First time landlord in Dublin City

Manion

I'm in a position of becoming an "accidental landlord" and I'm somewhat lost as to where to start. The property is my old family home and I do not wish to sell it at this point in time. Various people have been giving me arm chair advise such as:

• Ask for 2 months rent as a deposit and rent in advance.
• Put into the lease a 4% rent increase year on year.
• Put clear break clauses in the lease.
• Ask for references which can be personally validated
• Don't use a letting agent
• Put a bed in the down stairs front room and turn it into a 4 bed rental.
• Don't put money into the property until it's rented so that it can be tax deductible.
• Channel rental income into a Pension fund to avoid income tax (seems legitimate)

What advise would you folks offer to a first time landlord?

antoinolachtnai

Manion wrote: »

I'm in a position of becoming an "accidental landlord" and I'm somewhat lost as to where to start. The property is my old family home and I do not wish to sell it at this point in time. Various people have been giving me arm chair advise such as:

• Ask for 2 months rent as a deposit and rent in advance.
• Put into the lease a 4% rent increase year on year.
• Put clear break clauses in the lease.
• Ask for references which can be personally validated
• Don't use a letting agent
• Put a bed in the down stairs front room and turn it into a 4 bed rental.
• Don't put money into the property until it's rented so that it can be tax deductible.
• Channel rental income into a Pension fund to avoid income tax (seems legitimate)

What advise would you folks offer to a first time landlord?

Get some professional advice and do some research.

There is some awful advice there really.

- First point re charging a big deposit - don’t see the point really. You can do this but you are going to put off some potentially well suited tenants.

- second suggestion re yearly rent increase. Pointless (unenforceable if not downright illegal)

- third suggestion re ‘break clause’. Essentially pointless and unenforceable. There is maybe one exception.

- forth suggestion re references, good advice. But don’t expect the HR person in the Department of Whatever to tell you much about your prospective tenant.

-fifth suggestion re estate agent. It really depends. The reality is that you don’t know much about what you are doing and some good quality professional support might be a good idea. Honestly, in some areas you could be a lamb to the slaughter. There are thousands of fine tenants out there but you need to be able to avoid the few really bad ones who everybody else is avoiding.

- sixth suggestion re extra bedroom. It really depends on the ‘positioning’ of the property and what you are trying to achieve. This is why an agent might be of benefit to you.

- tax deductibility by not spending any money pre-let. Nice idea in principle but is it actually practical? What kind of tenants would agree to this?

- pension. Not a bad idea but you really need professional advice on this.

One other suggestion. RTB now occasionally run a course about landlord obligations. I don’t know if it is any good, but I suggest you do this course if you get an opportunity. It will give you some awareness of the issues.

If you can find a friend who has experience of this you should beg them for your help.

Manion

Hi, could you outline what you mean by professional help? Who is a professional in this context?

Regarding deposit, the idea would be to limit exposure to tenants who cause property damage. While that may put off some tenants it seems to be a landlords market at the moment?

Could you explain why putting up rent by 4% year on year is potentially illegal and unenforceable. Following the guidance herehttps://onestopshop.rtb.ie/rent-pressure-zones/ it seemed perfectly legitimate (assuming it still at or under prevailing market rents). If the rent is increased within the RTB rules and the tenant can not afford it, is it not grounds for eviction?

For the pension thing I do plan to talk to an accounting as I'll have to get help with the tax return.

Regarding obligations, yes there is a lot of information available regarding this which I'm reading through.

antoinolachtnai

1. An estate agent is a professional who works in the field of renting property. I think that's what you need, as well as all the other preparation.

2. Are you planning on taking in really rough tenants? Really, the deposit isn't a deterrent and isn't that much use if things get really bad. The fact that an individual can get their hand on a big fistful of cash does not mean that he or she is not going to be a bad tenant. If you have a really bad tenant, the big deposit will just be used as a (groundless) justification to overhold for even longer. On the other hand, there are loads of excellent tenants. You want to get one of these.

3. You need to understand about the legal procedure. By putting a 4 percent increase into the lease as was suggested to you, you would be effectively reviewing the rent a year or longer in advance in advance and setting the increases in advance, at the beginning of the tenancy. This is not permitted. The rent can only be reviewed after twelve months and again every twelve months thereafter. You have to follow the statutory procedure when you increase the rent, no matter what it says in the lease. And no matter what the lease says, you can carry out this review.

