Renting out Family Home

KevinK

Thinking about going travelling for a year and renting out our family home.

Would love to here about positives, negatives and potential pitfalls if anyone has done this.

To be honest having read lots of negatives of being a landlord on here we are a bit nervous of it! But on the other it would probably fund our trip at current rental rates.

What are the tax implications? As we would still be tax resident in Ireland I presume we would simply pay the tax at the marginal rate which would mean not paying too much tax on this income.

I presume if we sign a 12 month lease and make it clear to the tenant that the lease is only for 12 months we shouldn’t have any problems getting our house back when we return.

pinkyeye

It will prove very difficult to get it back regardless of what the lease says because various NGO's tell tenants not to move out, to simply overhold.

KevinK

pinkyeye wrote: »

It will prove very difficult to get it back regardless of what the lease says because various NGO's tell tenants not to move out, to simply overhold.

That’s crazy if true. Seems mad that we would not be able to get our family home.

Another option we have considered is renting to trusted friends but at maybe 50% of the market rate. Might be worth it if what you say is true.

I presume rent a room isn’t an option if we are abroad (but essentially just on a long holiday, in fact we would possibly come back once or twice in the year and would stay with our friends if they were renting “rooms” from us.

Caranica

So many negatives, getting it back being number one. Having the place trashed is another. We rented out our previous family home and to say it was heartbreaking and gutwrenching to see the damage that had been done would be a massive understatement. Really wouldn't recommend renting your home out if there is any alternative.

punisher5112

If you have an attachment to it which I'm sure you do and all your belongings such as furniture, appliances etc then it's a terrible idea.

Where are you going to be traveling this pandemic could change travelling as we know it ...

KevinK

punisher5112 wrote: »

If you have an attachment to it which I'm sure you do and all your belongings such as furniture, appliances etc then it's a terrible idea.

Where are you going to be traveling this pandemic could change travelling as we know it ...

Fair enough, massively attached is the problem.

I had heard all these negative stories about renting, but was hoping to hear something a bit more positive The house would be quite expensive to rent, and I was hoping that this might attract professional tenants with reputations to preserve. House is in south dublin and someone had suggested approaching the likes of Microsoft as they often have employees stationed in Ireland on short term contracts.


Very true regarding Corona, plan isn’t really for the short term . Hopefully 2022 but maybe the following year. Planned on South America, Asia and maybe Africa.

KevinK

Caranica wrote: »

So many negatives, getting it back being number one. Having the place trashed is another. We rented out our previous family home and to say it was heartbreaking and gutwrenching to see the damage that had been done would be a massive understatement. Really wouldn't recommend renting your home out if there is any alternative.

That sounds terrible- definitely talking me out of it

sunnysoutheast

KevinK wrote: »

That sounds terrible- definitely talking me out of it

If I were in your position I would only entertain Corporate lets.

I would not enter into a conventional tenancy under any circumstances if I knew I needed to move back into a property.

punisher5112

Be aware even if renting to family you are still eligible for tax and they would have to pay revenue too.....

Family and money can be a bad idea and even more so with friends.

Obviously worst case scenario we are saying and of course you could be lucky and everything go ok but as soon as anyone is in 6 months or more they are well protected and obviously at the moment there is new rules for the time being....

KevinK

sunnysoutheast wrote: »

If I were in your position I would only entertain Corporate lets.

I would not enter into a conventional tenancy under any circumstances if I knew I needed to move back into a property.

Do you (or anyone else) have any info on corporate lets? Have heard of them in passing but don’t really know anything about them. Sounds like a better option

KevinK

punisher5112 wrote: »

Be aware even if renting to family you are still eligible for tax and they would have to pay revenue too.....

Family and money can be a bad idea and even more so with friends.

Obviously worst case scenario we are saying and of course you could be lucky and everything go ok but as soon as anyone is in 6 months or more they are well protected and obviously at the moment there is new rules for the time being....

Ya aware that I would be taxed (but hopefully not too much as we wouldn’t be working),why would they have to pay revenue?


I get the idea about not mixing family/friends and money, but just seems like the lesser of two evils. Also would only consider these particular friends - I guess at some stage you have to have trust in somebody......

punisher5112

KevinK wrote: »

Ya aware that I would be taxed (but hopefully not too much as we wouldn’t be working),why would they have to pay revenue?


I get the idea about not mixing family/friends and money, but just seems like the lesser of two evils. Also would only consider these particular friends - I guess at some stage you have to have trust in somebody......

20% of rental income needs to be kept and they must pay revenue this as your out of state.

