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Renting out home and going travelling

  • 24-02-2022 12:01pm
    Registered Users Posts: 340 ✭✭ Happyhouse22

    My girlfriend and I would love to leave our jobs and go travelling.

    An obvious way of funding this would be to rent out our home when we are gone - but very unsure about this because of stories regarding poor tenants,

    We had also considered renting it to some trusted friends at much below market rates in a tenant/caretaker role.

    Obviously from a intrapersonal point of view this strategy might not be recommended but we are pretty confident on this front.

    However in terms of legal/financial implications for us and the people we would ask to do this is less clear.

    For info- market rent would be 3,000 - 4,000 per month and we look for 1,200-1,500 per month which would be.good deal and less they are currently paying in rent for a much smaller apartment.


  • Registered Users Posts: 1,261 ✭✭✭ Gant21

    Rent it out to a cash tenant. Don’t go down the road of hap anyway.

  • Registered Users Posts: 26,462 ✭✭✭✭ Creamy Goodness

    Is there an outstanding mortgage on the place? will you be able to pay this plus pay the income tax on the rental income? There may be implications to your mortgage agreement with your bank if you don't mention you're renting it out. Also insurance if anything goes wrong whilst you're away.

    There's a few reasons why rent is so high in the current market and it's mainly down to having to service the repayments + pay the income tax on rental income (obviously before anyone jumps down my throat, greed is another from professional landlord outfits).

    You'd have to do the above and land on a profit to pay for the travelling, I'd suggest running the numbers in better detail to see if it's feasible or a instagram pipe dream.

  • Registered Users Posts: 64 ✭✭ covidcustomer

    A friend of mine rents two rooms in her home, she goes abroad for several months every year, coming back periodically to visit friends and family, basically she retains her room in the home and this arrangement suits her very well.

  • Registered Users Posts: 340 ✭✭ Happyhouse22

    No mortgage so should be okay from that point of view.

    Presumably there would be little enough income tax on the rent, particularly if we aren’t working - certainly wouldn’t go into the 40% rate.

  • Registered Users Posts: 340 ✭✭ Happyhouse22

    Have definitely thought about this - using the rent a room scheme would keep things simple and tax free and we do intend to come back to Ireland at least once or twice in the year so would be an ideal set up.

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  • Registered Users Posts: 26,462 ✭✭✭✭ Creamy Goodness

    You may run into issues claiming rent a room

    [quote]The room or rooms must be in a residential property that is located in Ireland. You must use it as your main residence during the tax year.[/quote]

    So depending on how many days you're out of the state it may impact the rent a room relief calculation.

    Also are there savings that will be funding this? cause even if this is your sole income, that you declare and pay income tax on and you end up with 1200-1500 that's very little to travel with when you factor in a place to stay and food. I know things are cheaper in most of the world but not that cheap.

  • Registered Users Posts: 68,318 ✭✭✭✭ seamus

    This is what a lot of people do because it gives them a lot more legal control over the property. Pre-covid there were a lot of sob stories from travelling landlords who arrived home and tried to go back but found that they couldn't, either because they had signed a fixed term lease agreement, or failed to give the proper eviction notice to the tenant.

    The "trusted friends" aspect eliminates this, but as said above may still have some ramifications in terms of your mortgage and tax. If you're a non-resident landlord, then the tenants are obliged to deduct 20% of the rent and give it to revenue, regardless of what other income you may have.

    Revenue don't need to know you're non-resident, but that means you will have to file a tax return with Revenue as if you were resident here and pay whatever is due, if anything.

    In terms of relationships, you should have a relatively clear map in your head of what everyone is to expect. Are you going travelling for a year? 2? 5? 10? When you come home, will you share with them while they find somewhere else or do you expect them to up and leave?

    If you're off for 3 years, then you may come back to people who view the house as their home and will need a long lead time (6+ months) to find somewhere else.

    If you're off for 5-10 years, then there's every likelihood that you'll get a call while you're hiking some jungle mountain, telling you that they're moving out and you'll have no choice but to drop what you're doing and come home because the money well is dry.

  • Registered Users Posts: 340 ✭✭ Happyhouse22

    Thanks, I guess the move would just be use rent a room, file a tax return (need to do anyway) and not say we have left. Plan would be to travel to a few different countries so not like we would have an alternative main residence - so at worst a bit of a grey area.

    There are some savings to help fund it but not enough realistically .

    I think we will spend more than this a month - but in my younger days definitely travelled around on less than 1000 a month with no problem.

  • Registered Users Posts: 340 ✭✭ Happyhouse22

    Thanks - great response and lots to think about.

    I think we should be okay on the non resident part especially if we go down the rent a room route. To be honest if we are not working anywhere and not staying anywhere longer than a couple of months and coming back to Ireland during the year then I would be pretty comfortable with this.

    We would have quite a clear timeframe in mind - 10-11 months total. The friends we would like to do this with are currently saving for a mortgage- so this would hopefully save them some money and we would know that it’s nit for long term. They would be welcome to stay with us for a period when we return - but as you highlight the issue isn’t the exact details or the arrangement and more that everyone is sure what those details are.

  • Registered Users Posts: 18,176 ✭✭✭✭ Del2005

    If you've left the country and are trying to claim rent a room the RTB could easily award the person in your house a large sum of money, everyone is your friend till they discover they could be homeless on your return. Revenue have clear rules, the RTB is biased against landlords.