Don't be thinking that all rents go up every year. If the rent was set at quite a high level at the start, it may not go up for some time. Pushing up the rent to the edge is not necessarily a good idea. For an easy life as a landlord you want your tenants to stay for as long as possible.

Putting more words into the lease isn't necessarily going to give you more protection. If you write something stupid, maybe it could even weaken your position. If you want to write complex leases, then you need a solicitor, and that will cost you more money (and any funny stuff will probably get disregarded at adjudication or tribunal anyway if it is not exactly in line with the statutory rules for a tenancy).

4. No, if the tenant cannot afford the rent it is not 'grounds for eviction'. The process has a good few twists and turns before you get to evict anybody.

5. Really, try to talk to people who have done this before. Read as much as you can, but you really would benefit from talking to somebody face-to-face to learn about the practicalities. A lot of the information you find online can be about quite extreme situations and some of it is really not very helpful. The training events I mentioned would be an opportunity to meet people in a similar position to yourself, or who are a few years ahead of you.

4ensic15

Manion wrote: »

I'm in a position of becoming an "accidental landlord" and I'm somewhat lost as to where to start. The property is my old family home and I do not wish to sell it at this point in time. Various people have been giving me arm chair advise such as:

• Ask for 2 months rent as a deposit and rent in advance.
• Put into the lease a 4% rent increase year on year.
• Put clear break clauses in the lease.
• Ask for references which can be personally validated
• Don't use a letting agent
• Put a bed in the down stairs front room and turn it into a 4 bed rental.
• Don't put money into the property until it's rented so that it can be tax deductible.
• Channel rental income into a Pension fund to avoid income tax (seems legitimate)

What advise would you folks offer to a first time landlord?

Stop talking to those people, they are clueless.

Manion

antoinolachtnai wrote: »

1. An estate agent is a professional who works in the field of renting property. I think that's what you need, as well as all the other preparation.

...

Thank you.

Manion

4ensic15 wrote: »

Stop talking to those people, they are clueless.

Why is putting rent into a pension fund to avoid income tax a bad idea. It seems legitimate with multiple accounting firms offering support in administration of such funds.

Caranica

You don't want to sell but the only advice I can give as someone who has been there is sell, sell, sell. If in doubt, sell.

I truly wouldn't recommend renting your property to my worst enemy. See the front page of todays indo for one of so many reasons

antoinolachtnai

Manion wrote: »

Why is putting rent into a pension fund to avoid income tax a bad idea. It seems legitimate with multiple accounting firms offering support in administration of such funds.

Because it is directionless, meaningless advice. It is not a particularly important consideration in relation to your rental venture.

It would be a good idea for you to contribute the maximum possible amount to the pension fund no matter what your source of funds, if you want to minimise your tax exposure.

There are specialised setups which allow you to have rental property within your pension (i.e., the money is invested in the building, rather than in a managed fund) and this may or may not work in your situation (though quite likely not). This is a situation specialised advisers will give advice about. But this is different from what you have been advised to do.

Pkiernan

Revenue does not consider rental income as pensionable.

Hard to believe, but true.

jimmy456

Pkiernan wrote: »

Revenue does not consider rental income as pensionable.

Hard to believe, but true.

Why is it so hard to believe? The whole idea of a pension is to replace earned income?! Why should passive income be pensionable?

OP, you won't be able to make this income an asset of your pension. In order to do so your pension would have to purchase the property from you. This would be self dealing and is against pension rules.

You could use the cash build up from the rental to make contributions against your employment income but this won't have the same benefit.

GarIT

You're stuck with whatever rent you set when you start out forever so start €1k a month higher than you expect to get and reduce the price slowly until you find someone now that rent is locked in at the base that you can add your 4% increments onto.

circular flexing

GarIT wrote: »

You're stuck with whatever rent you set when you start out forever so start €1k a month higher than you expect to get and reduce the price slowly until you find someone now that rent is locked in at the base that you can add your 4% increments onto.

And then have them leave when they find somewhere cheaper? The poster above is correct in that setting the rent slightly below what market is will help keep longer term tenants which as an accidental landlord is exactly what you want. Vacancy means lost income and more hassle.


In general though, selling up is the best advice. The market is good right now and being a landlord is a mug's game.

4ensic15

Manion wrote: »

Why is putting rent into a pension fund to avoid income tax a bad idea. It seems legitimate with multiple accounting firms offering support in administration of such funds.