Pkiernan

There is no such thing as a 12 month lease.

Once tenants have been in the property for 6 months, they gain the full legal right to continue to rent it for 6 years total.

A written lease does not supersede this right.

Be very careful.

KevinK

punisher5112 wrote: »

20% of rental income needs to be kept and they must pay revenue this as your out of state.

I thought this was only if you are residing abroad? We would essentially just be on an extended holiday, would still be paying tax in Ireland etc.

KevinK

Thanks for all the replies guys, I think based on this we would only rent to someone we know and trust.

Researched the corporate lets a bit but don’t think it is an option really. From what I see there is a market but only in a very limited number of ares e.g. Dublin 4, Sandyford, Dalkey.

hurlingman97

Maybe You could rent to students, final years or even masters, then at least they would move out.
Negatives would be it would only be 9/10 months not full year,
they probably wouldn't treat the place as well as you would like,
also they might not be able to afford it

KevinK

hurlingman97 wrote: »

Maybe You could rent to students, final years or even masters, then at least they would move out.
Negatives would be it would only be 9/10 months not full year,
they probably wouldn't treat the place as well as you would like,
also they might not be able to afford it

Having been a student myself I don’t think so

In all seriousness it’s probably fine in most cases but I guess that would be the true with any let.

listermint

KevinK wrote: »

Thinking about going travelling for a year and renting out our family home.

Would love to here about positives, negatives and potential pitfalls if anyone has done this.

To be honest having read lots of negatives of being a landlord on here we are a bit nervous of it! But on the other it would probably fund our trip at current rental rates.

What are the tax implications? As we would still be tax resident in Ireland I presume we would simply pay the tax at the marginal rate which would mean not paying too much tax on this income.

I presume if we sign a 12 month lease and make it clear to the tenant that the lease is only for 12 months we shouldn’t have any problems getting our house back when we return.

Don't ever ever ever ever ever rent to friends.


Ever.


.unless you don't want to be friends anymore

listermint

Just to qualify the statement I work with a guy who rented to a trusted friend and his father for two years. He spent the last 9 months trying to get them both out they stopped paying and overhead. The trusted friend sees no wrong in it. Fell on hard times according to him. And still wants to be friends. The owner needed to move in with his new wife.

There's trusted friends and theirs trusted friends.


Don't ever bring friends and money together.

ted1

punisher5112 wrote: »

20% of rental income needs to be kept and they must pay revenue this as your out of state.

Providing they are paying into a foreign bank account.

Simple solution is to open a N26 or Revolut

ted1

The best option is to rent to someone who is renovating their house.

They’ll not need a 3-6 month lease and will move out.
You could charge a premium and possible have 2 rents in a year.

KevinK

listermint wrote: »

Just to qualify the statement I work with a guy who rented to a trusted friend and his father for two years. He spent the last 9 months trying to get them both out they stopped paying and overhead. The trusted friend sees no wrong in it. Fell on hard times according to him. And still wants to be friends. The owner needed to move in with his new wife.

There's trusted friends and theirs trusted friends.


Don't ever bring friends and money together.

listermint wrote: »

Don't ever ever ever ever ever rent to friends.


Ever.


.unless you don't want to be friends anymore

Hmm ok, would you guys let friends stay for free (like housesitting)Seems a bad idea to leave the house empty for a long period also.

punisher5112

KevinK wrote: »

Hmm ok, would you guys let friends stay for free (like housesitting)Seems a bad idea to leave the house empty for a long period also.

If it was a brother or sister for example yes once they were sane and have their own....


Other worry would be insurance and type of mortgage held.

Leaving a property empty also needs specialist insurance.

Friends are a terrible idea as they will most likely shaft you, speaking from experience over money owed..... A few k, never returned.

One thing would be air BnB but obviously this is restricted now too. You would red someone to oversee it for you and change of planning is needed if you are looking to does this long term and I've yet to hear anyone got it.

KevinK

ted1 wrote: »

Providing they are paying into a foreign bank account.

Simple solution is to open a N26 or Revolut

Payment would be into Irish bank account. Having read up on this on the revenue website I think this doesn’t apply in this case. We are just going travelling, not seeking to live overseas. Probably won’t spend more that one month in any one country.

ELM327

Rent on a short term basis with max 5 month term. This way, people arent there long enough to get part 4 rights and overhold

KevinK

punisher5112 wrote: »

If it was a brother or sister for example yes once they were sane and have their own....


Other worry would be insurance and type of mortgage held.

Leaving a property empty also needs specialist insurance.

