Thinking of renting out our house

bizzieebee

Hello, I am looking for some advice in regards to renting out our home.

What are the pitfalls for people doing this that we should be aware of?

I did rent the property out when first purchased for 1 year (16 years ago) but it seems there are a lot of changes in the rules etc. Our intention is to rent the house out for anywhere between 1-4 years and then sell the property.

Our fear looking at things online is if we wish to give notice and take the property back to 1. Sell or 2. If things don't go to plan move back in that someone can dispute this and stay long term in the property.

Also what is the stance when someone stops paying the rent or if anything arises with anti social issues with ending a lease?

Many thanks in advance for any advice, tips etc

Samuel T. Cogley

bizzieebee wrote: »

Also what is the stance when someone stops paying the rent or if anything arises with anti social issues with ending a lease?

Expect five figure legal fees and a year to two years of unpaid rent. Add to that the potential for finding the house destroyed.

It's unlikely to happen but is the potential risk worth the reward envisaged?

You may also be violating the terms of your mortgage.

listermint

Samuel T. Cogley wrote: »

Expect five figure legal fees and a year to two years of unpaid rent. Add to that the potential for finding the house destroyed.

It's unlikely to happen but is the potential risk worth the reward envisaged?

How many rentals end up in that situation. Do we actually have stats. Because it always seem to the the go to on boards. The world's falling down negative boooo.


Is it even 1 percent

Samuel T. Cogley

listermint wrote: »

How many rentals end up in that situation. Do we actually have stats. Because it always seem to the the go to on boards. The world's falling down negative boooo.


Is it even 1 percent

OP asked what the situation was if it happened.

listermint

Samuel T. Cogley wrote: »

OP asked what the situation was if it happened.

That's true. But I also asked what's the stats. Tis a fair question

Samuel T. Cogley

listermint wrote: »

That's true. But I also asked what's the stats. Tis a fair question

2% of all registered tenancies had some sort of dispute in 2019 and €2.1 million was awarded in rent arrears. (RTB Annual Report 2019)

I don't know how long the average tenancy lasts but I waould say it's over a year so your chanced of a dispute is higher than 2%.

listermint

Samuel T. Cogley wrote: »

2% of all registered tenancies had some sort of dispute in 2019 and €2.1 million was awarded in rent arrears. (RTB Annual Report 2019)

I don't know how long the average tenancy lasts but I waould say it's over a year so your chanced of a dispute is higher than 2%.

Thanks for the stats.

So extremely low and even lower if you go about tenant selection carefully. That's good to know.

Browney7

Samuel T. Cogley wrote: »

2% of all registered tenancies had some sort of dispute in 2019 and €2.1 million was awarded in rent arrears. (RTB Annual Report 2019)

I don't know how long the average tenancy lasts but I waould say it's over a year so your chanced of a dispute is higher than 2%.

Is 2% of tenancies the landlord initiating action against a tenant or does it include tenant disputing with a landlord too?

pinkyeye

I'm doing it at the moment and I just want rid of it at this stage. So much hassle. In saying that I am renting to relatives so I'm being taken advantage of big time so that's my own fault.

bizzieebee

pinkyeye wrote: »

I'm doing it at the moment and I just want rid of it at this stage. So much hassle. In saying that I am renting to relatives so I'm being taken advantage of big time so that's my own fault.

That's what worries me, its ending the lease. I read somewhere that even if the lease is finished if they don't want to leave they can stay on for a further 5 1/2 years. It's important that I'll be able to sell the property when I need to sell it.

beauf

Your only way to break it is to say you need it for family or sale. That's assuming they don't change the law on that in the meanwhile.

If someone doesn't leave it could take you as much as two years to go through the courts to get them out, and who know how much cost.

The odds of it happening are low, but the risk of great expense if it does happen are high.

You'll lose about a third of the income in tax. Then have to refurbish the house. If the rent is decent and you don't need to spend a lot to t rent it, then it's probably worth it.

If also make the point that if you were thinking of selling. This is maybe the peak of the market. Though in 4 years time it will probably have recovered. But it's hard to predict. Maybe this isn't peak and there will be no dip. Hard to know.

Zebrag

A neighbour that lives on my mother's road rented their house to a couple with a child. The contracted stated it was for 1 year, set payments were made but the neighbour had plans of extending the contract anyways as so far, they had no issues. Never a payment missed. No issues in terms of house maintenance. Overal the tenant seemed fine. The neighbour would text every couple of weeks to make sure all was fine, if not, every few months. Boiler was fine etc, if they needed anyone to do the garden as there was another neighbour who had a garden business and would mow a couple of the neighbours garden for them. Basically went above and beyond when they could to make sure all was happy and no issues which I taught was nice of them. Even at Christmas sent a card and a present for the little one. Honestly I would of loved this person to be my landlord.