Look at this.
https://www.davy.ie/market-and-insights/insights/financial-planning-insights/2017/solid-reasons-to-consider-investing-your-pension-in-property.html

As you would expect, there are strict Revenue rules around investing in property through a pension. In the first instance, you cannot invest in a property that you yourself own or one that is owned by anyone ‘connected’ to you (e.g. an employer or relative). Similarly, you cannot then sell the property to a connected person (including yourself).

LotharIngum

4ensic15 wrote: »

Look at this.
https://www.davy.ie/market-and-insights/insights/financial-planning-insights/2017/solid-reasons-to-consider-investing-your-pension-in-property.html

As you would expect, there are strict Revenue rules around investing in property through a pension. In the first instance, you cannot invest in a property that you yourself own or one that is owned by anyone ‘connected’ to you (e.g. an employer or relative). Similarly, you cannot then sell the property to a connected person (including yourself).

That's not what he is talking about and is not relevant to what he suggested.

But anyway OP.
Why not speak to people you know who have let property over the years and ask them. I bet you will find that most of them are out now and of the ones that are left they will be getting out at the first opportunity. You wont find very many intelligent people getting into property rental now unless they are a REIT.
Its just pure madness.

3DataModem

OP, my 2c is that if it is a house, use a letting agent, so you never have to be called about leaks, broken stuff, etc.

The_Conductor

I'd seriously suggest you sit down and think out the pros and cons of this.
It may be your family home now- however, once you've rented it- it becomes the tenant's home- you are never ever going to get it back in the condition you leave it to them- and if you have bad tenants, any relationship with neighbours is gone forever.

The only sane advice- given that Dublin prices have peaked- is to sell and lock in your capital.
If you really want exposure to the rental market- buy shares in a REIT.

The current regulatory regime is toxic for small scale landlords- and is only going to get worse (have a look at some of the proposed legislation being discussed in this forum).

Being a landlord is not for the faint hearted- it can be incredibly time consuming- and particularly in the case of a property you have an emotional attachment to- it simply is a recipe for a head wreck.

I'd strongly suggest selling ASAP.

Pkiernan

The_Conductor wrote: »

I'd seriously suggest you sit down and think out the pros and cons of this.
It may be your family home now- however, once you've rented it- it becomes the tenant's home- you are never ever going to get it back in the condition you leave it to them- and if you have bad tenants, any relationship with neighbours is gone forever.

The only sane advice- given that Dublin prices have peaked- is to sell and lock in your capital.
If you really want exposure to the rental market- buy shares in a REIT.

The current regulatory regime is toxic for small scale landlords- and is only going to get worse (have a look at some of the proposed legislation being discussed in this forum).

Being a landlord is not for the faint hearted- it can be incredibly time consuming- and particularly in the case of a property you have an emotional attachment to- it simply is a recipe for a head wreck.

I'd strongly suggest selling ASAP.

Best advice of the thread so far.

Being a private landlord is very onerous now, especially for people new to it.

Manion

All the quoted advice came from one or other of two landlords I currently know in Dublin.

4ensic15 wrote: »

Look at this.
https://www.davy.ie/market-and-insights/insights/financial-planning-insights/2017/solid-reasons-to-consider-investing-your-pension-in-property.html

As you would expect, there are strict Revenue rules around investing in property through a pension. In the first instance, you cannot invest in a property that you yourself own or one that is owned by anyone ‘connected’ to you (e.g. an employer or relative). Similarly, you cannot then sell the property to a connected person (including yourself).

This actually was what I was referred to by other landlords. It seems based on the link I cannot actually use it as It has to be a new property no one I already own?

The_Conductor wrote: »

I'd seriously suggest you sit down and think out the pros and cons of this.
It may be your family home now- however, once you've rented it- it becomes the tenant's home- you are never ever going to get it back in the condition you leave it to them- and if you have bad tenants, any relationship with neighbours is gone forever.

The only sane advice- given that Dublin prices have peaked- is to sell and lock in your capital.
If you really want exposure to the rental market- buy shares in a REIT.

The current regulatory regime is toxic for small scale landlords- and is only going to get worse (have a look at some of the proposed legislation being discussed in this forum).

Being a landlord is not for the faint hearted- it can be incredibly time consuming- and particularly in the case of a property you have an emotional attachment to- it simply is a recipe for a head wreck.