Friends are a terrible idea as they will most likely shaft you, speaking from experience over money owed..... A few k, never returned.

One thing would be air BnB but obviously this is restricted now too. You would red someone to oversee it for you and change of planning is needed if you are looking to does this long term and I've yet to hear anyone got it.

Family may be an option.

Will have to look into the insurance situation. I wonder what classifies as leaving a house empty, how many months would it need to be, would family staying a few days a month mean it didn’t count as empty. Lucky enough not to have mortgage.

Think Airbnb is a no go because of planning.

Depotdoc

Kevin,

Best option here is to speak to a professional who does this on a day to day basis. have always used <SNIP> and found them to be great, completely take the hassle away from any letting without taking away the control.

I rented my place out while I was away for a year with <SNIP> in their office, give him a call, hes a sound lad. No harm in having a second opinion from someone who does it for a living - <SNIP>

KevinK

Thanks, like I said earlier this is a plan for two or three years time. I probably wouldn’t even be thinking about it if it wasn’t for being cooped up at home with this virus dreaming of places we can go (and how we can afford it )

Don’t think it would be appropriate to call him now but will hang onto the contact details for future reference

The Nal

Where are you going to travel for a year?

KevinK

Good question Everywhere hopefully!

When my partner and I first met we talked about the dream of visiting every country in the world in our life.

Not sure how achievable it is really, the UN recognises 193 distinct countries, but going travelling for a year we would definitely hope yeti get to quite a few!

We went travelling for four months a few years ago and visited 11 countries in South America and Central Asia. We loved it so much and it has been our dream to go again.

Vague possible itenerary at the moment would be Ireland- Canada- Mexico- Colombia (find somewhere here to learn Spanish for a while) - Ecuador- Peru - Colombia-Panama- Costa Rica - Cuba- back to Ireland for Christmas. Then Ireland- Oman- India- Bangladesh- Thailand - Australia- Solomon Islands- Kiribati- Tuvalu - Fiji- Singapore- Cambodia- Laos- Vietnam - Brunei- Malaysia - Ireland

Would add Venezuela if the security situation improves there and would love to go to West Africa but not seeing how it would fit into this trip. Yet

nedkelly123

Capital gains tax attached to the property too if you ever sell it within 7 years i think .. CAREFUL OP!!!!

KevinK

nedkelly123 wrote: »

Capital gains tax attached to the property too if you ever sell it within 7 years i think .. CAREFUL OP!!!!

Good point , but property has been in the family for a few generations and I would be very reluctant to sell.

The Nal

KevinK wrote: »

Good question Everywhere hopefully!

When my partner and I first met we talked about the dream of visiting every country in the world in our life.

Not sure how achievable it is really, the UN recognises 193 distinct countries, but going travelling for a year we would definitely hope yeti get to quite a few!

We went travelling for four months a few years ago and visited 11 countries in South America and Central Asia. We loved it so much and it has been our dream to go again.

Vague possible itenerary at the moment would be Ireland- Canada- Mexico- Colombia (find somewhere here to learn Spanish for a while) - Ecuador- Peru - Colombia-Panama- Costa Rica - Cuba- back to Ireland for Christmas. Then Ireland- Oman- India- Bangladesh- Thailand - Australia- Solomon Islands- Kiribati- Tuvalu - Fiji- Singapore- Cambodia- Laos- Vietnam - Brunei- Malaysia - Ireland

Would add Venezuela if the security situation improves there and would love to go to West Africa but not seeing how it would fit into this trip. Yet

Wow, bit of planning in that yep!

KevinK

OSI wrote: »

I wouldn't count on current rental prices as a benchmark either. Start of March already saw a decent jump in the number of properties available to rent, if that trends continues along with the certain recession it's quite likely rents will drop.

Makes sense, but not too worried. Even if we got 50% of the current market rates it would pay for most of the trip.

KevinK

The Nal wrote: »

Wow, bit of planning in that yep!

Yep, quite a bit! But it’s something I enjoy doing, especially now in the current environment. Spend a lot of my time on sky scanner looking up possible routes these days. Of course Covid 19 could change a lot of things, already lots of flights cancelled between the pacific islands so hope that goes back to normal.

KevinK

Thanks for all the advice and comments everyone. Has given us lots of food for thought and will definitely help inform our decision when the time comes.

phantasmagoria

KevinK wrote: »

Thanks for all the advice and comments everyone. Has given us lots of food for thought and will definitely help inform our decision when the time comes.

