Becoming a landlord (Advice from experienced landlords needed)

Troy McClure

We have what used to be our family home in Dublin. A 3 bed terraced house. We have decided to rent it out and become landlords as we need the income. We have read a lot of horror stories about been a small landlord, and if reading in the media was to educate you as to landlords, then been a drug dealer probably commands more respect in the current climate.

Anyway, we are looking for advice from experienced responsible landlords, as to the must do's and must not do's. The PRTB were pretty unhelpful and would put you off the idea tbh.

Whats the best way to try get a solid tenant? What should you ask for? and what checks to make. Where do we get a good lease document from? How much deposit should we ask for? Anything else to keep in mind?

Any advice welcome relevant to spirit of our questions.
Thanks

Gumbo

Troy McClure wrote: »

We have what used to be our family home in Dublin. A 3 bed terraced house. We have decided to rent it out and become landlords as we need the income. We have read a lot of horror stories about been a small landlord, and if reading in the media was to educate you as to landlords, then been a drug dealer probably commands more respect in the current climate.

Anyway, we are looking for advice from experienced responsible landlords, as to the must do's and must not do's. The PRTB were pretty unhelpful and would put you off the idea tbh.

Whats the best way to try get a solid tenant? What should you ask for? and what checks to make. Where do we get a good lease document from? How much deposit should we ask for? Anything else to keep in mind?

Any advice welcome relevant to spirit of our questions.
Thanks

Do you have a loan on the property?
Will this be your main income or do you have another full time job?
When you say, you want to earn an income, what do you need to get out of it?
Where will you live?

Troy McClure

We both work and we now live an hour from Dublin, although I am in Dublin a lot with work. I am self employed. My wife is now part time. We do have a mortgage on it. But I bought the house 18 years ago and have a tracker on it.

Sleeper12

There are horror stories but there are also landlords in the business decades that haven't had anything nasty happen. Most properties haven't had tenants from hell.

You must treat it as a business. You can be friendly with the tenants but someone on your team needs to tough at times too. You need references from past landlords, employers and bank statements if you can get them. Card statements tell a lot about someone. Living month to month on credit in not going to be a great tenant. The deposit is very important. The more you hold the less likely that you will become a horror story. You want a month's rent in advance & minimum of two months deposit. Many landlords are getting three months deposit. If you want to charge less rent then the going rent then you should charge even more deposit. Very high deposits put off HAP tenants and most, well a lot, of landlords don't want HAP.

utmbuilder

Know your tax before hand revenue are not messing around at all now and want it no matter what. It will be 50% of the rent.

Make sure you cAn cover the mortgage yourelf for minium of 6 months without it ruining you. This is a minimum for the risk.involved.

If the tennant doesnt pay for 18 months no one will care and little but the long drawn out rtb process begins.

Letting Management would be very usful for you <snip> is who I use

As the other poster said bank statements paying for gas esb sky, without bouncing. A job address etc

Samuel T. Cogley

I got some good advice here:

https://www.boards.ie/vbulletin/showthread.php?t=2057922584

Gumbo

Troy McClure wrote: »

We both work and we now live an hour from Dublin, although I am in Dublin a lot with work. I am self employed. My wife is now part time. We do have a mortgage on it. But I bought the house 18 years ago and have a tracker on it.

Then my opinion is that you wont earn an income from it.
After taxes and costs, it the rent covers the running of the rental, then you are one of the lucky ones.

I would consider myself one of the lucky ones as in I don't have to put any of my own money into the property, my rent covers everything including the tax bill, but all it takes in one disaster to change that.

If its an income you are looking for then I don't think renting will provide that based on both of you already working full time.

wowy

Troy McClure wrote: »

We both work and we now live an hour from Dublin, although I am in Dublin a lot with work. I am self employed. My wife is now part time. We do have a mortgage on it. But I bought the house 18 years ago and have a tracker on it.

If you rent it out and the bank find out you risk losing your tracker.

If you rent it out, your existing homeowner insurance won't be valid, you'll need landlord cover - does your existing provider offer that?

As it's your PPR it's currently exempt from CGT (if applicable) - if you rent it out, the number of years it's rented out will be considered as investment, and you'll be charged CGT on that proportion (e.g. if you sell in 2 years, then 2 years renting/20 years ownership = 10% of gain will be taxable). Consider purchase price and current value. Do you intend to eventually sell?

