Tips for homeowner new to Rent a Room scheme?

97805

Hi all, I'm about to purchase my first house in Dublin. There will be two spare bedrooms and I will be getting two lodgers under the Rent a Room scheme to help with the mortgage.

My only experience of this kind of thing is living in student house shares and renting apartments in Ireland and abroad. I've never been the homeowner/landlord...

I want to provide decent accommodation, no interest in being a slumlord but it also needs to work for me financially and personally.

I'd welcome any tips that you might have from experience on what to do/not to do for this to work for all involved.

sportsfan90

I've no experience in this but I've heard someone before saying they'll always go for someone from a different county in their 20s who are big into playing gaa, as those are the kind of people who will most likely be heading back to their homeplace most weekends playing matches etc.

97805

I hadn't thought of that - it's true, every GAA player I can think of does often head home at the weekend. I wouldn't mid the lodgers staying at the weekend as long as they understand there won't be any parties, etc.

handlemaster

Dont listen to sob stories. Go with your gut. You don't owe anyone anything that is looking to rent.

97805

https://www.boards.ie/discussion/comment/119193136#Comment_119193136

Yes, that will be hard for me as I tend to be a bit soft, but I'm going to have to just be clear that rent and bill share must be paid in advance no matter what. Not looking forward to that tbh. Hope I don't hear any sob stories!

97805

I am worried about the bills. What do you do if a lodger is running up huge bills eg cooking things that take hours, cranking the heating up all the time? I intend to divide the monthly bills by the number of people in the house but I don't think it's right that say, one person, is clearly using an abnormal amount of electricity and myself and the other lodger have to subsidise it? But then I don't want to police everybody's movements, not fun for me or them...

sportsfan90

If you're worried about bills, I'd be sussing out what they do for a living and if they work from home. It might be fine during the summer, but during winter they might have heating on all day which you and the other lodger would be subsidising by splitting bills. Also they might be taking up the kitchen table / living room as their office.

Make sure the combined rent they pay doesn't go over €14k if you want to avoid paying tax on it.

ax530

Know some people who do this, get students via University. They all seem to go home at weekends and rarely emerge from room when there.

If you looking for house mates company the student option may not be for you.

Caranica

Don't give them a lease, but set some basic rules like rent, deposit, share of bills, overnight guests, noise,cleaning etc. These are the things most people fall out over. Depending on how many bathrooms you have you might need to agree stuff around that. Ditto parking.

Also, consider how they work, if they work different hours to you the bills will be higher for light and heat. These days with a lot of people working from home it's something you need to factor in too.

97805

https://www.boards.ie/discussion/comment/119193195#Comment_119193195

Thanks. I'm not looking for company. I need help with the mortgage and in return will provide nice, clean rooms with full use of kitchen, bathroom and sitting room. My ideal lodgers would be quiet, clean and not running up large utility bills. I don't mind exchanging a bit of small talk but I'm not looking for people to share my life with. I would have my own bedroom and sitting room.

I don't want to allow the lodgers overnight guests or frequent day guests, as I don't want to be meeting strangers on the way to my own bathroom. Is that reasonable?

97805

https://www.boards.ie/discussion/comment/119193194#Comment_119193194

Yep, makes sense. For that reason I wouldn't want a wfh lodger. I would take a wfh lodger if bills weren't included in the €14k but that's not the way it is, which is bizarre to be.

sportsfan90

https://www.boards.ie/discussion/comment/119193224#Comment_119193224

I'd double check that on the bills, as far as I know the €14k is the max rent you can take in for it to be tax-free and that anything they pay towards bills is separate to the max €14k. Someone else here might confirm this though as I'm not 100% sure.

Also definitely be upfront on your expectations on them having guests over. You don't want to be living with someone who's using your house trying to complete tinder. I've also been in houseshares where their partner was a regular enough visitor (which was fine for the most part) but eventually they just moved them in as we weren't vocal enough about it.

97805

100% sure that you can't take in more than €14k from your lodger for any reason (eg rent, meals, laundry). Bill shouldn't be part of it imo - with the price of utilities these days a lousy lodger could bankrupt a home owner with an electricity bill.

Mrs OBumble

https://www.boards.ie/discussion/comment/119193626#Comment_119193626

Shouldn't be - but to be 100% clear, they currently are.

When I did similar, I took a generously averaged amount for bills with the rent each week/fortnight/month, and then every 3 or 4 months did a square-up against the actual bills, and gave refunds. Saved arguments when people moved out part say thru a billing time.

I also only charged people for actual days they were allocated the room: if someone wanted to move out, they could go whenever they wanted and paid only pro-rate for the actual time they were there. No point in someone having a sour-grapes attitude around the place.

I wouldn't be so stressed about long cooking - slow cookers are built to be efficient. Heating can be more of an issue, but is still not enormous relative to the room-rent cost.

Be very clear up-front about parties, overnight guests and the like. Some will say you're being OTT - but it's your home, your rules.

MakersMark

The 14k is inclusive of all bills.

All income is to be declared to Revenue.

Go one cent over and income tax, PRSI and USC are all due on the entire amount.

