6 year tenants leaving new rules of letting out house

redcard

Hi there,
I'm a small time landlord (1 house Dublin 22).
tenants are moving out after 6 years, they were great tenants and i never increased the rent over this period as they looked after my property so well and never caused a bit of bother. now laws have changed and I will end up re letting the house 600 euro below market value! is there no way around this?

also whats the ask these days regarding references, potential tenants info ect? I read somewhere on here you can ask for there bank statement to see if they can afford rent??

also do I give lease or no lease? if there is no lease what affect can that have on me?

Ive a million questions but that a start

thanks in advance

tvjunki

If you do substantial refurbishment then you can increase to market rent. Anything to improve energy efficiency will help but you may have to spend around 7-10k.
What you can do is not give a lease which means you can give notice at anytime in the first 6months or under certain rules. After 6months they can stay under the 6 years but you can still give notice for refurb or you or a family member is moving. If no lease you give the required notice or if they are in arrears you can ask them to leave.
You can use the rtb to work out your allowed increase and take it from there.
See doing tenants a favour does not help landlords in the end. Make sure you keep increasing the max allowed as you can be stung further.
Read up on rtb.

redcard

thanks for that, its so true sometimes you can be too nice, even if i had increased by a small amount yearly id be in a better position now. look ill live and learn hopefully good karma will come back at me and ill get another excellent tenant!

utmbuilder

There should be grants available for energy upgrades

Talk to <snip>

CrookedJack

redcard wrote: »

thanks for that, its so true sometimes you can be too nice, even if i had increased by a small amount yearly id be in a better position now. look ill live and learn hopefully good karma will come back at me and ill get another excellent tenant!

I don't get why you think you've been hard done by, you can still increase by a reasonable amount. You just can't make an obscene increase. so for example if you were charging €800 a month, and haven't increased in 6 years you can charge 800*(1+0.04*72/12), or €992. that's a 24% increase which is perfectly reasonable.

I mean if you were happy to take the lower rent, and now you get to charge significantly more, shouldn't you be even happier?

You're acting like you losing out, but you'll be getting more than you were.

Graham

CrookedJack wrote: »

€992. that's a 24% increase which is perfectly reasonable.

Unless the market rate for the area is €1,300 in which case the OP is effectively being punished to the tune of around €5k/year for being nice to his previous tenants.

pc7

I’m not encouraging rule breaking but querying are there checks by rtb on this?

If landlord was to rent at market rate, tenants happy with that rate, is there follow through? Eg do rtb call, check if refurb etc done?

Old diesel

Graham wrote: »

Unless the market rate for the area is €1,300 in which case the OP is effectively being punished to the tune of around €5k/year for being nice to his previous tenants.

The difference pre tax between the 992 and 1300 is 3696 per year.

That's pre tax.

If tax is 50 percent then the net loss is 1848 as he would be down 50 percent of the extra 3696 in tax were he able to charge the 1300.

Which in itself shows how problematical the tax system is.

The issue with below market rates is still a problem as it would take 7 years to get to 1300 with yearly increases of 4 percent.

CrookedJack

Graham wrote: »

Unless the market rate for the area is €1,300 in which case the OP is effectively being punished to the tune of around €5k/year for being nice to his previous tenants.

But he's not being punished. he's making more money, he's in a better situation than the previous one, which he was content with.

Graham

CrookedJack wrote: »

But he's not being punished.

As a result of not raising the rent for the previous tenant the OP is:

• in a worse situation than he otherwise would have been
• in a worse position than similar landlords who had increased rent at every opportunity.
• stuck in that worse position for the foreseeable future.

Call it what you like but it's not exactly a reward is it?

CrookedJack

Graham wrote: »

As a result of not raising the rent for the previous tenant the OP is:

• in a worse situation than he otherwise would have been
• in a worse position than similar landlords who had increased rent at every opportunity.
• stuck in that worse position for the foreseeable future.

Call it what you like but it's not exactly a reward is it?