Does the place comply with Minimum Standards for Rental Accommodation? These standards would generally be higher than what you might find in a long-term owner-occupied property. If not, what works are required?

ted1

Troy McClure wrote: »

We both work and we now live an hour from Dublin, although I am in Dublin a lot with work. I am self employed. My wife is now part time. We do have a mortgage on it. But I bought the house 18 years ago and have a tracker on it.

Keep the box room and let the other two rooms as licensee basis. You’ll have more protection and a place to stay if working late. Or you can Air b n b that room

Xterminator

look into the long term leasing initiative with local council . gt 80-85% of market rental.

http://www.dublincity.ie/housing-and-community-i-own-my-home-section-rent-or-sell-your-property/long-term-leasing-initiative

they say

"Benefits Of Long Term Leasing:
Guaranteed Rental Income
No management of tenants
No rent or arrears collections
No maintenance of the residential property after the first six months of the lease
No requirement to register with the Residential Tenancy Board
No advertising or administration fee"

Takes the hassle out of it, if the sums work out .

strandsman

I'm selling my rental properties, I have a mortgage on them both, After I pay tax and expenses there's nothing left. Complete waste of time unless you fully own the property then you might earn a few bob from it. My plan was to use these to provide for a pension but I reckon if I put in to my pension what the houses cost me every year I'll be comfortable when I retire. Talk to an accountant because the tax take will be significant on increasing rental income and you will need to prepare to pay tax every November.

Graces7

Sleeper12 wrote: »

There are horror stories but there are also landlords in the business decades that haven't had anything nasty happen. Most properties haven't had tenants from hell.

You must treat it as a business. You can be friendly with the tenants but someone on your team needs to tough at times too. You need references from past landlords, employers and bank statements if you can get them. Card statements tell a lot about someone. Living month to month on credit in not going to be a great tenant. The deposit is very important. The more you hold the less likely that you will become a horror story. You want a month's rent in advance & minimum of two months deposit. Many landlords are getting three months deposit. If you want to charge less rent then the going rent then you should charge even more deposit. Very high deposits put off HAP tenants and most, well a lot, of landlords don't want HAP.

Should you be advising to break , or bend the law? Illegal to discriminate against HAP people. Not mandatory to give statements

Misguided1

HAP tenants shouldn't be disregarded. Guaranteed monthly payment from the state rather than the tenants themselves. Takes a few weeks to set up but never had a problem with it and the tenants were fantastic.

TheChizler

strandsman wrote: »

I'm selling my rental properties, I have a mortgage on them both, After I pay tax and expenses there's nothing left. Complete waste of time unless you fully own the property then you might earn a few bob from it. My plan was to use these to provide for a pension but I reckon if I put in to my pension what the houses cost me every year I'll be comfortable when I retire. Talk to an accountant because the tax take will be significant on increasing rental income and you will need to prepare to pay tax every November.

It's paying off the capital and interest is it not? Wouldn't you sell them as needed when you retire and that goes towards the retirement fund?

Claw Hammer

TheChizler wrote: »

It's paying off the capital and interest is it not? Wouldn't you sell them as needed when you retire and that goes towards the retirement fund?

If using rental properties as a pension it makes more sense to keep them as long as possible into retirement. A person retiring from normal work would usually be well able to keep some rental properties going. If the loans are paid off the rental income will be quite good. If the properties are sold and invested the return will be very low and may well produce a lower income.

TheChizler

Claw Hammer wrote: »

If using rental properties as a pension it makes more sense to keep them as long as possible into retirement. A person retiring from normal work would usually be well able to keep some rental properties going. If the loans are paid off the rental income will be quite good. If the properties are sold and invested the return will be very low and may well produce a lower income.

Exactly. I said as needed, once the mortgage is paid off the income might be enough without selling immediately.

endacl

If you’re in Dublin for work I’d be inclined to use it as a residence and rent the rooms under licensee agreements. You’re not taking on tenants then and some of the aforementioned complications don’t arise.

jim-mcdee

Troy McClure wrote: »

We have what used to be our family home in Dublin. A 3 bed terraced house. We have decided to rent it out and become landlords as we need the income. We have read a lot of horror stories about been a small landlord, and if reading in the media was to educate you as to landlords, then been a drug dealer probably commands more respect in the current climate.

Anyway, we are looking for advice from experienced responsible landlords, as to the must do's and must not do's. The PRTB were pretty unhelpful and would put you off the idea tbh.

Whats the best way to try get a solid tenant? What should you ask for? and what checks to make. Where do we get a good lease document from? How much deposit should we ask for? Anything else to keep in mind?