One year later the 1 year contract renewal was due, tenants said they would like to extend contract and possibly add a friend to the spare room they had. The neighbour wanted to make sure the spare room was in good condition to make sure it was livable for extra person. Once the set payments were made and all was agreed. Even going as far as buying new sheets and curtains as fair as they was concerned no one was using the room. I think the tenants wanted to split the rent between themselves and said friend, which is sometimes often the case. Neighbour said they wanted to visit the house and want to check the room for precautionary measures. They arranged a day for them to go up to the house so everyone was more than happy for this. Neighbour always texts as proof of communication. It seemed like the neighbour and tenants were on good terms. Even neighbours on the other side of them didn't have any issues, said they were quiet enough. Always had children in or around the garden but that wasn't a cause for concern.

Turned out it wasn't a friend that was staying in the room, it was another couple and a child in a spare room with a single bed. The sitting room was disastrous. Toys, food and rubbish all over the place. The kitchen seemed fine, they said. Probably the "cleanest" place in the house. The downstairs bathroom had broken tiles and the upstairs bathroom had a broken mirror and the door handle on the bathroom door was literally hanging on for dear life. The neighbour didn't enter the tenants room as they said its their privacy and wouldn't probe but didn't want to imagine if that was just as bad. The spare room they supposedly wanted to rent out was turned into a room with a single bed and a toddlers bed and clothes all over the floor with a draw missing from one of the cabinets. It was basically a room the other couple stayed in most of the time really.

The tenants had put photos in the hallway of their child, screw nails into the walls (I am currently renting and I wouldn't even dream of putting anything on the walls so I'm not sure if that's allowed) One of the walls on the landing had a paint mark like they wanted to test out another colour and it seems like they decided not to actually do the paint and just left it (my neighbour said they would of allowed them to paint their child's bedroom if they had asked but it wasn't a room they wanted to paint) I'm not sure what the tenants was trying to do to the house to be honest but it wasn't the state it was left in when they moved in. I'm all for making a house a home, especially when renting but there's other ways to do it.

The neighbour wouldn't of had a major issue had the tenants just said throughout the year that a couple wanted to rent the spare room, obviously not doable for a child as the room was tiny but I'm sure my neighbour would of happily found another arrangements for them. It was the lying and the state of the house it was in. Like I said the neighbour made sure all maintenance was met if needed and by the looks of it, they didn't inform them of anything except payment was made as far as the tenants was concerned which arguably is true.

The couple had moved into the spare room not too long after the tenants. It was a friend of the couple which they did state but they didn't state it was a couple with a child. The spare room had bedsheets sellotaped to the window as curtains which my neighbour had brought into the house and the second couple were delighted with this when they seen them but my neighbour just said no, the room is too small and that she will find other arrangements for them. I found it brazen that the second couple even mustered any excitement over curtains but anyways. The neighbour gave them a number to a person she knew was renting an apartment to the other couple and calmly said she wasn't allowing a family to live in a small room especially with a young child. She simply said she wasn't going to be the type of landlord that allows her tenants to be squashed into rooms all for the sake of sharing rents.

It was other 4 months before the tenants all of a sudden texted my neighbour and said they wanted to move and found another place. The tenants at first apologised for lying about the second couple but my neighbour lost respect and trust after that and pretty much said she wanted the house cleaned as soon as possible and the tiles, mirror and door handles fixed. The neighbour didn't ask them to move out but I think the tenants got the hint when my neighbour seen the state the house was in. When they moved out they still didn't fix anything, they cleaned up but it was more of a quick sweap of the floors and that was that. They left loads of toys which I presume their little one either grew out of or they didn't have room to bring them so my neighbour gave them away to the other kids on the road. They left the holes on the wall which in fact one ended up cracking the wall. The paint mark was still there. Turned out that one of the couches was being held on the bottom by a couple of books and the stand for the telly was out the back garden, ruined by the rain and such as the tenants were in the process of wanting to mount the telly on the wall, again the neighbour was more than happy to allow a couple of changes and arrangements had they asked.

