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Selling rental property- advice needed!

  • 11-11-2022 9:47am
    Registered Users Posts: 10 rahenygirl

    Myself and husband were one of many that bought naively back in Nov 2006. We were mid 20s and the property has been the bane of our lives! We paid crazy stamp duty as first time buyers and got 100% mortgage.

    We ended up renting closer to close from 2014 so that we could care for family and the property has been rented since then. The tax bill crucifies us each year and with ECB rate increase we are currently having to contribute €100 each month to pay for the mortgage. Another 19 years still owing. We have decided to sell, and although the house will not sell for price we bought it at, at least we are no longer in negative equity.

    We are wondering if we are correct regarding notice period to give to tenants, who have been in the house paying rent (albeit way below market price) since 2014. It is my understanding that they are to be given a 224 day notice period, which if informed formally on Monday of our plans to sell would take us up to June 2023.

    An estate agent informed us that with winter ban that it would go beyond this date. Could anybody confirm?

    Also I'm aware that nobody will be able to be evicted until March at the earliest. What are people's predictions regarding the impact or this on house prices etc?

    We have been really burnt already and terrified of ending up barely clearing our mortgage having paid it for 16 years. I contacted our bank this week and discovered that 64% of our mortgage payment goes to interest each month, so large amount still owing. All very disheartening. We have a young family and could really do with not being landlords anymore!

    Any advice whatsoever would be SO much appreciated.



  • Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,816 Mod ✭✭✭✭pc7

    Just try do everything by the book I can't find anything regarding how winter eviction ban is affecting notice periods, just the standard notice periods. You could try ring the RTB but don't know if you'll get an answer. As to how the market. Found this on Citizens advice seems to help date wise

    Best of luck. None of us really know how the market will be next Summer, currently sale agreed on my rental and just praying it goes through.

  • Registered Users Posts: 10 rahenygirl

    Thanks for that. Yes I had read both and cannot get through to the RTB. I don't see how the eviction ban will affect us based on this information as no mention of it effecting notice periods. I will follow everything to the letter of the law re RTB.

    If anyone has been given any alternative information pls send on. Really ready to sell this house at this stage.

  • Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,816 Mod ✭✭✭✭pc7

    Do you have a solicitor you know or could get advise from? Might be worth it doing it that way, while a little more expensive it could be worth it in the end.

  • Registered Users Posts: 138 ✭✭Alltherage

    I do not think the eviction ban will impact as the termination date is in June.

    I checked citizens information so I'm not pulling that from the RTB or whatever the government added to the tenancies act(s?)

    Found that searching for winter eviction ban

  • Registered Users Posts: 491 ✭✭SwimClub

    As far as I know anything issued now will have to have an effective date after the end of the ban, if you issue anything earlier and the tenants want to legally challenge, they could potentially get it dismissed as invalid and refuse to leave. It's important to get advice on that, and find the correct date and issue for after that.

    A recession is forecast

    obviously you have a risk there of a price drop and delay in selling the place, while you pay the mortgage. The bank might agree to pause the mortgage while you are selling.

    Other than your outgoing costs now there are other risks on the horizon for landlords, which is why many are selling.

    Legislation banning no-fault evictions outright might be on the horizon for leases of indefinite duration, you might never be able to ask tenants to vacate and with rent controls over time rent might fall way behind market rent and the property value would get discounted when you are forced to sell with tenants in situe.

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  • Registered Users Posts: 10 rahenygirl

    Thanks for the advice. Hope we haven't missed the boat on this one....been sidetracked lately with kids and living! I might never be able to ask tenants to leave??? WTF- how is this even a possibility?

    Personally we got totally screwed from this government- never wanted to be landlords but due to negative equity were given no options for a v long time. What happened to our rights?

  • Registered Users Posts: 3,860 ✭✭✭3DataModem

    You could consider selling with sitting tenants.

    As landlords are compelled to respect the pre-sale rent limit, then good investor landlords are happy to buy places with sitting tenants.