Any advice welcome relevant to spirit of our questions.
Thanks

Many prefer to DIY, but I always use an agent. Then instead of vetting tenants, vet agents. I found a very good one that finds me brilliant tenants. Many do not want to pay the 15-20% commissions but for me its worth it and then some.

Del2005

Misguided1 wrote: »

HAP tenants shouldn't be disregarded. Guaranteed monthly payment from the state rather than the tenants themselves. Takes a few weeks to set up but never had a problem with it and the tenants were fantastic.

The money isn't guaranteed from the state. It's paid only if the tenant pays their part to the local authority and if the tenant stops paying the local authority then the 1st you know is when the money doesn't show up in your account. Then you can't get any information from the local authority because of data protection laws.

That and it's paid in arrears when all rental contracts are in advance should be enough to put a potential landlord off HAP, the council's insisting that the premises has to meet current building regulations not the regulations from when it was built makes it even less attractive.

Gumbo

Del2005 wrote: »

The money isn't guaranteed from the state. It's paid only if the tenant pays their part to the local authority and if the tenant stops paying the local authority then the 1st you know is when the money doesn't show up in your account. Then you can't get any information from the local authority because of data protection laws.

That and it's paid in arrears when all rental contracts are in advance should be enough to put a potential landlord off HAP, the council's insisting that the premises has to meet current building regulations not the regulations from when it was built makes it even less attractive.

Not current Building Regulations, current rental Regulations.
Big difference. Window destructors etc are a health and safety add on too which is welcome.

Bobtheman

My strongest adivce is to hire a letting agent who does this as living. You can write off 40% of the cost against tax. I would recommend <snip>. I'm not a shareholder.

Troy McClure

Many thanks for all your answers and especially those who read our questions. Without getting answers off topic we are particularly interested in the below questions.
Whats the best way to try get a solid tenant? What should you ask for? and what checks to make. Where do we get a good lease document from? How much deposit should we ask for?

tvjunki

Troy McClure wrote: »

Many thanks for all your answers and especially those who read our questions. Without getting answers off topic we are particularly interested in the below questions.
Whats the best way to try get a solid tenant? What should you ask for? and what checks to make. Where do we get a good lease document from? How much deposit should we ask for?

Find tenant

Solid tenant...you could have a good tenant and become bad at a later stage.
Get a pay as you go SIM card so chat to the potential tenant. If you want to find the tenant yourself then advertise on daft and email only contact. Create a new email as you will be inundated with people pleading their cases and dont get caught up with this type of tenant as they will cost you money and time.

Ask for 2months deposit and one month rent. deposit is there in case they run off not paying your rent or damaging the house. Say no pets as when they leave you may have to get someone in to scrub the house as your new tenants could have allergies.

Facebook is your friend to help you weed out the party goers etc.search their profiles and check their friends. You want a tenant that will not cause you problems with anti social behaviour. So surprising when you get a request from a quiet family and you see drugs parties each weekend pets.

Ask for copies or references bank statements I d such as passport. You will need pp s n as well. Don't take the lastest reference as it could be a landlord trying to ge them out. Check the 2 and 3 rd. make sure you ring the references meet the tenants. They have to fit in with neighbours.
Check their bank account and see if they can afford the house. Check where they spend ther money and you will be able to see what rent they have been paying.

Try to keep your distance and once they are late with rent send text and notice in the post. They will keep on top of it.

Have a list of tradesmen to hand in case you get a call with problem. Learn how to fix things yourself.

Type up an inventory and take pictures with the daily paper the day before they move in. Print off on a4 with address and time on each page. Make sure they sign each page of the inventory.

Make sure you know how to fix things.
I had one tenant say the washing machine was broke. Went over to find she did not clean the filter and they tried to break the washing cycle. Reset it by switching it off unplug replug press on. Make an instruction booklet for how to use heating etc.
Check rtb for the legal way to notify late payment.

Do not give a lease. Reason is I found out from citizens information if they have a lease in place and you need to sell they become part of the house until their lease is up. Your house will devalue as only cash buyers will be able to buy your house with a tenant in it.

The first 6 months you can give notice without any reason. After 6months they can stay in the property for 6years so make sure you are happy with them.

Read rtb notes and read cases and outcomes to help you understand the ins and outs if things go wrong.

tvjunki

If you give a lease say a month by month type then make sure you put in a breakout clause on the second or thirds page that the landlord can use the right to give notice under the residential tenancies act. The notice period will be in line with residential tenancies act.
If there is no lease in place then you can give notice based on the act otherwise the tenant can stay longer. Better for you.

Maybe give only a 5and a half months lease and you can take it from there.