I'd strongly suggest selling ASAP.

I've read a fair few of your posts on this form so I'm inclined to believe you know what you're talking about. I've struggled to find a way to make the numbers work and make it worth the time and effort. The property would have an expected monthly rental income of 2500 to 2750 Euro a month based on very similar properties locally. That is both an extraordinary sum of Money and also one that doesn't really seem to justify the hassle given:

• Tax
• Insurance
• Building costs to get up to code
• Accounting costs
• Letting Agent costs
• Maintenance costs.

My concern is that it does not seem really possible to dip your toe into the Rental market. I could find it extremely difficult to extricate myself from it. Reading the threads here on the new legislation is scary. If I renovate the property a year from now, I could be legally obliged to sell or re-rent the property at times that would be very inconvenient time or at a slump in the market.

At the end of the day this was my family home, I grew up in the house. It's extremely difficult for me to think of it in financial terms. I feel morally conflicted with the idea of leaving the property vacant while there is a housing crisis in the heart of the capital. Equally I'm not under a financial pressure to sell now as I have my own home with a small mortgage and decent job. I was happy enough to think of this as my "retirement fund" 30 years from now. It would be nice if I could put the property to work in the intermediate period.

Cal4567

Agreeing totally with The_Conductor, the days of the small time landlord are behind us. I would buy shares in a REIT looking at where we are going with rent as against home ownership, as a society.

You could sell to a first time buyer.

overkill602

Go into daft search for a house to rent in dublin there are none reason LLs have gone sold up....
A close relative of mine has just stuck 2 daughters in each of there two houses for rent to share with others from college on advice, they consider the market to risky with what the damn idiot politicians are doing with the rental market.
You could lose your house have it trashed be stressed out sell the damn property it too risky the future could be left with an indefinite tenant and a valuation well below market.
see that shower of entitled scroungers marching they are demanding free or subsidized housing from the tax payer.

4ensic15

LotharIngum wrote: »

That's not what he is talking about and is not relevant to what he suggested.

.

What is he talking about. What did he suggest?

The_Conductor

4ensic15 wrote: »

What is he talking about. What did he suggest?

The OP has multiple posts in the thread- less of the antagonism towards other posters please.

ImARebel

Letting agent all the way. We used a local one (Dublin 10/12) and he's got us excellent tenants, one stayed 6+ years and another is there since they moved out, they are now there over 5 years.

If you're thinking of letting I'd strongly recommend using one. Their local knowledge is invaluable (he knew the guerriers in the area, knew they'd turn up with a fist full of cash to the viewing but also knew that they weren't worth the headache).

So my advice if you decide to go down that route is def use one. They also offered a management service which we considered but in the end didn't bother with.

Also I think we're in the minority, we've had great tenants, minimum hassle and it's paying for itself. I make the tax returns (nothing to it - using ROS offline, I got an accountant to show me how to do it once)

Hoping I'm not jinxing myself here by saying we've been lucky.

But on both occasions it's been down to getting the right tenant. And that was down to the letting agent.

So that would be my top tip if you decide to go for it.

beauf

circular flexing wrote: »

And then have them leave when they find somewhere cheaper? The poster above is correct in that setting the rent slightly below what market is will help keep longer term tenants which as an accidental landlord is exactly what you want. Vacancy means lost income and more hassle.


In general though, selling up is the best advice. The market is good right now and being a landlord is a mug's game.

If anything lower rents attracts worst tenants not better ones.

It's very likely the govt will freeze all rents. Makes no sense to be stuck on lower rent. Anyone who did this got shafted. The govt shows all indications they will do the same again.

Being stuck on a lower rent also means you devalue the property as no one else will want it as a rental if you want to sell. It will make it harder to sell also. If indeed you are allowed to sell. The govt is trying to find ways to block that also.

If you have money that you won't need for the next 6yrs. It's as good a gamble as anything else. With a decent income. Unless anything dramatic happens.

antoinolachtnai

Manion wrote: »

All the quoted advice came from one or other of two landlords I currently know in Dublin.

Sure, but it's not really all that helpful. There's nuggets of truth there, but it doesn't provide a useful overall picture. Would any of these people sit down with you and help you plan this and do some viewings with you?

This actually was what I was referred to by other landlords. It seems based on the link I cannot actually use it as It has to be a new property no one I already own?

You are talking about constructing quite a sophisticated tax setup. There is a lot to it.