I felt awful for the neighbour to be honest. She was a genuinely good woman and literally give you the shirt off her back if it ment you were warmer than her. She rented her house to a family she taught she could trust. Although she knows she's heard of some worst stories of houses being completly distroyed and she's thankful there wasn't too much to be done after, it was the lack of trust that made her stop. It was a few weeks before the house was back to normal and she ended up selling the house and staying in her current home. Her older son actually ended up fixing a lot of stuff in the house that the lady missed on seeing. One of the lights on rthe ceiling had a wire exposed.

She still visit another neighbour she is good friends with and seems in good spirits and although she said renting was an experience, she said you have to be more tough skinned as the tenants tried to tell her she owed them money when they left when in reality, their deposit ended up paying for the damages. The neighbour ended up giving some of their deposit back as it wasn't worth the hassel and the tenants harrasssed her for a while after that but she said she was upset she sold the house but it less stress for her now.

It's all well and good renting your home, it doesn't matter how nice or mean you are, how generous or tight you are, you've to be cautious all the time. I am renting a house now and I always make sure to ask my landlord can I do A B or C and often he would say "you really don't need to ask" but I would rather save face. Plus the last thing I would want is my landlord thinking I'm more than happy to ruin his house with no intentions of staying long term.

Always take photos before a tenet moves in. It's nice to be nice but make sure they know that you're not going to be made a fool of either but again that's the caution aspect of it.

DubCount

Browney7 wrote: »

Is 2% of tenancies the landlord initiating action against a tenant or does it include tenant disputing with a landlord too?

This really does not matter, whether the stat is 1%, 2% or even 0.5%. Anyone renting out one property will experience either 0% or 100%. If you get hit with the 1 in 50 chance, or the 1 in 100 chance, the impact is usually financial ruin for the landlord. About 2 years of no rent while the tenant does not pay, plus legal fees and fixing significant property damage is a bigger bill than most single property landlords can sustain.

You may choose to gamble because the odds look good, I would not advise risking my entire financial stability on the roll of the dice.

beauf

Zebrag wrote: »

A neighbour that lives on my mother's road rented their house to a couple with a child. ...t.

I know you're trying to be helpful. But there's no need such detail. These situations are not unusual with the business of renting. Really very little wrong with the house other than cleaning and cosmetics. That's at most 1~2k. Nothing really.

I've known houses needing major repairs after getting it, back 10k~20k. Then the legal costs of getting back. But this is rare. But again you have to look at over the entire period of the investment, which could be decades. So in that context, its not as significant. But you need to have a contingency fund to cover it.

Caranica

Have a load of horror stories for you too. I'll spare you the detail but repairs from the last lot were in the region of 10k and the only way we could get them to move out was to return their deposit. Friend had worse experience, damages were over 30k. Rentals I've lived near have included a growhouse, a 3 bed with 20 people in it, and of course people "known to the Gardai". All of these people hoodwinked landlords and agents.

And at the end of it all you'll be faced with a capital gains tax bill when you sell the property. So my advice is don't do it. Sell now and save yourself the stress, the heartache and the repairs.

listermint

DubCount wrote: »

This really does not matter, whether the stat is 1%, 2% or even 0.5%. Anyone renting out one property will experience either 0% or 100%. If you get hit with the 1 in 50 chance, or the 1 in 100 chance, the impact is usually financial ruin for the landlord. About 2 years of no rent while the tenant does not pay, plus legal fees and fixing significant property damage is a bigger bill than most single property landlords can sustain.

You may choose to gamble because the odds look good, I would not advise risking my entire financial stability on the roll of the dice.

Sorry mate but stepping out your door, heck walking down your stairs is a role of a dice. we ALL make calculated decisions every moment of the day.

I wouldnt turn the kettle on if i was you...

Zebrag

beauf wrote: »

I know you're trying to be helpful. But there's no need such detail. These situations are not unusual with the business of renting. Really very little wrong with the house other than cleaning and cosmetics. That's at most 1~2k. Nothing really.

I've known houses needing major repairs after getting it, back 10k~20k. Then the legal costs of getting back. But this is rare. But again you have to look at over the entire period of the investment, which could be decades. So in that context, its not as significant. But you need to have a contingency fund to cover it.

OP did say many thanks for advice, tips and etc so I taught I give a bit of glimps of what renting could be like. I gave a detailed story of a woman I know who like OP taught renting would be a good idea, pretty much realised people can be awful. Not all I must say but OP did ask....

Good Luck anyways OP. My dad rents rooms in his home when he's away and has never had an issue. Might not be the same thing but if it helps, renting can be investment like previous post said if you're willing to go into the nitty and gritty of it all.

