Rent increase megathread

punisher5112

Donie75 wrote: »

My tenant signed a lease in August 2013. I have not given the tenant a new lease to sign since then.
I want to increase the rent now and it is in a rent pressure zone. I looked at the RTB calculator and it says I can increase from €850 to €913.75. Do I need to give 90 or 28 days notice seeing as it's been a long time since the rent was increased and it was before the new legislation?

They are on a part 4 so it applies to years there.

Ms Doubtfire1

I'd go with 90 days.

Sean Fantastic

super_furry wrote: »

They're trying to con you. Someone screwed up and didn't raise the rent in time and now they're trying to cover their arse.

Surely something as time critical as that letter would be sent via registered post and if they can't prove they sent it, they didn't.

If you can't prove that they didn't send it, they did.

Sean Fantastic

Ms Doubtfire1 wrote: »

I'd go with 90 days.

Why?

Donie75

I rang the RTB and they said 90. It seems that these new rules mean we have to increase rents or it could affect future resale value.

Sean Fantastic

Donie75 wrote: »

I rang the RTB and they said 90. It seems that these new rules mean we have to increase rents or it could affect future resale value.

Absolutely! You should increase as much as you possibly can as often as you possibly can.

Around the time of the new law I read about people talking about key fees, etc. and other charges that could be introduced to the tenant as a way of establishing rents that were of market value.

Has anyone had any success with that?

ZeroThreat

Excuse my ignorance, but how exactly are these so called Vulture fund landlords able to jack up rents by 25 or 30% at a whim?

Sean Fantastic

ZeroThreat wrote: »

Excuse my ignorance, but how exactly are these so called Vulture fund landlords able to jack up rents by 25 or 30% at a whim?

Presumably because it's fair market value and people will pay it?

I'm looking at Daft right now and there's very little available to rent and what is there is extortionate. I think a lot of people of are renting their properties out under the table. In the current market there'd be no shortage of takers either. I think the government has made a mess of this, tbh.

Fian

Michael D Not Higgins wrote: »

Since you're only there 2 years and this is your first rent increase, the value of m in the RPZ formula is 24 meaning 4%, not 8%, is applicable. The notice is fine if you're there 2 years but if you're only there 2 years in June then it's wrong. The rent review can only be done after 2 years have elapsed, not in advance to have the new rent start at the 2 year mark.

Actually 4.5%.

4% * 27/24 months =4.5% - to take effect 27 months after the tenancy commenced.

So after 24 months a rent review can be made, you are entitled to 90 days notice and the landlord will say the rent increase is to take effect 3 months after the rent review (to allow the 90 days). Formula operates on the number of months since the last rent took effect that the new rent takes effect - in this case 27. This is basically 2% per annum since the initial rent took effect applied over the 27 months that the initial rent will run for.

ZeroThreat

Sean Fantastic wrote: »

Presumably because it's fair market value and people will pay it?

I'm looking at Daft right now and there's very little available to rent and what is there is extortionate. I think a lot of people of are renting their properties out under the table. In the current market there'd be no shortage of takers either. I think the government has made a mess of this, tbh.

Sorry, I should have quoted what I was replying to. It was much earlier in the thread and someone was talking about only being allowed to increase rent by 4% unless the property hadn't been occupied in the past 2 years. I was asking why the rent hike rules didn't apply to the big boys.

Graham

ZeroThreat wrote: »

Excuse my ignorance, but how exactly are these so called Vulture fund landlords able to jack up rents by 25 or 30% at a whim?

The rules apply to all, any evidence to the contrary should be taken up with the RTB.

The_Conductor

ZeroThreat wrote: »

Sorry, I should have quoted what I was replying to. It was much earlier in the thread and someone was talking about only being allowed to increase rent by 4% unless the property hadn't been occupied in the past 2 years. I was asking why the rent hike rules didn't apply to the big boys.

The vulture funds have to obey the law.
If you- as a pre-existing or a new tenant- contend that they are in breach of the law- take it up with the RTB.

Baby01032012

Vulture funds have endless capital from investors, very low debt leverage, huge credit or loan facilities with banks. They have efficiencies of scale im buying power given the volume they were able to purchase off Nama at such a low average cost per unit. They're in it for the capital gain not the paltry 4 per cent rent increase. They have huge tax incentives in the tax structure. They're not in it for the long run and will offload when the time is right.

The_Conductor

Baby01032012 wrote: »

Vulture funds have endless capital from investors, very low debt leverage, huge credit or loan facilities with banks. They have efficiencies of scale im buying power given the volume they were able to purchase off Nama at such a low average cost per unit. They're in it for the capital gain not the paltry 4 per cent rent increase. They have huge tax incentives in the tax structure. They're not in it for the long run and will offload when the time is right.

Which is why, in my humble opinion, residential rentals should be treated as a wholly separate category by Revenue- and taxed at a flatrate of the rental income- perhaps at 20-25%. It is abhorrent that vulture funds get away with creaming off Irish tenants- and Irish landlords have to pay up to 54% tax on rental income- when a significant majority of vulture funds get away with paying little or no tax on the cashflow they generate from rental income.