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  • Registered Users Posts: 340 ✭✭ Happyhouse22

    Thanks - My understanding was that the rent a room scheme is completely independent of the RTB.

  • Registered Users Posts: 18,176 ✭✭✭✭ Del2005

    You won't be resident in the country for a year or so, I wouldn't be confident that if your "licencee" got onto the RTB that they'd see it as a rent a room.

  • Registered Users Posts: 340 ✭✭ Happyhouse22

    I see your point - and well worth considering but do think we would be okay.

    Especially as we intend returning at least once during the year and we wouldn’t be living anywhere else - would be hard enough to establish it wasn’t our main residence.

    Also only considering this with people we trust - Would have to be a complete breakdown in the relationship for this to happen.

  • Registered Users Posts: 340 ✭✭ Happyhouse22

  • Registered Users Posts: 7 Yoya432

    Seems like a stupid thing to do to me.

    How old are you? Grow up.

  • Posts: 3,656 Megan Clean Wagon

    OP I think you should go for it! Covid has robbed 2 years of our lives, go and travel, escape, live your lives especially when you have no committments! Rent out a room or two and you can come back anytime. You don't know when you will do that or how often so you should be fine under the Rent a Room scheme, Revenue don't need to know you're travelling.

    There is a lot of begrudgery out there, just keep that in mind. I don't see why the RTB would be involved in any way and they have enough on their plates to be looking into what a rent a room tenant is saying about their landlord!! (why would a tenant risk that anyway if there are getting lovely accommodation for less than the asking price???)

  • Registered Users Posts: 340 ✭✭ Happyhouse22

    Thanks for your support.

    I think I know who the comment above yours is from and he’s just winding me up 😂- told him I posted it one here.

  • Registered Users Posts: 547 ✭✭✭ sportsfan90

    Go for it OP, like the above poster said we've all lost time over the past 2 years so if it's what you want to do and you have the opportunity then absolutely go for it.

    However, I'm not sure if you're a frequent visitor to the Accom & Property Forum or not but there's been threads through the years of people who rented out their house to a friend or family member and didn't get it back as agreed. Their conclusion was to only do so if you're willing to lose the friendship afterwards.

    This is especially the case if you're renting it out on favourable terms, when the owner wants the house back the renter might not be so quick to vacate knowing that they'd potentially be paying twice the amount elsewhere. I'm sure cases like that are in the minority but something to keep in mind.

  • Registered Users Posts: 18,176 ✭✭✭✭ Del2005

    It's up to you. But when your friends friends start getting in their ear about how they are tenants not licencees and how good a deal they are getting they won't be quick to move to pay proper rent or move back in with their parents when they find out they need 3 months notice to vacate and there are no consequences for tenants not obeying tenancy law yet there are big fines if a landlord doesn't and the RTB don't like landlords, especially ones who try to pretend they aren't.

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  • Registered Users Posts: 17,431 ✭✭✭✭ kippy

    If you are in a position to do it why not. Just in relation to income, rental income is subject to tax and you may want to factor that in to any sums as well as any costs you might incur renting in the first instance.

    Even though there are horror stories here about renting to friends and family, the are vastly more rentals to friends and family that work out well for all involved that you never hear of, so don't let that put you off.

    Best wishes with whatever you decide I'd say go for it if you can!

  • Registered Users Posts: 340 ✭✭ Happyhouse22

    Thanks for the advice, words of caution and words of encouragement.

    To be honest it’s not something we do lightly - totally see everyone’s point . I think if we go into it with clear exoectations etc on bothsides it will help it run smoothly

  • Registered Users Posts: 324 ✭✭ The Ging and I

    Keep a bedroom for yourselves (locked ) and rent the rest. Dont worry about not getting the max rent because it may push you into the top rate of tax.

  • Registered Users Posts: 340 ✭✭ Happyhouse22

    Ya - that would be the plan, keep a room for all our stuff.

  • Registered Users Posts: 1,223 ✭✭✭ celtic_oz

    if you do rent the entire house be very careful who you rent to .. the rules in this country do not allow you to kick someone out quickly even if you have an iron clad "this is rented for x years" in the contract and they don't want to leave.

    It becomes their "home" and even though they signed something .. makes no difference.

    mortgage tax relief and Capital gains are also affected by residency

  • Registered Users Posts: 340 ✭✭ Happyhouse22


    We were considering using rent a room to avoid this.

    plan would be to keep a room in the house for ourselves and rent out the other two rooms to friends. They would of course benefit by having the house to themselves for most of the year.

  • Moderators, Business & Finance Moderators Posts: 8,506 Mod ✭✭✭✭ Jim2007

    Growing up though means recognising that you have only life to live and that if you can manage it, taking some time out to enjoy life, explore the world and broaden your mind is a good thing. But I guess some people's idea of growing up is a limited different to the rest of us.

  • Registered Users Posts: 340 ✭✭ Happyhouse22

  • Registered Users Posts: 5,368 ✭✭✭ JimmyVik

    OP go follow your dreams while you are young.

    You will figure out how to make it work. Everything works out in the end.

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  • Registered Users Posts: 340 ✭✭ Happyhouse22

    Thanks for the positivity - ya we are definiteky going! If we can’t get money by renting out the house we will just go and work somewhere abroad for a few months