Iodine1

Rule no 1. Do not rent to friends or relatives.
Rule no 2. Do not rent to relatives or friends ever ever.
Use an agent.
Beware of the capital gains on your home compared to selling your rented house and remember your rent will be taxed.

DubCount

listermint wrote: »

Sorry mate but stepping out your door, heck walking down your stairs is a role of a dice. we ALL make calculated decisions every moment of the day.

I wouldnt turn the kettle on if i was you...

Of course we all take risks, and risk is a part of life. This is not a risk that anyone needs to take. The impact of a bad experience is simply too big. Could you afford a €50k hole in your finances over the next 2 years? If you cant afford to play the game, you dont play the game, even with the odds in your favor.

Browney7

DubCount wrote: »

This really does not matter, whether the stat is 1%, 2% or even 0.5%. Anyone renting out one property will experience either 0% or 100%. If you get hit with the 1 in 50 chance, or the 1 in 100 chance, the impact is usually financial ruin for the landlord. About 2 years of no rent while the tenant does not pay, plus legal fees and fixing significant property damage is a bigger bill than most single property landlords can sustain.

You may choose to gamble because the odds look good, I would not advise risking my entire financial stability on the roll of the dice.

I was seeking clarification as to whether 1 in 50 landlords has tenancy problems (as 2% seems high). I've no comment to make on what risk the OP should or shouldn't be willing to take.

Agree the OP should have their eyes open to the potential risks and rewards of renting out their property but there's risk in all walks of life.

What's the greater risk for the OP - leaving a property idle and receiving 0 income and expenses on top or receiving a years rent with a 1% chance they get 0 rent from day one with 2 years of a delinquent tenant and legal fees on too with potential damage. Only the OP can answer this

endacl

listermint wrote: »

Sorry mate but stepping out your door, heck walking down your stairs is a role of a dice. we ALL make calculated decisions every moment of the day.

I wouldnt turn the kettle on if i was you...

You should write 80s movie trailer voiceovers.

jam_mac_jam

Does nobody ever get normal people as tenants. I know you are trying to make sure they know what you are getting in to.

My story is that I rented for years. Never had a bad relationship with a landlord. Never did anything to the house. Always clean. The landlady in one house said she was sorry to see us go.

My parents rent out a house. Never an issue other then having to fix things.l that broke with normal wear and tear.

It can be fine as well. Not everyone causes 10k damage.

listermint

DubCount wrote: »

Of course we all take risks, and risk is a part of life. This is not a risk that anyone needs to take. The impact of a bad experience is simply too big. Could you afford a €50k hole in your finances over the next 2 years? If you cant afford to play the game, you dont play the game, even with the odds in your favor.

yes probably could if the house is going to be paid off over the other 30 years i own it. - asset.

You are making mountains out of factual decisions. The over arching majority of landlords have no problems to minuscule business related problems. The way you are going on no one should actually do anything - ever.

I would advise against. I did it while I was sent abroad for work.

I thought the tenant was fine, due diligence was carried out. Used an estate agent.

I won't say it was a nightmare but it was grief. Can't even do basic maintenance and was always on my case about things breaking or not working. I was abroad, couldn't check myself and it was only when I came home I realised the washing machine, etc were all fine. She was just an idiot. For example, the dishwasher wasn't cleaning anymore. You know why? Because for over a year she never filled the salt, rinse aid or using tablets. Never cleaned the shower head and the backlog of limescale killed the electric shower. I could continue.

When I eventually took it back and moved in, there was damage far higher than the deposit covered and they had repainted the rooms (badly) which I also had to redo. They was also a dog and subletters which I didn't agree to.

jam_mac_jam

jam_mac_jam wrote: »

Does nobody ever get normal people as tenants. I know you are trying to make sure they know what you are getting in to.

My story is that I rented for years. Never had a bad relationship with a landlord. Never did anything to the house. Always clean. The landlady in one house said she was sorry to see us go.

My parents rent out a house. Never an issue other then having to fix things.l that broke with normal wear and tear.

It can be fine as well. Not everyone causes 10k damage.

The majority are fine, the issue is the bad one can destroy you financially.

If you still have a mortgage and are paying all the costs and tax of renting, the profit won't be big enough to even touch a disaster case.

rightmove

bizzieebee wrote: »

Hello, I am looking for some advice in regards to renting out our home.

What are the pitfalls for people doing this that we should be aware of?

I did rent the property out when first purchased for 1 year (16 years ago) but it seems there are a lot of changes in the rules etc. Our intention is to rent the house out for anywhere between 1-4 years and then sell the property.