    As a buyer, saves a lot of hassle.

  • Registered Users Posts: 1,039 ✭✭✭DubCount

    Sorry, but this is terrible advice.

    Selling with sitting tenant means your buyer will have to be an investor - nobody buying to live in the property themselves will want to buy a house that has a tenant they need to evict before they can live in the property themselves. Banks will insist on vacant possession to provide a mortgage, so a sitting tenant means the buyer must be an all-cash buyer (no Mortgage). The only buyer that can take on this is an investor with 300-500k plus rattling around in his/her bank account. All this in a market where investors are selling - not buying. When you find this unicorn buyer, expect to provide a discount of 100k plus on the market value of the property. Besides, this mythical buyer is also going to be loving a tenant that you couldn't evict before the sale and who they haven't had a chance to vet themselves.

    Good investor landlords are few and far between these days and they will expect a big discount when there is little competition from other potential buyers.

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  • Registered Users Posts: 1,162 ✭✭✭LawBoy2018

    I think you're being a little dramatic here. Inflation has already begun to slow down in the States and the Fed have stated that they will be less aggressive with rate hikes going forward. For that reason, I think it's unlikely that there will be a big recession here any time soon.

    I find it bizarre that you were unaware of how much interest you were paying each month. Also, why wouldn't you just increase the rent for the property if you weren't making enough profit? The property may be within a rent pressure zone but you could still increase it by 2% each year. Also, surely you're aware that the mortgage interest you pay each month is tax deductible vs your rental income...

    The fact that you haven't increased the rent over the years will make the property less attractive to purchasers seeking to buy-to-rent as the rent cap will still apply for 2 years.

  • Registered Users Posts: 1,039 ✭✭✭DubCount

    As a landlord, Ireland Inc. (government, opposition, media, charity sector etc.) sees you as a greedy fat cat who is abusing the ordinary decent people of this country. They dont care about you, or your rights - they only care about your tenant and their rights. They take the approach that the best way to protect tenants, is to remove landlord rights. There has been a constant stream of new initiatives along these lines, and there is no politician proposing any different approach.

    I dont think you have missed the boat, but its getting close to sailing time. I would not be surprised if this "temporary" eviction ban is extended and extended. Remember, Rent Pressure Zones were also introduced as a temporary measure. Get the eviction notice in play and follow the RTB guidance to the letter (including notifying the RTB on exactly the same day as you issue the notice to the tenant).

    House values may go up a bit (there is still a lack of supply) or down a bit (interest rates increasing and possible recession), but I'm not sure there will be much movement from flat oven the next year. Join the wave of small landlords leaving the market and be happy when you finally get out of the game.

  • Registered Users Posts: 544 ✭✭✭steinbock123

    You could offer it to the tenants to buy. Depending on the rent they are paying, they might be able to stretch a bit further and buy it.

    Unlikely I know, but no harm in asking.

  • Registered Users Posts: 1,297 ✭✭✭walterking

    Rtb have a template for you to use.

    Double check your dates and add a few days.

    The winter ban does not affect leases where a max notice is required.

    Make sure you state that the reason for ending the lease is your sale of the property.

    On the fact you bought in 2006 - I can show you that it was not the worst idea.

    Add up all the very substantial tax relief you got through to 2014 (or longer)

    Add up the rent you would have paid from 2006 - 2014.

    Add the difference between your tracker and the substantially higher interest rates banks charged from 2008 and in particular 2011-2019.

    Do the calculation and a 2006 buyer was better off that a 2014 buyer who rented and waited. Even at the elevated prices.

    The only error you made was charging too low a rent

  • Based on the info on this TRB on the new act, there is no issue for you Op as your notice period will end outside the deferment period anyway. This deferment is not like the covid ones where notice was basically paused. there is no pause beyond the end date of the deferment

    The actual legislation is below

  • Registered Users Posts: 3,766 ✭✭✭standardg60

    Jesus wept. You made your own decision to move, you made your own decision on the rent you charged.