97805

https://www.boards.ie/discussion/comment/119193697#Comment_119193697

Thanks. I was thinking of doing this but then worried about seeming to take in more than the €14k even if giving refunds. The bills being included in the €14k makes it messy, I think, seeing as how you don't know how much the bills will be and if they might push you over the €14k, etc.

I hope I'm not being naive. As a student I lived in househares and everybody was clean and responsible. As a tenant renting out entire flats I have always been clean and tidy and paid my rent on time, etc. I'm hoping that the odds of decent lodgers are stacked in my favour!

tvjunki

If you are in the city then you can approach language schools and take students on a weekly-3 monthly basis. Always work through the school if you do this. Do not take the rental off the books as the student can become a permanent fixture. If you have difficulties you can get the student moved. Rates are based on half board or self catering.

They are your lodger so make sure they pay on time. The moment they are late give them a warning and then notice.

97805

https://www.boards.ie/discussion/comment/119193942#Comment_119193942

Thanks. Aren't the language schools themselves inherently dodgy though? I worked in one years ago - they were just mills for visas back then anyway...

Mrs OBumble

Most lodgers and house-sharers are fine, clean and responsible. You need to take precautions against getting nightmares- but most people aren't like that

Think very carefully about whether you want a housemate or a lodger. With the latter, you will be doing a lot more cooking.

DFB-D

https://www.boards.ie/discussion/comment/119193787#Comment_119193787

Just to be clear.

Revenue document/ tax legislstion state that charges similar to food etc is included in the 14k, so if you charge room and board, laundry or any other service, the amount cannot exceed 14k.

Ultilities are not similar to the examples given.

You should get professional advice on the above rather than relying on asking random people (no offense intended), as to not charge bills based on current utilities rates could be ruinous and charging bills which could effect the 14k limit could result in a high tax bill.

Padre_Pio

Best bet is find someone from work you like who is looking for a room, or somewhere cheaper to rent.

The tax free limit is 14k, so 7k per year per tenant, so max you can take is just under 600 a month. That's likely cheaper than most are paying in rent already, and you may choose to set rent even less.

Best thing about work people is you already know them and you likely have more in common than someone answering an ad.

Cuddlesworth

Couple of things not noted here.

Its your house, the licensees staying with you have no rights. Don't give a lease and threats of the RTB mean nothing, your not bound by them. You can and should kick them out if they are difficult to live with, even to the point of packing up their stuff and dumping into the front garden(if it comes to it). A not insignificant amount of single room renters are nuts but you won't see it till they move in. You have to be a hard ass or they will walk over you and make your house hostile.

Larger deposits drive off people who are bad with money.

Keep a very close eye on your bills, crypto mining has become a serious problem in house shares.

sportsfan90

I'm not sure what part of the country you're in OP, is it a location that you'd be charging below market rate to stay below the €14k? If it's somewhere with high rents then maybe you should stick to one lodger rather than two, but charge the full market rate. It would firstly half your chances of having a troublesome lodger and reduce the wear & tear of an extra person in the house.

It would also eliminate the problem that high bills could tip you over the €14k limit. You'll probably come out with slightly less than the €14k, but the trade off might be worth it. Although if you're not in one of the bigger cities with high demand this probably wont apply to you.

kirving

https://www.boards.ie/discussion/comment/119193164#Comment_119193164

To be honest, you (or the lodgers) can't be as worried about bills as you appear to be. It just turns into a disaster.

You can't realistically assess an "abnormal" amount of electricity? Is a 5, 10 or 15 minute shower allowed? What about a guy who takes twice the number of showers, but for half the length of time? What about cooking a roast dinner vs microwavable meals? How about standing charges that exist whether you use nothing or a lot?

Split them evenly, or if your lodger is away every weekend, split the bill by the total number of "person-days" and everyone pays a share.

eg: you there 7 days, 2 weekday lodgers at 5 days each. 7+5+5 = 17 "person-days"

€170 electricity bill. Split it €70/50/50. If that seems unfair for someone who is there Monday evening to Friday morning and goes out to work, versus someone who is there all weekend, adjust accordingly. But Make a ratio and stick to it. You can't go adjusting then for someone who is away for the odd night, or happens to stay one weekend.

Padre_Pio

https://www.boards.ie/discussion/comment/119195291#Comment_119195291

This is good advice. Regardless if someone uses more of X utility, you're still saving money splitting three ways. Don't worry over a few euro here and there

Shutuplaura

I had a few lodgers for about 18 months, after my marriage ended. I was living in my house with a three year old so I have to be a bit choosey.

The first guy I picked was a language student who was a teacher in Turkey. He is a great guy and I still keep in contact with him. He was always super respectful around having friends over - asked me, gave me plenty of notice and cleaned up. He had his faults (his cleaning of common areas was only okay) but because he was such a good tenant I didn't mind. And the money was a lifesaver at a difficult time. I had a Spanish student afterwards who was grand but had her boyfriend around quite a bit. But it was till within the bounds I considered okay.