I've read a fair few of your posts on this form so I'm inclined to believe you know what you're talking about. I've struggled to find a way to make the numbers work and make it worth the time and effort. The property would have an expected monthly rental income of 2500 to 2750 Euro a month based on very similar properties locally. That is both an extraordinary sum of Money and also one that doesn't really seem to justify the hassle given:

• Tax
• Insurance
• Building costs to get up to code
• Accounting costs
• Letting Agent costs
• Maintenance costs.

You should be able to sort that out for 30 grand a year, to be honest.

But this is not easy money. It is an opportunity to work hard to invest, for you and your children's future.

My concern is that it does not seem really possible to dip your toe into the Rental market.

That is correct. It is not possible. It never really was. You are never going to make much money in property in the first year or two, even if you get the property more or less for free. It is not easy money. Invest for the long term, or forget about it.

At the end of the day this was my family home, I grew up in the house. It's extremely difficult for me to think of it in financial terms. I feel morally conflicted with the idea of leaving the property vacant while there is a housing crisis in the heart of the capital. Equally I'm not under a financial pressure to sell now as I have my own home with a small mortgage and decent job. I was happy enough to think of this as my "retirement fund" 30 years from now. It would be nice if I could put the property to work in the intermediate period.

Please don't leave this valuable home vacant. Rent it, or sell it to someone who needs it and invest the money in something you are in a position to manage.

ednwireland

if it is your old family home is upto the current building regs for renting ?

http://www.irishstatutebook.ie/eli/2017/si/17/made/en/print

also do you have a BER ?

Floppybits

The_Conductor wrote: »

I'd seriously suggest you sit down and think out the pros and cons of this.
It may be your family home now- however, once you've rented it- it becomes the tenant's home- you are never ever going to get it back in the condition you leave it to them- and if you have bad tenants, any relationship with neighbours is gone forever.

The only sane advice- given that Dublin prices have peaked- is to sell and lock in your capital.
If you really want exposure to the rental market- buy shares in a REIT.

The current regulatory regime is toxic for small scale landlords- and is only going to get worse (have a look at some of the proposed legislation being discussed in this forum).

Being a landlord is not for the faint hearted- it can be incredibly time consuming- and particularly in the case of a property you have an emotional attachment to- it simply is a recipe for a head wreck.

I'd strongly suggest selling ASAP.

Best advice on here. OP you are best of selling. Its not worth that hassle being a LL. The government have made it clear they do not want small LL.

Claw Hammer

A lot depends on where exactly the house is, what condition it is in and how good the o/p would be at managing it. One landlord I know is doing room by room lettings to post grad students. The place is very near a 3rd level campus. He keeps it ticking over and has a good income with no hassle. Not every house or location suits this type of arrangement.
As for break clauses. In a residential lease! WTF.

km991148

You are not an "accidental landlord" you are choosing to enter the landlord business.

Like any new business venture speak to the required professionals - an accountant at least for tax deductions and pension planning and a number of letting agents for quotes/prices etc.

Compare the services of both. i.e. shop around accountants and rental agents.

Claw Hammer

km991148 wrote: »

You are not an "accidental landlord" you are choosing to enter the landlord business.

Like any new business venture speak to the required professionals - an accountant at least for tax deductions and pension planning and a number of letting agents for quotes/prices etc.

Compare the services of both. i.e. shop around accountants and rental agents.

I didn't think accountants were allowed advise on pension planning. In any case the o/p will need some qualifying income income i order to consider it.

km991148

Claw Hammer wrote: »

I didn't think accountants were allowed advise on pension planning. In any case the o/p will need some qualifying income income i order to consider it.

Whatever - even more reason to seek out the correct professions and not take random pub/internet advice!

But yes there is a difference between pension planning and paying for advice and different people are allowed to provide difference services. Accountants will know what options are available, but cannot give advice.

Manion

OK, so the plan is to engage a Letting agent to see in detail what my options are and proceed from there. I'm also speaking to a tax specialist to understand what the implications are and what the real earning potential is.

ednwireland wrote: »

if it is your old family home is upto the current building regs for renting ?

http://www.irishstatutebook.ie/eli/2017/si/17/made/en/print

also do you have a BER ?