Our fear looking at things online is if we wish to give notice and take the property back to 1. Sell or 2. If things don't go to plan move back in that someone can dispute this and stay long term in the property.

Also what is the stance when someone stops paying the rent or if anything arises with anti social issues with ending a lease?

Many thanks in advance for any advice, tips etc

These days it looks like things are fine until they are not. You could come back in here in 7 months time and tell us all is good. Then when you ask them to leave you might find things are not as fine as you thought.

listermint

Niner leprauchan wrote: »

I would advise against. I did it while I was sent antics for work.

I thought the tenant was fine, due diligence was carried out. Used an estate agent.

I won't say it was a nightmare but it was grief. Can't even do basic maintenance and was always on my case about things breaking or not working. I was abroad, couldn't check myself and it was only when I came home I realised the washing machine, etc were all fine. She was just an idiot. For example, the dishwasher wasn't cleaning anymore. You know why? Because for over a year she never filled the salt, rinse aid or using tablets. Never cleaned the shower head and the backlog of limescale killed the electric shower. I could continue.

When I eventually took it back and moved in, there was damage far higher than the deposit covered and they had repainted the rooms (badly) which I also had to redo. They was also a dog and subletters which I didn't agree to.

so a shower and some paint for the bulk of your mortgage (if not all) if it being covered for a year, and you can come back not having to cover that cost.

Yeah seems crap alright.... Bit of perspective.

DubCount

Browney7 wrote: »

I was seeking clarification as to whether 1 in 50 landlords has tenancy problems (as 2% seems high). I've no comment to make on what risk the OP should or shouldn't be willing to take.

Agree the OP should have their eyes open to the potential risks and rewards of renting out their property but there's risk in all walks of life.

What's the greater risk for the OP - leaving a property idle and receiving 0 income and expenses on top or receiving a years rent with a 1% chance they get 0 rent from day one with 2 years of a delinquent tenant and legal fees on too with potential damage. Only the OP can answer this

The stats from the RTB looks to be somewhere just over 1 in 100 (though like all stats from the RTB, they are far from clear). This only covers cases opened with the RTB. It does not count times where LLs dont bring cases (for example, Tenant stops paying rent, gets notice from LL, wrecks the house and leaves - there is no case with the RTB).

Its worth noting that the 1 in 100 stat is also an annual stat. If you want to rent out property for 30 years, your stat goes to 30 in 100 which is even more scary.

I was a LL for 15 years. I know lots of LLs. I would say on a straw pole of those I know, about half have suffered a loss of in excess of €10k at some point in their time as a LL - myself included. Its not a certainty, but it is sufficiently risky to make the whole venture unappealing,

listermint

listermint wrote: »

so a shower and some paint for the bulk of your mortgage (if not all) if it being covered for a year, and you can come back not having to cover that cost.

Yeah seems crap alright.... Bit of perspective.

Ill respond to you when you learn to read full posts and take the chip of your shoulder about landlords.

3DataModem

Iodine1 wrote: »

Rule no 1. Do not rent to friends or relatives.
Rule no 2. Do not rent to relatives or friends ever ever.
Use an agent.
Beware of the capital gains on your home compared to selling your rented house and remember your rent will be taxed.[

/QUOTE]

I'll add another rule: don't leave any furniture or fittings you care about. Renters will tend to have high wear and tear, so after a couple of years expect to paint and refurnish, and be happy when you don't have to.

PMBC

My brother who lives abroad rents out family home - smallish at c.100 sq.m. and very well decorated and maintained. He has same tenant and same rent for more than ten years.
I wondered why he didn't increase it minimally - say E50 per month. His reply was I'd prefer to keep the tenant I have at low rent than to achieve a higher rent with tenant/s I dont want!
Since possible damage is a risk surely it would be possible to insure against it with a national scheme into which all deposits would be pooled?
Im a renter in Ireland since 2015, prior to that in UK and overseas. I have never had a bad vacating. I do most - any I can manage - repairs - myself and painted the dmall hall last year as it had grown 'tatty' and needed a lift. The landlord/agent is slow on repairs - doors on kitchen presses, gutters blocked and others - but we live with it.
The system needs to be improved for both landlords and tenants. There are fly by night landlords too. People carp about Capital Gains Tax - its the law. Allowances should be made, if not so already, for costs of decoration, repairs etc. Its scandalous that he foreign investors, REITS etc. seem to be able to gain substantially from our tax system and is at least unfair competition.