I personally thing Revenue should simplify the whole taxation of rental income- and charge a set percentage of the gross rental income to everyone- I'm pulling 25% out of the sky here- and apply this rate to absolutely all rental income from absolutely all properties let on the residential market.

The 75% remaining should be plenty for landlords to pay whatever costs they have- management charges, mortgages etc etc

In addition to the morally dubious manner in which the vulture funds were allowed to set themselves up as charities to avoid paying Irish tax- they tend to use byzantine financial mechanisms- loading debt on properties- so as to have a paper loss to show Revenue if anyone ever asks. Apparently its all legal. Its also not just in the residential property sector that this happens- its what happened the 5 times Telecom Eireann changed hands- and indeed- its the mechanism the Ontario Teacher's Pension Fund used when they purchased the National Lottery- the lent a holding company the money to purchase the company @ 12% interest- so they need a gross profit of over 60 million a year just to cover the 'debt' associated with the deal- despite having funded it with cash themselves........

The mind games these multinational companies play- are boggling- and indeed, completely legal. If a couple of PRSI tax payers walking down the street came up with such schemes- they'd be in jail before they knew what happened.

As residential property lettings are to the fore in everyone's minds- it really is high time that someone took the bull by the horns and came up with an equitable manner of taxing the sector- that was fair on tenants, landlords- and the Irish taxpayer.

Selik

Here's a good example an apartment for rent that is clearly tied to the new rules:

https://www.daft.ie/dublin/apartments-for-rent/dublin-8/joyce-house-viking-harbour-ushers-island-dublin-8-dublin-1730878

Most apartments of this size generally rent for anywhere between 1,200 and 1,400 per month depending on condition and spec.

Interestingly note the following at the end of the ad:

There is also a designated parking space available at a separate charge of 140 euro per month.

This will now become commonplace I imagine and although not mentioned in the ad there could well be 3 months deposit and key fee also.

Selik

Here's another - seeing a few of these lately so at least some landlords are sucking up the new rules.

https://www.daft.ie/dublin/apartments-for-rent/dublin-8/earlsfield-court-79-88a-francis-street-dublin-8-dublin-1730527

I wouldn't be hard to imagine a lot of under the counter deals being done though in these situations - I would say in this case they must have had 100s of enquiries at the very least (noting also that it's let agreed already LET AGREED and was only posted yesterday).

Selik

Selik wrote: »

Here's a good example an apartment for rent that is clearly tied to the new rules:

https://www.daft.ie/dublin/apartments-for-rent/dublin-8/joyce-house-viking-harbour-ushers-island-dublin-8-dublin-1730878

Most apartments of this size generally rent for anywhere between 1,200 and 1,400 per month depending on condition and spec.

Interestingly note the following at the end of the ad:

There is also a designated parking space available at a separate charge of 140 euro per month.

This will now become commonplace I imagine and although not mentioned in the ad there could well be 3 months deposit and key fee also.

Charging for parking is not a new thing though. I've seen plenty of complexes over the years where some apartments will include it in the rent while others charge extra for it and if the people taking their apartment don't want it they rent it out separately to a commuter or someone in the complex who needs an extra space etc.

Selik wrote: »

I wouldn't be hard to imagine a lot of under the counter deals being done though in these situations - I would say in this case they must have had 100s of enquiries at the very least (noting also that it's let agreed already LET AGREED and was only posted yesterday).

There is definitely some under the table deals going down with people so desperate for places and willing to outbid and over pay to secure places. I can see "agreements" being made where the place is officially rented within the rules and rent paid by bank transfer but a cash top up is paid to the LL off the books to being the rent up to market rate or even higher.

Arcade_Tryer

A potentially nice little opportunity for an undercover Garda operation there^

Arcade_Tryer

Arcade_Tryer wrote: »

A potentially nice little opportunity for an undercover Garda operation there^

If you are suggesting I am doing this it would be very difficult since I'm not a LL (nor a tenant going along with a con). I was simply stating that it's bound to be happening.

Regardless don't know why you think there would be an undercover Garda operation as the guards would have nothing to do with that sort of thing.

Arcade_Tryer

Noelle Most Tang wrote: »

If you are suggesting I am doing this it would be very difficult since I'm not a LL (nor a tenant going along with a con). I was simply stating that it's bound to be happening.

I was suggesting nothing of the sort. I was speaking in general, same as yourself!

Regardless don't know why you think there would be an undercover Garda operation as the guards would have nothing to do with that sort of thing.

Perhaps they should. It's ridiculous we live in a society where a guard is more likely to be undercover trying to catch a person paying for a prostitute, than trying to catch someone committing fraud.

Arcade_Tryer

Arcade_Tryer wrote: »

Perhaps they should. It's ridiculous we live in a society where a guard is more likely to be undercover trying to catch a person paying for a prostitute, than trying to catch someone committing fraud.