It 24% of a reward. if you were offered a 24% raise in work would you consider it a reward? Of course you would.

To portray an income increase of nearly a quarter as bad, simply because its not 62% is simply greedy. especially if op was content with charging the old rent.

tvjunki

pc7 wrote: »

I’m not encouraging rule breaking but querying are there checks by rtb on this?

If landlord was to rent at market rate, tenants happy with that rate, is there follow through? Eg do rtb call, check if refurb etc done?

Yes there is checks done.
A tenant could pay your new rent and after a year then check to find you overcharged. They then can bring you to rtb and claim over charging get a refund and then compensation.

The government have told landlords they have to tell tenants of previous rent even if it is not increased. Daft I know but one silly rule after another.

If you do refurb keep all bills and photos so you can prove you did the work.

tvjunki

redcard wrote: »

thanks for that, its so true sometimes you can be too nice, even if i had increased by a small amount yearly id be in a better position now. look ill live and learn hopefully good karma will come back at me and ill get another excellent tenant!

I agree. You look after your tenant in hope they will look after you. No one complained when landlords rent slashed to nothing.
I read somewhere the big landlords are increasing rents above the 4% and nothing said.

Just make sure you do your checks.

Graham

CrookedJack wrote: »

It 24% of a reward. if you were offered a 24% raise in work would you consider it a reward? Of course you would.

You'd be happy receiving 60% of market rate for your job with the promise of 4% annual increases?

To each their own.

This is all rather off topic anyway. There's a reasonable chance anyone in the OPs position will decide the limited returns either warrant a substantial change in nature of the property or a change in investment plans.

tvjunki

utmbuilder wrote: »

There should be grants available for energy upgrades

Talk to <snip>

Sometimes it is better not to use the grant system. You get a grant for upgrading heating and something from esb for the carbon credits if you are with them but...here's the 'but' you need to get a ber cert done before and after and you have to make sure you spend more than a certain amount.
Also you have to get the contractor to sign the form to say they did the work.

L1011

The Electric Ireland scheme is buying carbon credits off you. If you can combine it with the SEAI grants they really dilute the cost of the cert - but there is always the factor that non registered installers can be cheaper. A lot cheaper.

I got one of the last gas boiler installation grants before they changed to favour heat pumps and got the Electric Ireland one also which made a huge impact on the installation costs. But I was using a well recommended local installer when there were others cheaper - I could possibly have got the lot done cheaper by someone else but I had stayed local for other reasons

redcard

thanks for all the opinions advice and replies, short of converting the attic there's noting i could do to upgrade in order to charge market value rent. the house is in excellent condition and i got a new gas boiler put in recently at my own expense (no grant).
I was just a bit blind sided about the rent thing as it stands the house can rent for 1260 and the next door neighbour could potentially get 1850 if they were to rent out there's tomorrow. Its just a bit annoying but as someone said then id have to pay more tax ect! and I wouldn't be in favour of breaking any laws and charging what i like. lets hope i get another great tenant!

1874

redcard wrote: »

thanks for all the opinions advice and replies, short of converting the attic there's noting i could do to upgrade in order to charge market value rent. the house is in excellent condition and i got a new gas boiler put in recently at my own expense (no grant).
I was just a bit blind sided about the rent thing as it stands the house can rent for 1260 and the next door neighbour could potentially get 1850 if they were to rent out there's tomorrow. Its just a bit annoying but as someone said then id have to pay more tax ect! and I wouldn't be in favour of breaking any laws and charging what i like. lets hope i get another great tenant!

You could get insulation done externally, windows, doors and could claim for that under capital allowances? Or ask an accountant. Might also be able to claim vat back. Now that could be worth it financially as I understand you could charge market rate after significant renovations, but confirm.

mrslancaster

Could you get a local estate agent to give you a letter saying what the expected rent would be in the current condition and what it would be after the different upgrades before you do the work. Normal maintenance is not included even a new kitchen.

If you spend a lot of money it might not count as substantial refurbishment. check the RTB guide.