the converse of all of that.
Charge the normal going rate, increase on deposit, 6 month inspection, hold the deposit if there are any issues at the end.

A lot of ads state professionals only because families do cause more damage and wear and tear over all. Anyone will kids will tell you how quickly they will make a mess of the place, no matter how vigilante they are.

athtrasna

Our final tenants were a family. The agent lied to us about inspections. When they moved out the damage included every toilet seat in the house broken, carpets and sofas and mattresses were all smelly, dirty and crunchy because they had never cleaned up spills or mud, kitchen cabinet doors were broken off...you get the picture. The first family we had let to and the tenants that made up our minds to end the landlord adventure. Never had an issue with professionals.

intheclouds

runawaybishop wrote: »

A lot of ads state professionals only because families do cause more damage and wear and tear over all. Anyone will kids will tell you how quickly they will make a mess of the place, no matter how vigilante they are.

I always thought ads stating professionals only mean no social welfare tenants.

I never imagined it meant no families, would 2 married doctors with children not be considered professionals?

runawaybishop

intheclouds wrote: »

I always thought ads stating professionals only mean no social welfare tenants.

I never imagined it meant no families, would 2 married doctors with children not be considered professionals?

Used to mean no families. Now means no RAS or families.

Professionals means people that don't spend much time in the house and have plenty of money to pay.

K.Flyer

Yes I have seen lettings with kids, kids can be untidy, but when they move out their untidyness goes with them.
My opinion is based on my personal experience of having the benefit of seeing a huge broad spectrum of tenancies, everything from the lowest to the highest around Dublin City, from corporate to the reluctant L.L
My work brings me into their personal space and it really can be an eye opener as to how some people live. There are not many here who have that insight, "through the keyhole" as such, and it has thought me you should never judge a book, a property or a tenant by the cover

_kookie

Im am just finished a let to a family.
Over the last 15 years I have had 2 families and 4 lets to professionals.
All lets to professionals have been just great, with no problems or stress.
Both families I let to, left the place in a mess and the furniture, walls, doors, garden destroyed, requiring work to rectify that cost well in excess of their deposit. Both families were quite happy to say "The children did it, its normal wear and tear. What did you think was going to happen with children?" like it was my fault for letting them rent from me in the first place.
The last family moved out last Friday and I am only now just ready to put the property back on the market. But Im going to try something else first while I have the chance - thats why i registered on boards, but i cant start a thread asking my question yet as i dont have enough posts.

I should have learned my lesson, but I thought the first family who did this might have been a one off, but no, the next one was even worse.

So I will never again rent to a family with children. I should have know you cant control children as my own have wrecked my house over the years. Its what they do and you can only try to minimise it by stopping them as the start writing on walls etc. But I didnt expect someone to just let their kids off and wreck the place and then not take any responsibility or pay for the damage themselves.

With professionals its very easy. They hardly ever complain or contact you unless its an emergency. Families are just too needy. They amount of contact needed would make you tear your hair out.

So i've been twice bitten now. And dont want a third bite.
Im sure there are lovely families out there, but my odds so far havent been good.

jester77

Can you not simply just put it in the contract that the house/apartment has to be returned in the same state as it was let?

Here, that is standard. You can paint the walls, put up wallpaper, hang anything you want on the wall, drill holes, add/remove non-supporting walls, put down carpets, etc. When you move out, everything gets returned to its original state, and walls are painted.

jester77

jester77 wrote: »

Can you not simply just put it in the contract that the house/apartment has to be returned in the same state as it was let?

Here, that is standard. You can paint the walls, put up wallpaper, hang anything you want on the wall, drill holes, add/remove non-supporting walls, put down carpets, etc. When you move out, everything gets returned to its original state, and walls are painted.

That sounds like an exceptionally bad idea to me. No way would I allow anything on that list above (bar maybe holes for a few paintings which I would want to see exactly where etc before hand and I'd want to do the drilling myself for them) even if it was claimed they would return it to look the same as it was before, as looking like it was before is about all it would most likely be (underneath it could be a disaster) or not even with the excuse of "oh we didnt know we had to return it etc". Give an inch and people will take a mile. Stick to professionals is the easiest option and lay down strict rules of what can and can't be done with the place and inspect regularly.

L1011

jester77 wrote: »

Can you not simply just put it in the contract that the house/apartment has to be returned in the same state as it was let?

Here, that is standard. You can paint the walls, put up wallpaper, hang anything you want on the wall, drill holes, add/remove non-supporting walls, put down carpets, etc. When you move out, everything gets returned to its original state, and walls are painted.

You can, but people won't do it and the deposit won't cover it.