Full years rent paid upfront

bensboys

Hi,

We have just found tenants for a property we have available for rent and the new tenants are signing an annual lease agreement for 12 months and have suggested paying the rent for the full year in advance. Is there anything I should be concerned about?

Gumbo

Taxes etc remain the same so it makes no difference in that sense.
Just don't forget to carry out your regular inspections as it's easy to forget once the money is lodged.

Tigger

No
Unless you think you might have to get rid it's a brilliant idea

Friends of mine are liquid and they got a great deal by doning that

Effects

bensboys wrote: »

Is there anything I should be concerned about?

Grow house? Seem really weird to be offering a whole year in advance.
Maybe they're just trying to make you more inclined to accept them over other tenants?

foggy_lad

People who grow illegal drugs in grow-houses usually pay for 6months+ up front for the houses they rent.

bensboys

Tigger wrote: »

No
Unless you think you might have to get rid it's a brilliant idea

Friends of mine are liquid and they got a great deal by doning that

Yes that's what I thought, having met them and checked references all seems good. Just making sure I wasn't missing anything obvious!

deandean

First and only time I heard of this arrangement, the was then used as a 'grow house' and it was destroyed after.

CarrickMcJoe

Bet they're going to put your place on Airbnb to make a tidy profit. Guy on LIVELINE had something like 40 properties on the go at one time, all of which he was renting.

bensboys

deandean wrote: »

First and only time I heard of this arrangement, the was then used as a 'grow house' and it was destroyed after.

It's the top floor of an apartment, would that make the above scenario unlikely?

Mink

Personally it would make me nervous. I'd accept 2 months max.

My friend recently rented out her house and one guy called her offering 3 months without even seeing it and it put her off renting it to him.

my3cents

We pay 12 months in advance. Landlord has no problems but we have been here over ten years.

endacl

bensboys wrote: »

It's the top floor of an apartment, would that make the above scenario unlikely?

Lots of 'ladies of negotiable virtue' as tenants? Renting by the hour...

Mrs OBumble

my3cents wrote: »

We pay 12 months in advance. Landlord has no problems but we have been here over ten years.

I'm curious - why do you do that?

I'd be suspicious, OP. Why are they doing it? Maybe there is a valid reason, but I'd be asking the question.

If you do decide to take them, make sure that you keep the money and don't use it until the time it covers has passed - imagine if there was a fire, or you had to evict them for something, and didn't have the cash to pay them back.

foggy_lad

It is possible that their employer is paying the rent and chooses to pay for a year at a time as that may be the length of the employees contract?

volchitsa

Why would anyone do that? Seems crazy to me unless 1) the rental market is so unfavorable to tenants that it's a way of getting picked over anyone else (and while it's bad alright, it's not that bad) or else 2) they don't want you nosing around after. At all - not even normal landlord stuff I mean.

Basically I'd be worried.

bensboys

volchitsa wrote: »

Why would anyone do that? Seems crazy to me unless 1) the rental market is so unfavorable to tenants that it's a way of getting picked over anyone else (and while it's bad alright, it's not that bad) or else 2) they don't want you nosing around after. At all - not even normal landlord stuff I mean.

Basically I'd be worried.

They are a mid 20's couple, they came to Ireland for 12 months to learn English and get jobs along the way. They showed me bank statements with the cash there. I found them to be a lovely couple looking for a life experience.

4ensic15

kceire wrote: »

Taxes etc remain the same so it makes no difference in that sense.
Just don't forget to carry out your regular inspections as it's easy to forget once the money is lodged.

It will bring the entire amount into one tax year rather than spread over two.

bensboys

4ensic15 wrote: »

It will bring the entire amount into one tax year rather than spread over two.

That's what I was thinking might be the case giving me rental income for 22 months (10+12) in 2016

68 lost souls

I would think that it would help them budget if they are here for 12 months then they do not have to worry about making rent every month if it is already done. They have the cash now but may not have it in time to come.

goz83

If you are satisfied with the couple and you do your normal checks, then all should be good. With regards to tax, I would suggest that you could take the remainder of this years rent and then the rest in January.

my3cents

Mrs OBumble wrote: »

I'm curious - why do you do that?

I'd be suspicious, OP. Why are they doing it? Maybe there is a valid reason, but I'd be asking the question.

If you do decide to take them, make sure that you keep the money and don't use it until the time it covers has passed - imagine if there was a fire, or you had to evict them for something, and didn't have the cash to pay them back.

The money was sat in the bank doing nothing so no advantage to us having it there.

witchgirl26

I know from friends moving to certain countries that 12 months rent upfront is the norm there so maybe they're following that. If you're worried about what they might be doing, just do random inspections and note in the lease that these will happen.

jcd5971

I paid a year up front before for rent,
It was purely for convenience.

I had been renting the apartment for over a year anyway so trusted the ll but he always took rent by cash, he didn't want it lodged for some reason, and as he lived a few hours away sometimes he might be a week or two late coming to collect rent, and then get dates and stuff wrong etc,

He is an honest sort tho just a bit unorganised and I always got receipts.

Now personally I hated having money lying around in cash form I couldn't use waiting to pay rent it drove me mad, so I suggested to pay him for the year. He agreed and everyone happy.

Sorry for length of post, but just an idea of why Ppl would possibly suggest this.


Also a grow house :-D come on

volchitsa

bensboys wrote: »

They are a mid 20's couple, they came to Ireland for 12 months to learn English and get jobs along the way. They showed me bank statements with the cash there. I found them to be a lovely couple looking for a life experience.

