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Stupid question from amateur landlord

  • 23-09-2021 4:59pm
    #1
    Registered Users Posts: 11,617 ✭✭✭✭ josip


    We last rented our 2 bed apartment 5 years ago. He was a good tenant, very little hassle, fixed some basic things if they broke, always paid rent on time.

    We kept the rent the same during the 5 years. Having a tenant we could trust was worth more to us than extracting the maximum rent. We thought, rightly or wrongly, that we could increase the rent by as many years' 4%s when he moved out, if the market rate was then above what we were charging.

    Fast forward 5 years and he has moved out. But I see that HIPC came into force in July and that the maximum we can increase the rent by according to their calculator is 4%.

    Just looking for confirmation from any Boardsie still left on the site, that we'll have to forget about the other 16% and that we're idiots?

    To put into context, we'd be restricted to renting for €1,560 according to HIPC and the cheapest 2 bed I can find in the same area is this:




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Comments

  • Posts: 0 [Deleted User]


    I don’t know how to work out the calculations but if I’m reading the rtb website correctly, the rent increase is now calculated on inflation for all backdated years rather than allowing you to calculate it at 4% for years before legislation changed and inflation for this year.



  • Registered Users Posts: 37 the1eyedsnake


    What else can you invest in tho? capital gains tax is 33%?.



  • Registered Users Posts: 872 ✭✭✭ DubCount


    Capital Gains is applicable to rental property as well.

    If you're not maximising pension contributions, making payments to an AVC will give you income tax relief as well as a shield from tax until you retire. Maybe foreign property, or commercial property, or shares, or ETFs, or bonds (corporate or government), or precious metals, or art, or crypto currencies or.....

    Speak to an independent financial advisor. A small fee could be the best money you ever spend. They will consider your individual circumstances and how much you have to invest and your attitude to risk etc.. I'd doubt continuing as a single property landlord in Ireland will be high on their list of options for you.



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  • Registered Users Posts: 1,235 ✭✭✭ JustJoe7240




  • Registered Users Posts: 2,321 ✭✭✭ HBC08


    My family have a house that we rent out well below market value (approx 50% below),we are like the OP happy to have a good tenant and the arrangement works well for all concerned,current tenant is there 7 years amd previous was here about the same.

    We're now in a situation where we're forced into strategically raising the rent because otherwise we'll be screwed like the OP down the line.Nobody is happy about this.



  • Registered Users Posts: 5,998 ✭✭✭ alias no.9


    Your hands are tied unfortunately. The only advise I have is to put the word out through your friends and family that you have a place to let and find new tenants through word of mouth, get a personal recommendation. If you advertise, you'll be inundated and it'll take a lot of effort to even shortlist for viewings, a shortlist of people for whom friends and family can vouch for is a much better place to start.



  • Registered Users Posts: 451 ✭✭ MBE220d


    Exactly, if you were good to a tenant I can't see them telling anyone what they were paying.



  • Registered Users Posts: 675 ✭✭✭ Burt Renaults


    Instead of feeling aggrieved at not being able to extract as much money as possible, like the advert in your post, why not embrace the situation and put the effort into finding a tenant as good as the one you had before? Someone who'll stay as long and save you having to re-advertise it for another five years. I'm currently in the fortunate position of having a good landlord who advertised at a noticeably lower-than-usual rate. He made me jump through hoops to get the place though - work references, previous landlord references (all of which were checked and verified - something which none of my previous landlords have ever taken the time to do). I had to meet him and his wife three times before anything was signed. I've no intentions of leaving any time soon.

    I made the mistake of signing a very expensive lease a couple of years ago. It was a very nice place, but I got the hell out of there after a year because I constantly found myself scouring daft.ie for something better value. I'm in my current place almost a year and I haven't even looked at Daft since I moved in.



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  • Registered Users Posts: 77 ✭✭ WTF...


    I think a new tenant can look for evidence of the previous rent.

    Also the rent amount is typically registered with the RTB.

    Below is from the RTB site:

    Some landlords and tenants believe that when one tenancy ends, and another begins, they can set the new rent to market rent levels as opposed to using the Rent Pressure Zone calculator. This is not the case. When a new tenancy commences, landlords must use the Rent Pressure Zone calculator to ensure the rent is set at legally permitted levels.  

    https://www.rtb.ie/beginning-a-tenancy/setting-rent



  • Moderators, Business & Finance Moderators, Motoring & Transport Moderators, Society & Culture Moderators Posts: 61,043 Mod ✭✭✭✭ L1011




  • Registered Users Posts: 451 ✭✭ MBE220d


    If a new tenant is going to start looking for evidence of the previous rent they won't get the place anyway. but that is what a good landlord gets penalised for, for being a good landlord.