When are you thinking of travelling to as I would be dubious as to the world returning to normal for the purposes of travel in the next 4 or 5 months? The areas you are referring to will likely be badly hit with coronavirus situation and the onset of economic damage.

I'm saying this as somebody who returned from a year to two year trip in the last few weeks as all has collapsed. We realised that we couldn't go anywhere and would potentially be stuck for months in the one place. We were in Thailand, Bali. My wife is South American so I would have regular updates on the ground there from her family members. We're even unsure of when we will next get to see extended family.

Coincidentally, we are back looking for a place to live as staying with family during the lockdown. Have found that lower rents are being offered for some very central properties but most people are unrealistic with rents that they expect and are shooting themselves in the foot, having a place empty for months as they cannot grasp simple mathematics, e.g., found a place which was perfect for us from a location point of view for work, college - price was expensive for one bed and offered €82 less a month, explaining that at a higher rate of tax it meant less than €50 of a difference to the landlord but made a significant difference to me in terms of what I would have to earn. Sent an email following up and it did not elicit a response.

JimmyVik

KevinK wrote: »

Thinking about going travelling for a year and renting out our family home.

Would love to here about positives, negatives and potential pitfalls if anyone has done this.

To be honest having read lots of negatives of being a landlord on here we are a bit nervous of it! But on the other it would probably fund our trip at current rental rates.

What are the tax implications? As we would still be tax resident in Ireland I presume we would simply pay the tax at the marginal rate which would mean not paying too much tax on this income.

I presume if we sign a 12 month lease and make it clear to the tenant that the lease is only for 12 months we shouldn’t have any problems getting our house back when we return.

Two questions for you.
1. Are you mad?
2. Are you nuts?



Unless you are a REIT you will just become a whipping boy.
People would be crazy to rent out their properties in Ireland these days.


Dont rent to friends or family. It will end in tears.
It wont pay you for your trip if you get someone who stops paying rent and you cant get them out foe a couple of years and while you are waiting they do €30k worth of damage to your house. That may not happen, but thye risk is there and it is real.

KevinK

phantasmagoria wrote: »

When are you thinking of travelling to as I would be dubious as to the world returning to normal for the purposes of travel in the next 4 or 5 months? The areas you are referring to will likely be badly hit with coronavirus situation and the onset of economic damage.

I'm saying this as somebody who returned from a year to two year trip in the last few weeks as all has collapsed. We realised that we couldn't go anywhere and would potentially be stuck for months in the one place. We were in Thailand, Bali. My wife is South American so I would have regular updates on the ground there from her family members. We're even unsure of when we will next get to see extended family.

Coincidentally, we are back looking for a place to live as staying with family during the lockdown. Have found that lower rents are being offered for some very central properties but most people are unrealistic with rents that they expect and are shooting themselves in the foot, having a place empty for months as they cannot grasp simple mathematics, e.g., found a place which was perfect for us from a location point of view for work, college - price was expensive for one bed and offered €82 less a month, explaining that at a higher rate of tax it meant less than €50 of a difference to the landlord but made a significant difference to me in terms of what I would have to earn. Sent an email following up and it did not elicit a response.

Sorry to hear it all went so poorly, at least you got back and are safe. Good luck with finding a new place. Our plan is for 24 months time at the earliest, that said .I am very aware that corona still has the potential to be problematic.

JimmyVik wrote: »

Two questions for you.
1. Are you mad?
2. Are you nuts?



Unless you are a REIT you will just become a whipping boy.
People would be crazy to rent out their properties in Ireland these days.


Dont rent to friends or family. It will end in tears.
It wont pay you for your trip if you get someone who stops paying rent and you cant get them out foe a couple of years and while you are waiting they do €30k worth of damage to your house. That may not happen, but thye risk is there and it is real.

I didn’t think I was mad or nuts before starting this thread! Now I’m not so sure.
Think I must be a bit mad as despite every single comment being negative I still haven’t ruled out the idea completely.

Probably have ruled out just putting it on daft and renting normally, put would still consider short term (1 to5 months) through an agency. Or to be honest would still consider renting to friends and family at a a big discount- perhaps through the rent a room scheme.

Edgware

Whether for five months or twelve months getting rid of tenants who wont leave is a nightmare and dont expect any support from the useless P.R.T.B.

KevinK

Edgware wrote: »

Whether for five months or twelve months getting rid of tenants who wont leave is a nightmare and dont expect any support from the useless P.R.T.B.

I can’t believe this is such a unanimous option on here. Feel like it’s not something I heard much talk about during the recent election despite the focus on the housing crisis.