Actually I hadn't thought they might not be permanently based in Ireland. That's a fair enough reason, especially as they may have been worried that landlords might not want to rent to "transients" with no links to the country.
It's just that I'd never heard of anyone doing that, and TBH find it hard to imagine having a year's rental sitting in the bank doing nothing!
But I remember when I first went to the US, years ago now, having to have money in the bank to prove I was self sufficient, so I guess it's rather like that.

Henry Ford III

Would money laundering be a concern here?

Eric Cartman

its in a bank account, so I'd be less concerned about the possibility that its a grow op / brothel.

Get them to pay it via bank transfer and have all your documentation for them to sign. Id probably just ask for a scanned copy of passports as a little more security.

hawkelady

Henry Ford III wrote: »

Would money laundering be a concern here?

I'm confused. How could it be money laundering. The ll will receive a years worth of rent.

Henry Ford III

hawkelady wrote: »

I'm confused. How could it be money laundering. The ll will receive a years worth of rent.

It's not that usual for someone to pay maybe €18k of rent upfront. You'd wonder the source of those funds.

my3cents

Henry Ford III wrote: »

It's not that usual for someone to pay maybe €18k of rent upfront. You'd wonder the source of those funds.

But if it comes from a bank account its not your problem, its the banks problem to worry about and confirm where any cash comes from, once its in the bank then that job is done.

mel123

If i was the tenant i'd be worried about paying this up front and then say not liking the apartment, not liking the area, the landlord not fixing stuff because they dont give a sh*t cause they have their money, needing to go home for good because of an emergency etc.

Im sure there is nothing untowards about it at all, but i find it very strange a couple would part with money like this for the first time (fair enough a poster above has done it but lived in the apartment before so knew what they were getting).

foggy_lad

mel123 wrote: »

If i was the tenant i'd be worried about paying this up front and then say not liking the apartment, not liking the area, the landlord not fixing stuff because they dont give a sh*t cause they have their money, needing to go home for good because of an emergency etc.

Im sure there is nothing untowards about it at all, but i find it very strange a couple would part with money like this for the first time (fair enough a poster above has done it but lived in the apartment before so knew what they were getting).

Especially as they are only just in the country, I would also have concerns about them saying they are here to learn English and maybe work if they find work, have they the appropriate visas for this? Will there be hassle for the OP if they got arrested and deported?

conf101

Henry Ford III wrote: »

Would money laundering be a concern here?

Renting wouldn't work for money laundering, would it? Once they pay the rent that money's gone

hawkelady

conf101 wrote: »

Henry Ford III wrote: »

Would money laundering be a concern here?

Renting wouldn't work for money laundering, would it? Once they pay the rent that money's gone

Exactly what I was getting at only you explained it a lot simpler!!

foggy_lad

conf101 wrote: »

Renting wouldn't work for money laundering, would it? Once they pay the rent that money's gone

Unless there was some kind of crisis a month in that meant they had to return home and they wanted the remaining rent back. money laundering involves a certain loss so 10-15% might be acceptable?*



*I know nothing about money laundering.

They're not Irish and not familiar with our legal system, tenant rights etc. and have no desire to get involved with irish bureaucracy, courts etc. They may feel that having paid 12 months in advance gives them additional security. In addition, their funds might be based abroad so it might be simpler for them to transfer it in a single go. If their references check out, they'll probably be excellent tenants.

The_Conductor

It was up until recently very unusual to have arrangements like this.
I've come across 3 now in the last week.
In all cases- either 6 months or a full years rent was paid up front (normally by the person themselves, sometimes by their employer- which in the one case I know of- is Intel Leixlip).

Its a good method for prospective tenants to distinguish themselves from other prospective tenants- and in a situation where there is an increasingly vocal minority of tenants getting away without paying rent, and knowing it can take 12 months+ to evict them- its very attractive to many landlords.

OP- providing you have a decent lease agreement- with appropriate safeguards for both the tenant and the landlord- alongside a reasonable inspection regimen (which could be once every 6 months or so- really it depends on the tenant)- absolutely no reason not to go with it.

If I were in a situation like this- I'd schedule some remedial works to the property immediately prior to the commencement date of the tenancy- to enhance the property for the prospective tenant- and to try and shelter some of the rental income from the taxman. Get some tax advice (not in this forum).

Musketeer4

bensboys wrote: »

They are a mid 20's couple, they came to Ireland for 12 months to learn English and get jobs along the way. They showed me bank statements with the cash there. I found them to be a lovely couple looking for a life experience.

Op, that all makes it sound even more dubious! Foreign bank statements? Perhaps they just got creative in MS Paint?

They might not even be the people staying in the house! They could be just nice decoys sent out to secure it for whatever purposes.

pilly

I don't think it's completely unusual to do it, I thought about doing it before because I had gotten a lump sum of money and I knew then my rent would be paid and I wouldn't spend it.

appfry

I know a landlord who rents out their apartment and when prospective tenants come he tells them that its 6 months deposit and 6 months rent in advance, paid every 6 months. He has two apartments on the go with this and it seems to work out well for him.
He inspects them every 2 months.
He has been doing this about 2 years now.
I was going to do this myself as I rent out my house for 6 or 8 months at a time and thought this might be a handy way of doing it.
Now im thinking of renting it to a friend doing airbnb. eg I rent to him and he does Airbnb.
Not fully decided yet.

karenalot

I've paid 6 months rent up front before while travelling in Australia. I went over with all the savings I had and didn't want the temptation of dipping into them before I had gained employment. If I didn't get a job at least I wouldn't have to worry about a roof over my head.

On the other side I rented out a property in North Kildare this year and received a few offers to pay between 3-6 months in advance. The market is so tough out there people are becoming desperate.

athtrasna

Mod note

No need for race based generalisations. Thanks