  • Registered Users Posts: 10,570 ✭✭✭✭ Spook_ie


    Laymans question here,

    If you don't rent it out for 6 months or longer if needs be, and live there your self, does it ever drop off the rental boards scope and effectively become a virgin let?



  • Registered Users Posts: 400 ✭✭ e.r


    if your stuck at the RTB rate, why not rent the parking spot for a extra few quid.



  • Registered Users Posts: 11,617 ✭✭✭✭ josip


    Communal parking, there aren't any designated spaces.



  • Registered Users Posts: 11,617 ✭✭✭✭ josip


    I think it has to be at least 12 months out of the rental market.

    Exemptions

    "It is important to remember that not all properties in Rent Pressure Zones are subject to the HICP inflation restrictions. Exempt properties include properties that have not been rented for a period of two years prior to the immediate tenancy commencement date, a new tenancy in a protected structure that has not been let out in the previous 12 months and those properties that have undergone a 'substantial change in the nature of the accommodation'. "

    Post edited by josip on


  • Registered Users Posts: 1,619 ✭✭✭ JoChervil


    I don't think so. I rented a house for 1400 euro outside Dublin, yet in a pressure zone. I was registered with RTB. I moved out last August. Landlord put the house for sale through agency for one month, then put it for rent for 1700 euro. So agent must have known what they were doing. Anyway I think it is worth checking because maybe it is a way to do it?



  • Registered Users Posts: 1,065 ✭✭✭ meijin


    ah, it's very simple: they can just ask at the end of their tenancy, and ask for a refund plus penalties through RTB



  • Registered Users Posts: 13 lovemylife


    I'm in the same situation. Our long term tenant is leaving and according to other lets in the area, we can only charge €400-€500 less than market value. We need to spend about €5000 to re-let it (I'll have to borrow that) and really cant afford to service that loan. Our current rent is €1300 for a 2 bed house in Tyrellstown.



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  • Registered Users Posts: 2,578 ✭✭✭ Xander10


    Say you have let at a low unchanged rent figure for 10 years. For a new let, are you restricted to a rise of 4% of current rent being charged, or can you add 4% X 10 years compound increase?



  • Registered Users Posts: 2,578 ✭✭✭ Xander10




  • Registered Users Posts: 11,617 ✭✭✭✭ josip


    Can't do either.

    Since July you enter an address, starting rent and date into this website and it will tell you by how much you can increase the rent.

    If tested with a few dates our of curiosity and it allows a 3% increase if it's been 2 years since rent was last set, up to 4.1% if it was 5 years.



  • Registered Users Posts: 451 ✭✭ MBE220d


    This is what happens when you have an incompetent government meddling in the private rental market, this has been going on for years, the landlord have been putting up rent in RPZ every year because that have too, otherwise, the same thing happens as to what happened the op.

    I'm a small landlord that's not in RPZ and I don't increase the rent every year because I don't have to and I only put the rent up when the tenant leaves.

    But all this making the landlord the scapegoat for the housing crisis when it's not their fault, it's the crowd that's being in government for the last 10 years.



  • Registered Users Posts: 5,490 ✭✭✭ Claw Hammer


    It needs a 2 year break. What I would do with a property in that area is rent it to students on a B&B basis. I'd go in every day and pour out bowls of cornflakes and make a pot of tea. I'd hoover the entire every week and clean the kitchen every few days. After 2 years the rent cap would be broke.



  • Registered Users Posts: 193 ✭✭ boardlady


    This. This is the basis that most operate on. It is the status quo in general in this situation. Increase your rent and don't give it a second thought. Maybe appease your conscience and leave it shy of the full hike.



  • Registered Users Posts: 451 ✭✭ MBE220d


    If you could move back yourself and rent the other room you can get 14k tax free, probably more than you would get after tax renting out the whole aperment.



  • Registered Users Posts: 5,490 ✭✭✭ Claw Hammer


    Rent has to be declared when registering the tenancy. The RTB are checking declared rents against previously declared rents and pursuing landlords.

    Thinking that no one will know is very naïve.



  • Registered Users Posts: 7,843 ✭✭✭ riclad


    Any money you spend on the property can be claimed against rental income say you buy a 800 euro sofa, claim 100 per year over 8 years capital allowance I presume this could also apply to interest payments on loans taken out to fund repairs on a rental unit



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  • Registered Users Posts: 1,269 ✭✭✭ mrslancaster


    The rents may be in line with previously registered but Ive heard about new leases recently with extra charges outside of rent and deposit like property tax, admin fees for late payment, charge for professional cleaning and repainting at the end of a fixed term, car space, window cleaning, garden and gutter maintenance, and the boiler service. One place was unfurnished or with a charge for furniture. The rents were below market rates.

    All those costs weren't passed on to tenants before but things seem to be changing. Its getting like Ryanair where you're charged for everything...



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