    If you'd stayed in the property you'd just have paid the mortgage and now be in positive equity anyway, how on earth is it the 'Gubberments' fault?

    I'd take an educated guess the rent you were paying in the house you moved to was far less than what you were charging for the one you own. The mortgage was being paid at minimal expense to you for a long time.

    Your OP comes across as an everyone else's fault poor me rant tbh

  • Registered Users Posts: 908 ✭✭✭herbalplants

    To be fair, the poster is asking for advice, she is allowed to. And I would guess the poster bought another house, where she currently resides but kept the old house rented out.

    Living the life

  • Registered Users Posts: 3,766 ✭✭✭standardg60

    Says the person who equivocates us to a communist country in their 'advice'

    Perhaps you should try living in one first and see how many rights you have.

    OP said they rented 🙂

  • Registered Users Posts: 10 rahenygirl

    We were very happy with our tenants for first 4 years so didn't increase the rent. We have increased @2% a year since but they are still paying approx €400 less than similar properties in the area.

    Yes we realise that rent is tax deductible. Still doesn't stop us from getting a minimum €5000 tax bill per year.

    We were not aware of the amount of interest we were paying. We have as you can imagine grown up over past 16 years. Now in early 40s, busy work lives, children, mortgage on our 'forever home.'

    Can I assume you're not an accidental landlord yourself?

  • Registered Users Posts: 10 rahenygirl

    Thanks so much. Yes ready to no longer be an accidental landlord and start going on family holidays with tax money each year!

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  • Registered Users Posts: 10 rahenygirl

    Wow! I'm sorry if you took it up that way. Our new rent was substantially more than what we were receiving as we were moving to an area we wanted to live in and start a family.

    At no point have I complained. I was simply looking for advice. Is this not what this forum is for? What happened to seeing things from varying viewpoints.

    Thanks to all with the solid advice. We will start the ball rolling and inform our tenants.

    Ironically my sister in California bought the same year as us- 2006. Her property is now worth twice what she paid for it! Just feels mad that we have been paying mortgage for 16 years and will make v little when we finally sell the property (and we paid €42k stamp duty back in the date as naive 26 year olds)

  • Registered Users Posts: 10 rahenygirl

    Exactly! Thank you

  • Registered Users Posts: 308 ✭✭DFB-D

    I hope this is a typo, but the rent you pay for a personal residence is not tax deductible against the rent you receive on an investment.

  • Registered Users Posts: 1,162 ✭✭✭LawBoy2018

    Hahah surely they know that. It would be hilarious if not.

  • Registered Users Posts: 3,717 ✭✭✭C3PO

    Excuse my ignorance …. €42k stamp duty! How much was the house?

  • Registered Users Posts: 1,162 ✭✭✭LawBoy2018

  • Registered Users Posts: 28,010 ✭✭✭✭HeidiHeidi

    In 2006 the top rate of stamp duty was 9% - I know, because I paid it on a house purchase that year. It was a total sickener, but there was no indication at the time that it was going to be reduced to negligible levels soon after.

  • Registered Users Posts: 10 rahenygirl

    428k. (Naive young 'uns) Removed the following month. Look we were unlucky, although we have worked hard and have a house over our heads. Just ready to no longer worry about 2nd home/tax bill each year!

  • Registered Users Posts: 10 rahenygirl


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  • Registered Users Posts: 3,860 ✭✭✭3DataModem

    I appreciate the responses like this (and they make sense), but there are places being sold with sitting tenants to cash investors right now, with close to market rent. It's not that difficult to due the due diligence of the suitability of the tenants at contract stage.

    I'm not suggesting it's the only option, or the best option, but it is worth considering, especially considering they are desperate not to be landlords and are unsure how long the tenants would stay. A lot of agents have cashed-up investors looking for yield on their books, and the beauty of a sitting tenant is that there is zero renovations and zero gap in yield.