It's very close to the current regulations, Safety latches would be needed on the upstairs windows, carbon monoxide alarms etc. Beyond that just painting and decorating. There is no BER cert, so that's another thing I would need to get.

antoinolachtnai wrote: »

Please don't leave this valuable home vacant. Rent it, or sell it to someone who needs it and invest the money in something you are in a position to manage.

Surely leaving vacant is the best option if I take at face value all the advice of this thread? I've an extremely high pressure day job working for a multinational and family commitments which are way more valuable to me than a few Euro. I'm not really willing to let this take over my life. I just don't believe now is a good time to sell given the close proximity to the Dublin docklands. Even if the bottom does fall out of the property market, I don't really mind sitting on it for 10-20 years.

Morally I find the idea of leaving it vacant repugnant but financially I don't really see the risk reward paying out yet. If it's government policy to force part time landlords out of the Market (which may or may not be a good idea at the Macro level), I'm under no obligation to sell an asset I believe will appreciate in value over time.

Claw Hammer

Manion wrote: »

OK, so the plan is to engage a Letting agent to see in detail what my options are and proceed from there. I'm also speaking to a tax specialist to understand what the implications are and what the real earning potential is.




It's very close to the current regulations, Safety latches would be needed on the upstairs windows, carbon monoxide alarms etc. Beyond that just painting and decorating. There is no BER cert, so that's another thing I would need to get.



Surely leaving vacant is the best option if I take at face value all the advice of this thread? I've an extremely high pressure day job working for a multinational and family commitments which are way more valuable to me than a few Euro. I'm not really willing to let this take over my life. I just don't believe now is a good time to sell given the close proximity to the Dublin docklands. Even if the bottom does fall out of the property market, I don't really mind sitting on it for 10-20 years.

Morally I find the idea of leaving it vacant repugnant but financially I don't really see the risk reward paying out yet. If it's government policy to force part time landlords out of the Market (which may or may not be a good idea at the Macro level), I'm under no obligation to sell an asset I believe will appreciate in value over time.

Talk about a 180 degree turn. At the start you ave hare brained schemes for tax avoidance and putting tenants in before doing work t save a few quid. Now you are going to leave it empty and forego 100% of the rent and also incur maintenance costs. If it is near the docklands you should do it up properly, get high grade tenants at a high rent and just pay your bills and taxes.

antoinolachtnai

Manion wrote: »

Surely leaving vacant is the best option if I take at face value all the advice of this thread? I've an extremely high pressure day job working for a multinational and family commitments which are way more valuable to me than a few Euro. I'm not really willing to let this take over my life. I just don't believe now is a good time to sell given the close proximity to the Dublin docklands. Even if the bottom does fall out of the property market, I don't really mind sitting on it for 10-20 years.

Morally I find the idea of leaving it vacant repugnant but financially I don't really see the risk reward paying out yet. If it's government policy to force part time landlords out of the Market (which may or may not be a good idea at the Macro level), I'm under no obligation to sell an asset I believe will appreciate in value over time.

No, it is a bad option. Firstly, it is an unproductive use of assets. The point of having assets is to use them productively, not store them up speculatively. This is a moral point if you like. You are going to figure out where you stand on morality.

Secondly you will make your neighbours sad. Neighbours may complain about tenants, but they really don't like vacant houses.

Thirdly, you still need to pay the maintenance, insurance, tax and electricity standing charges over 20 years, and this will amount to tens of thousands of euros. Insuring a vacant property in the inner city will not be particularly cheap. If the government has any sense it will put an extra tax on people who hold vacant property.

I don't know if there is much more 'rise' in the value of the property to be hand in the area, unless it is suitable for development. It is an asset that is safe from inflation I suppose. In any case, when you get to the end, your capital gain will be subject to capital gains tax.

I suppose the alternative for some owners is to maximise the value of the property and minimise the cost and hassle, you could disconnect the electricity and let it go to rack and ruin and so avoid paying LPT.

If you really can't bear the work and hassle, I (and I'm sure many others) will lease it off you for a few thousand euros a year and manage everything else. Your life will be simple and the taxes and maintenance and insurance will get paid. You will still have your long-term strategy.

4ensic15

The_Conductor wrote: »

The OP has multiple posts in the thread- less of the antagonism towards other posters please.

I am well aware the o/p has multiple posts on this thread. I deduced what I think he meant but another poster has a different view. I am merely asking that other poster what his view is.

LotharIngum

Manion wrote: »

This actually was what I was referred to by other landlords. It seems based on the link I cannot actually use it as It has to be a new property no one I already own?

