Rent review - comparison to similar properties

woodchuck

So we've received notice of our rent review and they want to increase our rent by 4%. I'm not surprised...

However, while they've included the rent amount being asked for 3 properties of a similar size, type and character and in a comparable area, the rent for one of the 3 properties is less than what we're being asked to pay. In fact, it's less than what we're currently paying!

When we had our rent review last year, all 3 properties quoted had higher rent than what they were asking us to pay. So I assumed that this was the norm to demonstrate that what they're asking is in line with the market rate.

So what does it mean if one of the 3 properties quoted is asking for rent lower than what is being asked of us? A part of me hopes it invalidates our new rental quote... but I'm sure someone here can tell me why I'm wrong?

massy086

Did uyou get a rent increase last year??

woodchuck

Yes, we went up 4% last year. That was the first increase after living here for 2 years. This is our second increase after living here for 3 years.

massy086

woodchuck wrote: »

Yes, we went up 4% last year. That was the first increase after living here for 2 years. This is our second increase after living here for 3 years.

are you in a rpz if so I think you can only get an increase every 2years

4ensic15

woodchuck wrote: »

So what does it mean if one of the 3 properties quoted is asking for rent lower than what is being asked of us? A part of me hopes it invalidates our new rental quote... but I'm sure someone here can tell me why I'm wrong?

The rent increase has to bring you to the lesser of market rent or 4% above your current rent. If a comparator property is less than your rent this might be justified on the basis that your property is superior by virtue of size, location, build etc. Your increase isn't automatically invalid. If you want you can tray and argue that the market rent for your property should be less than the 4% increase.
To succeed in this you would have to produce evidence to support your claim.

Evd-Burner

massy086 wrote: »

are you in a rpz if so I think you can only get an increase every 2years

That is not correct. It can be increased 4% per year depending on which RPZ.

See the below link and results based on rent in Fingal RPZ.

https://onestopshop.rtb.ie/calculator/rpz

Summary of results:
Tenancy Type:
Existing

Date tenancy commenced:
01/08/2016

Date previous rent set:
01/08/2018

Date new rent to take effect:
01/08/2019

Previous rent amount:
€2000

Maximum rent permitted:
€2080.00

* Please note the amount above is the maximum increase permitted; Landlords can apply a lesser amount.

Landlords can apply a lesser amount.

Calculation:
R x (1 + 0.04 x t/m)

€2000 x ( 1 + 0.04 * 12/12) = €2080.00

woodchuck

massy086 wrote: »

are you in a rpz if so I think you can only get an increase every 2years

Yes, we're in a rpz. I thought it was only every 2 years too, until I read another thread on here recently! My understanding now is that it goes up 4% in the first 2 years, but 4% annually later that.

https://www.citizensinformation.ie/en/housing/renting_a_home/rent_increases.html

pc7

If the other property is a lot less would you move to it instead?

woodchuck

pc7 wrote: »

If the other property is a lot less would you move to it instead?

It did cross my mind! It probably wouldn't be enough of a difference to justify the hassle of moving though. And better the devil you know...

woodchuck

4ensic15 wrote: »

The rent increase has to bring you to the lesser of market rent or 4% above your current rent. If a comparator property is less than your rent this might be justified on the basis that your property is superior by virtue of size, location, build etc. Your increase isn't automatically invalid. If you want you can tray and argue that the market rent for your property should be less than the 4% increase.
To succeed in this you would have to produce evidence to support your claim.

Thanks for the information! They did say themselves that the properties they compared to were of a similar size, location etc though. It would be interesting to look it up myself though. I might have a look on daft too just to get an idea of the going rates in the area atm.

Fian

4ensic15 wrote: »

The rent increase has to bring you to the lesser of market rent or 4% above your current rent. If a comparator property is less than your rent this might be justified on the basis that your property is superior by virtue of size, location, build etc. Your increase isn't automatically invalid. If you want you can tray and argue that the market rent for your property should be less than the 4% increase.
To succeed in this you would have to produce evidence to support your claim.

More likely that property is controlled to a rate below market rate by the RPZ restrictions.

you have to show that the rate you are being charged is above market rate (or breaches the 4% limit). Ask yourself - if they advertised your property on the open market would a stranger be willing to rent it at the rent they are proposing? If the answer is yes then it is market rate.

handlemaster

woodchuck wrote: »

Thanks for the information! They did say themselves that the properties they compared to were of a similar size, location etc though. It would be interesting to look it up myself though. I might have a look on daft too just to get an idea of the going rates in the area atm.