Surely landlords not being scared of renting out properties would be a good first step

Caranica

KevinK wrote: »

Surely landlords not being scared of renting out properties would be a good first step

There's a difference between renting out a rental property and renting out your family home. Renting a property and requiring its return in a fixed time period is a nightmare. And that's before you consider potential damage.

JimmyVik

KevinK wrote: »

Sorry to hear it all went so poorly, at least you got back and are safe. Good luck with finding a new place. Our plan is for 24 months time at the earliest, that said .I am very aware that corona still has the potential to be problematic.



I didn’t think I was mad or nuts before starting this thread! Now I’m not so sure.
Think I must be a bit mad as despite every single comment being negative I still haven’t ruled out the idea completely.

Probably have ruled out just putting it on daft and renting normally, put would still consider short term (1 to5 months) through an agency. Or to be honest would still consider renting to friends and family at a a big discount- perhaps through the rent a room scheme.

Through an agency makes no difference. The agent will just drop it at the first sign of trouble and the problem is all yours from then on.
If you are doing short term, yourself or through an agency, make sure it is rent to a company and not an individual. And do background on the company yourself too.

KevinK

Caranica wrote: »

There's a difference between renting out a rental property and renting out your family home. Renting a property and requiring its return in a fixed time period is a nightmare. And that's before you consider potential damage.

Fair enough, I can see with an investment property it is a risk, but probably manageable level of risk but with a family home and have severe consequences on your life.

JimmyVik wrote: »

Through an agency makes no difference. The agent will just drop it at the first sign of trouble and the problem is all yours from then on.
If you are doing short term, yourself or through an agency, make sure it is rent to a company and not an individual. And do background on the company yourself too.

Yes would look to do it through a reputable company. But rent a room to a trusted friend or family member is more likely.

ELM327

nedkelly123 wrote: »

Capital gains tax attached to the property too if you ever sell it within 7 years i think .. CAREFUL OP!!!!

Pro rated though, for the time of rent vs time for PPR

Claw Hammer

phantasmagoria wrote: »

Coincidentally, we are back looking for a place to live as staying with family during the lockdown. Have found that lower rents are being offered for some very central properties but most people are unrealistic with rents that they expect and are shooting themselves in the foot, having a place empty for months as they cannot grasp simple mathematics, e.g., found a place which was perfect for us from a location point of view for work, college - price was expensive for one bed and offered €82 less a month, explaining that at a higher rate of tax it meant less than €50 of a difference to the landlord but made a significant difference to me in terms of what I would have to earn. Sent an email following up and it did not elicit a response.

Hardly surprising that you didn't get a response. Your landlord's tax affairs are none of your business so you come across as a smart ass making observations about your putative landlord's tax bill.

KevinK

Thinking I might go another way to raise funds for the trip. Maybe renting out a spare room to friends for a year before travelling. Should get in a bit. Thinking about starting another thread to get advice

punisher5112

KevinK wrote: »

Thinking I might go another way to raise funds for the trip. Maybe renting out a spare room to friends for a year before travelling. Should get in a bit. Thinking about starting another thread to get advice

€14k tax free for rent a room....

You could take in students or something that suits.

phantasmagoria

Claw Hammer wrote: »

Hardly surprising that you didn't get a response. Your landlord's tax affairs are none of your business so you come across as a smart ass making observations about your putative landlord's tax bill.

Claw Hammer, seems I hit a raw nerve with you... You under pressure from the tax man! Perfectly reasonable to try and bargain and couch it in terms that may not have been considered. Civility unfortunately seems to be a trait that is disappearing in this environment if it ever existed in the first place. Don't want to derail the OP.

Claw Hammer

phantasmagoria wrote: »

Claw Hammer, seems I hit a raw nerve with you... You under pressure from the tax man! Perfectly reasonable to try and bargain and couch it in terms that may not have been considered. Civility unfortunately seems to be a trait that is disappearing in this environment if it ever existed in the first place. Don't want to derail the OP.

Civility! Prying into other peoples affairs is rude. You did it to your putative landlord and now you are doing it to me. You will be well down the list in any letting you attempt to engage in with an attitude like that.

KevinK

punisher5112 wrote: »

€14k tax free for rent a room....

You could take in students or something that suits.

Something like that would work, would prefer to have friends I know and trust above students, but I am guessing the general advice would be against it.

Just feel like it could be win win, our friends would get to pay a bit less rent as they save for a mortgage and the income would allow us to save for our trip.

My partner and I are ina position where we don’t have particularly high salaries, but have this assist worth a lot which I would love too leverage into travel money in some way