Questions to the Landlords

winter_leaves

HI,

We are moving abroad in 1 year and thinking to rent out our primary house. Our house in Dublin south suburb, Ber A2 house, semi-D, 3 beds, south west facing, big garden and good furniture. We are thinking to charge 3.5K to 4K a month for rent. Honestly the rent is not cheap and the house is not for everyone. Anyone have suggestions that we would let those butler agency take care this rental or should we do ourselves?

And what the risks of over-staying tenants that one day I want to move back to my house, the tenants have difficulty to move out?

Thanks!

DubCount

Firstly, I would use an agent. You dont want to be the one getting a call at 3AM about a burst pipe etc.

On overstaying tenants. This is a very real risk. You may own the house, but after 6 months, its the tenants home and the law protects them, not you. The process to evict a tenant legally, can take 18 months plus if someone is gaming the system, and that applies even if they stop paying rent. If you think you need the house back at short notice, dont rent it out. Ireland is quite happy to see you homeless rather than provide a quick eviction process.

You should also take some tax advice. Renting out your property for a period could remove some of your principal private residence relief if you sell. In South County Dublin, that may be significant. There is also the tax to be paid on the rental.

Finally, if there are items of furniture etc that you really care about, maybe put them in storage. Thangs can break and tenants may not be as careful as you are.

Princess Calla

That's a massive risk for one year.

I'd use an agency if you do rent it, they have a maintenance team on the books 24/7

Your ppr relief would be calculated in a pro rata basis a year isn't going to make a huge difference.

As you are abroad witholding tax will apply.

To be honest I'd rather a family member live there for free in a caretaker capacity than rent it out to strangers.

Whatever about the risk of belongings needing to be replaced, the risk of returning to no home wouldn't be for me.

3DataModem

1. Use an agent. Aim for a local one with lots of rentals on their books.
2. Pay your taxes.
3. Get the agent to choose a tenant very carefully, on the basis they have a credible reason to look for only a year.
4. Accept the risk that when you want to move back, you may have to wait a bit.

ec_pc

At that monthly price, would you not aim it towards the corporate market. Companies looking for short term rentals for employees coming into the country for a few months. Plus there would be no issues with a corporate client.

DownByTheGarden

On the risks. If you rent it out and you get a tenant who cant find or doesnt want to find other accommodation when they get their notice you might not get your property back for 2, 3 or even 4 years.

3DataModem

https://www.boards.ie/discussion/2058305845/questions-to-the-landlords

I just read "good furniture". Yikes.

You will never, ever, get a tenant to respect your furniture the same way you do. Even a good tenant. You may be ingrained to always use a coaster, or don't use pens near the cherrywood table, but you cannot expect even good tenants to do the same, and wear and tear is expected and normal even in a year.

Stick it in self-storage, put in some solid attractive Ikea stuff, sell the ikea stuff on adverts when you are done. At 3-4k a month rent you can afford it.

Caranica

https://www.boards.ie/discussion/comment/120877224#Comment_120877224

No issues? We had a corporate let to a big IT company and I can tell you there were plenty of issues.

Rent paid late consistently, access doors left unlocked (even open). Loud parties. More people in the house than we were told. Damage to fittings and carpets and more. Corporate lettings are not always the easy ride you think they are.

Flinty997

I wouldn't do it for a year. No way.

Del2005

Do you have somewhere to live when you return for up to 2 years? Even the best tenant will overhold if they have no other options to move to and nothing in the next few years will improve the rental market, you just have to hope they continue to pay rent don't destroy the property. There are no repurcusioms for tenants who overhold, don't pay rent or damage the property apart from eviction after a long process.

The talk of lifetime tenancies could make getting your home back impossible.

For less hassle look at the rules for short term lettings. You'll make less money but will definitely get your home back.

badboyblast

not a hope, you will have CGT issues also.

doughef

this country does not favor landlord like yourself and/or accidental landlords.

you’ll probably end up losing money after you pay tax.

if only you knew of someone that might ‘mind’ it for you while your away and come to a local agreement …

20/20

I am curious is this the house in Dun Oir Kilternan ? Do you even own it yet, as I see from previous comments that you are a renter yourself.

How did you arrive at 4k per month, it seems very expensive for somewhere so far from Dublin city. At the moment its not your principal address .

riclad

If you want to sell the house in future you could be paying 20per capital gains tax on the sale price cos you rented the house for a year. If I was renting now I'd rent to a nurse or a doctor.

ec_pc

https://www.boards.ie/discussion/comment/120900220#Comment_120900220

Not necessarily, you'd need to check with an accountant on that. and CGT is 33% but only applies from the house value at time of first rental.

badboyblast

https://www.boards.ie/discussion/comment/120901044#Comment_120901044

True and also the tax is calculated on the time spent living there as a PPR as well as the time spent let out.

beertons

How close are you to a hospital?

k mac

https://www.boards.ie/discussion/comment/120901044#Comment_120901044

Never knew that, could you explain in more detail. Say for example i bought a house for 170k 20 years ago and rented it out in 2015. Value in 2015 125k, but sold house now for 220k....does that mean there is no CGT tax due as the value when it was rented in 2015 is less than the purchase price?? seems doubtful. I know the amount of time spent living in the house as PPR is used in any calculation

DubCount

https://www.boards.ie/discussion/comment/120902296#Comment_120902296

AFAIK that is not how it works. Your total gain (220k - 170k) is 50k. You owned the house for 20 years and rented it out for 8 and used it as PPR for 12. 8/20 x 50k would give you 30k gain. Thats about a 10k tax liability. Thats very rough, there's a bit more to it than that.

The issue for OP is that house prices are not rising now, but may have risen a lot since they bought the house. Lets say the have owned it for 9 years so far and rent it out for 1 year. Cost 300k now worth 900k. After 1 year rental, still worth 900k. 1/10th of the overall 600k gain would be taxable and could leave a CGT liability of 20k in the background. That might eat into any income gained for the rental period, even if house prices are not increasing.

This is stuff you need to discuss with your accountant before making any rash decisions.

Fian

junior doctors need to move around and they go on 6 month placements in various hospitals. That is an option that might suit you - a 6 month rental that avoids a part IV tenancy arising and makes it unlikely they will want to stay on when you want the place back.

Other than that i would not risk renting out for a year. the risk of not getting the place back and needing to pay rent yourself to house yourself is too high.

ButtersSuki

As per many of the above if it’s just for a year I wouldn’t do it. Far too much risk involved.

Just on a point of clarification, you said you’re moving abroad “in” one year? How long are you planning being gone for? If it is just a year I’d personally not rent the place. If it’s for longer then yes I possibly would but you have all of the above to consider. I’d absolutely talk to an accountant familiar with this area on this though.

But as another poster asked - is this even your house? If not, you absolutely should not be renting it to someone else!