The final chap was terrible. He smoked in the house, even after I told him not to, left the heating on all the time, even over the summer because he liked swanning around in t-shirt and shorts, and had friends over more than I liked. I came home one Friday and he was smoking a joint in his bedroom. I had flagged it well in advance that my daughter and I would be around that weekend (we often went to my parents house in the country at the weekend). I kicked him out. I did give him a while to find a place but as far as I was concerned that was unforgivably foolish of him and he had no-one but himself to blame. I used to smoke a joint myself in my younger days, but doing that stuff around kids is a big no-no in my book. If nothing else, it would have serious implications for the looming custody fight in the family court if it came up. I was renting this room at a substantial discount because I understood that sharing with an owner occupier and a young child means that there are limits to what someone can do in the house.

I realised several things after the whole thing. Have your red lines, and flag them in advance. Be reasonable....it is going to be someone's home, but look at the things you really don't want to deal with, spell it out clearly and stick to them. Also, accept tenants based on their stability and sensibility, not on whether you find them interesting or entertaining company. I choose the last guy over a Scandinavian woman who annoyed me by saying that she wouldn't be available to babysit. I had never suggested I needed a babysitter and wouldn't have asked her anyway. But on reflection, she was just setting a boundary, which was a wise thing for her to do...even if it did come across as insulting. I choose the last tenant because he was charming, and from an asian country and I thought it would be fun to live with someone from a different country. But he was just a giant manchild.

tvjunki

https://www.boards.ie/discussion/comment/119194057#Comment_119194057

Do not know about that but I have a friend in Dublin and she rents out a room to one of the agencies. Lodger may be there for 1week,2 weeks or a month. She has the room rented all the time. Will not rent longer as she does not want them to think they can stay all the time.

97805

Thanks everybody for taking the time to reply.

My new house (yay!) is in Dublin 1, about 25 mins walk to the Mater, 15 mins walk into O'Connell St. I just got it and was hoping to squeeze the €14k out of between now and Xmas with 3 lodgers and then go back to 2 lodgers for 2023.

I'm out of the house most of the day at work and have sports and other things most evenings so at this point in my life I really just sleep and breakfast at home. Happy to be ships passing in the night as long as the lodgers are no trouble to me or each other.

The house is fully habitable and decent, not fancy - last done up in the early 1990s. The single rooms aren't that big, just enough space for a single bed, small wardrobe and a desk. I'm hoping to get €700-750 plus share of bills (I know this is a horrible amount of money to pay for a single room but it's the only way that I can manage the mortgage and still have a life myself). I don't think I can charge one lodger a grand a month?? That seems like extortion. I was thinking about renting out the double bedroom - if I could get a grand a month for that from one lodger - I would happily use the single room myself until I am in a better position financially. Would somebody pay that, though, for a 1990s room and low end furniture?

Am I better to look for single lodgers or should I consider renting the double room to a couple? I guess a couple might be able to pay a grand a month but would it be easy to live with a couple? Probably not - I might feel like a third wheel in my own house.

I was hoping to get some nurses from the Mater, or maybe postgrads, as lodgers. They should be able to supply decent references and have a stable income.

You're right - I probably need to relax on the bills front - I don't want to police lodgers about the length of their showers, etc. I wouldn't want to live in a house like that as a lodger or house owner. I just don't want somebody who leaves the heating on all day when they're not even there, etc.

Thanks to the people for pointing out the necessity for having boundaries and being tough - not easy for me - but I suppose I'm just going to have to lay down the house rules and enforce them.

I wonder of there are any common things that lodgers do that cause problems? I read that one person had a lodger who bought an electric heater for his bedroom and nearly burnt the house down!

tvjunki

Definately set boundaries.

I rented a room out when I first bought my house. A friend of a friend needed a place as she wanted to save to buy a place as her aunt asked her to move out as she was selling.

I gave a reduced rent of 50 per week when the going was 75 and did not charge bills. That was my fault. Bills doubled. Heating was left on constant when I was not in. I came home from work finding the heating on and no one home. I had it on a timer.

Then the washing machine broke and it had a bra wire in it stuck in it. Definately not my size. She said it was not hers. I paid for the repair. Left it at that.

I was home studying and she did not expect me there and came down with a load of washing in a bag and rushed back up to her room. Turns out she was washing and ironing her friends clothes in my machine and my iron at a fee! That is where the bra wire came from.

She did not want to pay towards tv licence, or sky or bins.

Make sure you put your foot down when you notice things are not right.

Did without the lodger after that and never offered a room either.

97805

https://www.boards.ie/discussion/comment/119196109#Comment_119196109

https://www.boards.ie/discussion/comment/119196109#Comment_119196109

Thanks but under the Rent a Room scheme you have to rent for at least 28 consecutive days to the same person. Short term rentals are not allowed, I suppose to prevent air B and B style letting. Although I suppose I could tell the agency I only do minimum one month, etc. Interesting. Thanks. Will have a think on it.

97805

@tvjunki Gosh, running a business out of your...washing machine. That's unreal. Yeah, I guess I'm afraid of getting a lunatic who is just there to take advantage. Maybe the short term agency lodgers or nurses are the way to go.