Yes you can.
Its a very simple concept they are talking about.
example is
Your salary is 80K and you are 45 years old and you are putting 10% into a pension fund and getting tax relief on it.

You let your property and get 10k a year from it.
You are earning an extra 10K in rental income not allowed to put it in your pension.

So you put another 10k from your salary into your pension fund and you get tax relief on it. Easy. It works all the way up to your pension limit for your age.

Manion

Claw Hammer wrote: »

Talk about a 180 degree turn. At the start you ave hare brained schemes for tax avoidance and putting tenants in before doing work t save a few quid. Now you are going to leave it empty and forego 100% of the rent and also incur maintenance costs. If it is near the docklands you should do it up properly, get high grade tenants at a high rent and just pay your bills and taxes.

If you reread my original post and subsequent posts you'll see I did not proffer any "hare brained" scheme. I refer to the suggestions as arm chair advise. The entire purpose of the thread was to validate the correctness of said advise. I know it might be unusual but I'm actually open to the advise given so a 180 or 90 degree turn about is reasonable. I'd tried to approach this without priors.

Tax avoidance is perfectly legitimate. However another poster has already provided references indicating the set up it is not applicable in my instance as I already own the property.

You recommend modernising the property to get high grade tenants and high rents. This is something I will discuss with the letting agent however I've been quoted up to 60 thousand Euro to upgrade to a "high end" fit out. Arm chair advise on this option has been that I won't make my money back in any meaningful timeframe. It's not exactly a simple option especially as I would need to borrow the fund such upgrades.

antoinolachtnai wrote: »

No, it is a bad option. Firstly, it is an unproductive use of assets. The point of having assets is to use them productively, not store them up speculatively. This is a moral point if you like. You are going to figure out where you stand on morality.

Secondly you will make your neighbours sad. Neighbours may complain about tenants, but they really don't like vacant houses.

Thirdly, you still need to pay the maintenance, insurance, tax and electricity standing charges over 20 years, and this will amount to tens of thousands of euros. Insuring a vacant property in the inner city will not be particularly cheap. If the government has any sense it will put an extra tax on people who hold vacant property.

I don't know if there is much more 'rise' in the value of the property to be hand in the area, unless it is suitable for development. It is an asset that is safe from inflation I suppose. In any case, when you get to the end, your capital gain will be subject to capital gains tax.

I suppose the alternative for some owners is to maximise the value of the property and minimise the cost and hassle, you could disconnect the electricity and let it go to rack and ruin and so avoid paying LPT.

If you really can't bear the work and hassle, I (and I'm sure many others) will lease it off you for a few thousand euros a year and manage everything else. Your life will be simple and the taxes and maintenance and insurance will get paid. You will still have your long-term strategy.

There are plenty of investments that do not pay out continuous dividends and plenty of people who are happy with capital appreciation. I think there is some room between derelict (rack and ruin) and vacant. Anyway, as mentioned, the plan is to talk to a letting agent and tax adviser and proceed from there. I can't see myself entering into a binding lease agreement with a third party.

4ensic15 wrote: »

I am well aware the o/p has multiple posts on this thread. I deduced what I think he meant but another poster has a different view. I am merely asking that other poster what his view is.

I think he was referring to me simple putting income into a personal pension fund.

Manion

LotharIngum wrote: »

Yes you can.
Its a very simple concept they are talking about.
example is
Your salary is 80K and you are 45 years old and you are putting 10% into a pension fund and getting tax relief on it.

You let your property and get 10k a year from it.
You are earning an extra 10K in rental income not allowed to put it in your pension.

So you put another 10k from your salary into your pension fund and you get tax relief on it. Easy. It works all the way up to your pension limit for your age.

The above is true, but not the pension scheme referenced in the Davy's article nor the one I was referring to. See here

"One of the great advantages of the rent being paid into the fund is that it is not included as part of your maximum contribution allowance – it is separate income from the table below. The rent is not classed as an actual pension contribution and the full limits remain available."

So essentially 100% relief on rental income. Property is also not subject to capital gains tax when sold at a later date.

4ensic15

LotharIngum wrote: »

Yes you can.
Its a very simple concept they are talking about.
example is
Your salary is 80K and you are 45 years old and you are putting 10% into a pension fund and getting tax relief on it.

You let your property and get 10k a year from it.
You are earning an extra 10K in rental income not allowed to put it in your pension.