So two are renting for more one for less. So why would you assume lesser would apply when there are more properties renting for more ?

woodchuck

handlemaster wrote: »

So two are renting for more one for less. So why would you assume lesser would apply when there are more properties renting for more ?

I'm assuming it's not a random sample though and that they'd pick the 3 most expensive properties to strengthen their position. The fact that they could only find 2 more expensive makes me wonder if our rent is reaching the ceiling for the area.

Maybe it's not worth challenging this year, but if we're still here next year and they try to increase it again, I'd challenge it and/or start looking around for something that's better value. I know it's "only" 4%, but 4% every year on top of already ridiculously high rent will start to add up very quickly.

4ensic15

woodchuck wrote: »

I'm assuming it's not a random sample though and that they'd pick the 3 most expensive properties to strengthen their position. The fact that they could only find 2 more expensive makes me wonder if our rent is reaching the ceiling for the area.

Maybe it's not worth challenging this year, but if we're still here next year and they try to increase it again, I'd challenge it and/or start looking around for something that's better value. I know it's "only" 4%, but 4% every year on top of already ridiculously high rent will start to add up very quickly.

There is a very tight supply of rental properties. It can be hard to find comparators. In some parts of the country the comparators might be 10 miles away from the subject property. The RTB is quite difficult to convince about market rent and in my experience an estate agent who operates in the letting business in the area has to come and give evidence of the rents in the area. It can cost a few hundred euro to get an agent to go in and give evidence.

ted1

woodchuck wrote: »

I'm assuming it's not a random sample though and that they'd pick the 3 most expensive properties to strengthen their position. The fact that they could only find 2 more expensive makes me wonder if our rent is reaching the ceiling for the area.

Maybe it's not worth challenging this year, but if we're still here next year and they try to increase it again, I'd challenge it and/or start looking around for something that's better value. I know it's "only" 4%, but 4% every year on top of already ridiculously high rent will start to add up very quickly.

There is so little places for rent it’s often difficult for landlords to find comparable places. Yet alone find places to pick the best ones from.

I increased the rent last year and could not find any other 2 bedroom houses within 10km in west Dublin.

dennyk

ted1 wrote: »

There is so little places for rent it’s often difficult for landlords to find comparable places. Yet alone find places to pick the best ones from.

I increased the rent last year and could not find any other 2 bedroom houses within 10km in west Dublin.

"Comparable" properties don't have to be in the same exact geographic area, just a comparable location (e.g. urban vs. suburb vs. rural village/town vs. rural one-off) and a comparable property type and size. For a place in/near Dublin, you'd probably want to make sure to pick something roughly the same distance from the city centre and with similar proximity to transit links, just to cover all your bases, but it doesn't have to be something in the same suburb, or even the same post code. Also, you can go back as far as four weeks when referencing advertisements, so start scouring Daft on a daily basis a month or so before you plan to issue the rent review notice and screenshot every comparable ad you come across.

geniejews

dennyk wrote: »

"Comparable" properties don't have to be in the same exact geographic area, just a comparable location (e.g. urban vs. suburb vs. rural village/town vs. rural one-off) and a comparable property type and size. For a place in/near Dublin, you'd probably want to make sure to pick something roughly the same distance from the city centre and with similar proximity to transit links, just to cover all your bases, but it doesn't have to be something in the same suburb, or even the same post code. Also, you can go back as far as four weeks when referencing advertisements, so start scouring Daft on a daily basis a month or so before you plan to issue the rent review notice and screenshot every comparable ad you come across.

So, are you trying to say that if you are giving a rent review in Ballymun, you can use Terenure as comparable, they are both the same distance from the city centre. Are you trying to give an RTB Adjudicator a laugh!!! Comparable, is supposed to be comparable

dennyk

geniejews wrote: »

So, are you trying to say that if you are giving a rent review in Ballymun, you can use Terenure as comparable, they are both the same distance from the city centre. Are you trying to give an RTB Adjudicator a laugh!!! Comparable, is supposed to be comparable

Sure, you could if the property in question was of a similar standard. You'd want to take into account any other factors that might affect the value, though, in case the tenant were to challenge it on that basis.