Not really, activities around prostitution would fall under criminal ofrrences such as organised crime, trafficking, paying for sex etc. Breaking tenancy law and paying extra money to a LL to get around the rules is not a criminal offence so not the remit of the guards.

Also there is no comparison whatsoever. Prostitution is part of the world of hard criminals, dodging rent increase laws is meaningless in comparison and would be a terrible waste of Garda time if they even could get involved.

athtrasna

Mod note

Take it to pm Arcade_Tryer and Nox001, you've gone way off topic.

Laois_Man

The_Conductor wrote: »

The 75% remaining should be plenty for landlords to pay whatever costs they have- management charges, mortgages etc etc

There are many cases where 100% of the rental income doesn't cover the mortgage alone, never mind other costs.

TheChizler

Laois_Man wrote: »

There are many cases where 100% of the rental income doesn't cover the mortgage alone, never mind other costs.

I've never understood why the rental income should cover the mortgage. In the case of investors they're getting a mortgage for the property, the tenants are paying the mortgage for them, then they sell the property in all likelyhood at a large markup from the purchase price. It's a little simplistic, but over the course of 30 years they're getting roughly a 3-5x return on investment if the rent just covered mortgage and costs alone, more if they're profiting over that, especially with the crazy increases in rent the last few years.

Why would it be unreasonable to treat investment in property like a pension fund, where you're constantly contributing over the years (or topping up the mortgage) and still making a reasonable return at the end?

athtrasna

TheChizler wrote: »

I've never understood why the rental income should cover the mortgage. In the case of investors they're getting a mortgage for the property, the tenants are paying the mortgage for them, then they sell the property in all likelyhood at a large markup from the purchase price. It's a little simplistic, but over the course of 30 years they're getting roughly a 3-5x return on investment if the rent just covered mortgage and costs alone, more if they're profiting over that, especially with the crazy increases in rent the last few years.

Why would it be unreasonable to treat investment in property like a pension fund, where you're constantly contributing over the years (or topping up the mortgage) and still making a reasonable return at the end?

Mod note
Again this is off topic. Start a new thread if you want to discuss this please.

mrslancaster

Have been reading back through this thread trying to understand the new rules for rent increases in RPZ.
Could someone explain why the 90 day notice is not issued until after the end of the current period / lease?

Is this an example of how it should work:

Tenant moves in Jan 2017 at rent 1000pm.
When first year finished, LL issues 90 day notice of 4% increase as permitted under new rules.
New rent takes effect in April 2018 so the original rent is actually in place for 15 months
90 day notice Jan 18 - new rent 1040pm from Apr18 to Jun19 so new rent is in place for 15 months
90 day notice Apr19 - new rent 1081.60pm from July19 to Sep20 - 15 months
90 day notice July20 - new rent 1124.86pm from Oct20 to Dec21 - 15 months

How is that a 4% annual increase? Is it not allowed to be 4% for each year after the first year - 2018, 2019, 2020 and 2021.

Any help appreciated

emeldc

mrslancaster wrote: »

Have been reading back through this thread trying to understand the new rules for rent increases in RPZ.
Could someone explain why the 90 day notice is not issued until after the end of the current period / lease?

Is this an example of how it should work:

Tenant moves in Jan 2017 at rent 1000pm.
When first year finished, LL issues 90 day notice of 4% increase as permitted under new rules.
New rent takes effect in April 2018 so the original rent is actually in place for 15 months
90 day notice Jan 18 - new rent 1040pm from Apr18 to Jun19 so new rent is in place for 15 months
90 day notice Apr19 - new rent 1081.60pm from July19 to Sep20 - 15 months
90 day notice July20 - new rent 1124.86pm from Oct20 to Dec21 - 15 months

How is that a 4% annual increase? Is it not allowed to be 4% for each year after the first year - 2018, 2019, 2020 and 2021.

Any help appreciated

Each new rent review can be issued 12 months after the last rent review ( not after the last increase) so each review should be issued on the same day each year. You only 'lose out' on the first review. I think I have that right.

mrslancaster

emeldc wrote: »

Each new rent review can be issued 12 months after the last rent review ( not after the last increase) so each review should be issued on the same day each year. You only 'lose out' on the first review. I think I have that right.

Thanks for your reply - so in the example, the first 90 day notice of a rent increase is issued in Jan 2018 to take effect in April 2018. Any further review can be issued in Jan 2019, 2020 etc. so rent would increase in April each year. is that right?

emeldc

mrslancaster wrote: »

Thanks for your reply - so in the example, the first 90 day notice of a rent increase is issued in Jan 2018 to take effect in April 2018. Any further review can be issued in Jan 2019, 2020 etc. so rent would increase in April each year. is that right?

Yep, that's my understanding of it.

dogbert27

Hi,

I first rented my property in August 2015 and I have not raised the rent in that time.

Do I have to wait until August (2 years) to give 3 months notice of intended rent increase or can I give the notice on the 01st of May that the rent will increase on August 01st?