So you put another 10k from your salary into your pension fund and you get tax relief on it. Easy. It works all the way up to your pension limit for your age.

If you are already funding a full pension from your salary you won't get tax relief on any increased payments. The Rental income will be fully taxed and there is a possibility of using the net income to invest in a tax efficient investment.
That doesn't seem to me waht the o/p was asking. He wanted to avoid tax on the rental income from what I could discern.

4ensic15

Manion wrote: »

The above is true, but not the pension scheme referenced in the Davy's article nor the one I was referring to. See here

"One of the great advantages of the rent being paid into the fund is that it is not included as part of your maximum contribution allowance – it is separate income from the table below. The rent is not classed as an actual pension contribution and the full limits remain available."

So essentially 100% relief on rental income. Property is also not subject to capital gains tax when sold at a later date.

That is what I assumed you meant. If you are not doing the place up, the best thingf to do is let to students. They turn over rapidly so you will not get caught with lifers.

Lumen

If you sell it, what are you going to do with the money?

Do you have other sources of income in retirement?

There are risks with all forms of investment. A year of non paying tenant is annoying. So is seeing your stock market holdings lose 50% in a crash.

beauf

If it's a property you own and you don't need the money nothing wrong with renting it. As long as someone doesn't trash it and it takes 2yrs to get someone out. But that didn't seem to happen that often.

ImARebel

the other option is to hand it over to the council for 10 or 20 years. Know that you won't get it back in the condition you gave it to them but at least they take the hassle out of being a landlord for you. They pay 20% under current market value. Which is still not bad if you don't have a mortgage to cover on it. Might not be something you're into but it's an option

something else to think about if you don't want to go down the road of being a full blown landlord and handling it all yourself.

Ray Palmer

Not sure why people are suggesting letting agents as some great thing. Used them a few times and they added nothing but hassle.
Not letting us know the tenant had an issue. Getting me to organise repairmen. Not contacting the tenants about non payment of rent or informing us.

For this effort they like to claim a months rent. Now there is no additional working for them to rent a place €500 or €5000. Weird economic theory.

The_Conductor

Ray Palmer wrote: »

Not sure why people are suggesting letting agents as some great thing. Used them a few times and they added nothing but hassle.
Not letting us know the tenant had an issue. Getting me to organise repairmen. Not contacting the tenants about non payment of rent or informing us.

For this effort they like to claim a months rent. Now there is no additional working for them to rent a place €500 or €5000. Weird economic theory.

Sounds like they got you a tenant- but didn't manage the tenancy. Typically a management agreement with a letting agent costs 10-15% of the gross rent *per month* not just the month's rent upfront........

Anyhow- most of the larger agents are winding down their property management business- as its not worth it any longer- Lisneys etc- are not taking on new clients.

Claw Hammer

Ray Palmer wrote: »

Not sure why people are suggesting letting agents as some great thing. Used them a few times and they added nothing but hassle.
Not letting us know the tenant had an issue. Getting me to organise repairmen. Not contacting the tenants about non payment of rent or informing us.

For this effort they like to claim a months rent. Now there is no additional working for them to rent a place €500 or €5000. Weird economic theory.

for a months rent all they will do is the letting. They will want another months rent to do management. Specialist agents are not the same as experienced landlords who know the local market and what works in it. Agents often just advertise, take the first tenant with deposit and leave the landlord with problems. Some may be good on the standard to work to and the level of demand in an area but the vast majority of EAs see letting as a minority activity.

beauf

The_Conductor wrote: »

...Anyhow- most of the larger agents are winding down their property management business- as its not worth it any longer- Lisneys etc- are not taking on new clients.

Where did you get that from?

beauf

Ray Palmer wrote: »

Not sure why people are suggesting letting agents as some great thing. Used them a few times and they added nothing but hassle.
Not letting us know the tenant had an issue. Getting me to organise repairmen. Not contacting the tenants about non payment of rent or informing us.

For this effort they like to claim a months rent. Now there is no additional working for them to rent a place €500 or €5000. Weird economic theory.

That's just a bad an expensive agent.

Claw Hammer

beauf wrote: »

That's just a bad an expensive agent.

Most agents charge for lettings on a percentage basis.

beauf

Claw Hammer wrote: »

Most agents charge for lettings on a percentage basis.

Maybe but not a months rent. Thats very expensive and not have it managed.