Managing a Rental

IrishOwl...

I’m looking for some advice.

In a nutshell, my mam has had to move into my sister’s house over the last few months, leaving the home house vacant. We were hoping it was only going to be a temporary thing, but now we don’t see her ever moving back to it.

So, we as a family decided we going to put it up for rent as it’s no good leaving it laying derelict. We can used whatever money earned on it to look after mam. The only thing is, none of us live at home, or close to home anymore. The house is in the midlands, I’m living in Dublin. My sister is down in Cork and our 2 younger brothers are abroad. With my sister looking after mam, it has been decided that I’m best positioned to look after the house.

So in my situation, am I better just approaching a SherryFitz or the likes and getting them to manage it. I know noting about property or the rental market or dealing with tenants etc and I live nearly 2 hours away if anything does arise. We don’t want to sell it as one of the younger lads will most likely take in on whenever they decided to move home. 

What would you guys reckon is the best move?

herbalplants

https://www.boards.ie/discussion/2058330640/managing-a-rental

Definitely not Sherry Fitzgerald, don't think they have a presence in managing in Midlands?

You will be looking at a small local estate agent. Best bet

IrishOwl...

https://www.boards.ie/discussion/comment/121597324#Comment_121597324

Sorry, I didn't actually mean SherryFitz. I was just using them as an example.

There's seems to be a few agents registered in the nearest town, so ill be using one of those if it's the best option.

Thanks,

Cinderella2000

Playing devil's advocate here- assuming mortgage is cleared & house is in mums name...

What does she want to do with the house?

If there's any decision making difficulties, now is the time to sort out *all* affairs. See the Assisted Decision Making Act launched April this Yr.

Im assuming she has full capacity. My thought at this stage would be on who is now legally responsible for the letting costs/ contracts/ taxes on letting this property? How do you protect her rental income, ensure she is the person benefiting from it? Who in the family could take on linking with management company, for potentially years?

I'd be seeking her solicitors support before doing anything more. Her circumstances have drastically changed. Multiple knock on effects on every option open to her, which some may not be in her best interests. As you said, your mums assets needs protecting & her needs must be met. What if they dramatically increase, even further?

IrishOwl...

https://www.boards.ie/discussion/comment/121598273#Comment_121598273

Mortgage is well cleared, so no issues there.

Well I have been nominated to look after this i suppose. Mam just decided at xmas that she didn't want to move back in on her own. She broke her leg last July so she has been staying in the sisters, she has a granny flat beside her house so it kinda works out ideal.

All my sisters 3 kids are under 5, so now that Granny is back on her feet, everyone is delighted that she stays down there.

Down the line, the younger brother entends on coming home and taking over house.

Ive just been tasked with getting the house set up for lease. The fund's will be going directly to mam.

Caranica

Please consider selling. Single property letting is a mugs game. The taxman will take half the income and you've little to no protection from non paying/property damaging tenants. Former "accidental landlord" here. It's one thing to buy a property to rent but to rent out a place with so many memories, it's a nightmare waiting to happen. Done that, still scarred.

herbalplants

https://www.boards.ie/discussion/comment/121598794#Comment_121598794

The OP has stated that the brother will come back and take over the house. So why sell it!

Mrs OBumble

Well I have been nominated to look after this i suppose.

Do you have a signed Power of Attorney that you can show to estate agents, insurance companies, utility companies, her bank, the RTB, etc etc?

If not, then get your mother into her solicitor for advice on this before you try to do anything else. Because legally YOU cannot do much without it. And if the above are any good, they will refuse to talk to you without it.

Donald Trump

https://www.boards.ie/discussion/comment/121598794#Comment_121598794

Income from property is taxed as is any other income. The rate that the OP's mother will pay will depend on her marginal income tax rate. The income for hitting the top rate of tax is around 40k. On the balance of probabilities, I would say it is more likely the OP's mother is not above that. She may well be, but I would not assume she is

Similar to any other venture, it wouldn't be for everyone. Many might be able to manage easy. Many might not be able to manage. In exactly the same way that some might not be able to manage tying their own shoelaces.

IrishOwl...

https://www.boards.ie/discussion/comment/121599039#Comment_121599039

Im not taken over the ownership of the house. All monies, contracts and whatever will be with my mother.

My only duty will be dealing with the potential tennats if there's an issue.

I literally just came here to ask is it an absolute pain in the h**e to manage a rental this way, or we better off just employing a real estate agent to manage that side of it for us.

IrishOwl...

https://www.boards.ie/discussion/comment/121599092#Comment_121599092

Correct....she's no where near taken home 40k a year!

Bicyclette

Before you make any decisions, take a look at the fair deal scheme. Your Mum may not need a nursing home now, but she may need one in the future. It might be worthwhile passing the house over to your brother now, and let the time elapse so that its not included.

Donald Trump

There is also another thing to consider. If a person is living in a house (for the required period) before they inherit it, then there is no CAT regardless of the value.

It is not your scenario, but it can happen that a parent sells a house to move in with a child. The parent passes and leaves the child whatever is remaining of the proceeds. Those proceeds would be liable for CAT (above lifetime thresholds). In theory, the better approach could be for the child to sell their house and move in with the parent.

Donald Trump

Also, if it stops being a parent's PPR, and they later sell it during their lifetime, they will have to pay CGT on a proportion of the gain from when it wasn't their PPR

Mrs OBumble

https://www.boards.ie/discussion/comment/121599426#Comment_121599426

It will become an absolute pain in the hole unless your mother gets proper legal advice.

From a real lawyer, not randoms on the interwebz.

3DataModem

Yes absolutely get an agent.

HOWEVER bear in mind that if she rents out the house, then it impacts her ability to use it in the Fair Deal.

https://www.citizensinformation.ie/en/health/health-services/health-services-for-older-people/fair-deal-scheme/

Grassy Knoll

Personally, I see this as straightforward, you will be helping your mum rent the house out and the issue is one of logistics, is she best to get a letting agent do the admin, etc. In a word, yes, should stuff break, need fixing etc - which it will - they are the contact point and have the tradesmen etc to do this in all probability quicker than you or mum will. They also will assess the potential tenants and save you the hassle there. I speak from experience where I have a letting agent who handles most of this for me. Maybe not as promptly as sometimes I would like, but then to get tradesmen is a nightmare. With your own personal life and lack of proximity to the property you will in all,fairness not be able to,see to,this.

IrishOwl...

https://www.boards.ie/discussion/comment/121599838#Comment_121599838

This is it exactly. I would be time poor trying to help out any tenant, I live almost 2 hours away and work in a office job 9/5 and with 3 small kids myself to keep me occupied at the weekend.

I don't mind taking the calls from an agents and trying to get tradesmen to fix any issues and all that when it comes to it. But I don't want my number going out to tenants, who could end up onto you non stop over the most basic issues. I'm not saying that will happen, but there's always a chance.

I'm meeting mam next week to meet her solicitor about what needs to be done on the legal side of things, and I might tie in a meeting with the local relator while we're at it.

The Ging and I

Defiantly get good legal advice and then you will have all the options.

Grassy Knoll

https://www.boards.ie/discussion/comment/121600785#Comment_121600785

The thing is do you have tradesmen you can get fairly pronto e.g. plumbers … thing with letting agent in my experience is they throw enough work the way of these guys is they can access them quicker than civilians and they have the keys for access, follow up, making payment etc … obviously there is a monthly retainer for this, but fairly modest in the overall scheme of things, again in my experience

Dav010

What will you and your siblings do if the tenant becomes a problem, stops paying rent, or refuses to leave when the house is needed by your brother, or rather, what will your mother do, as she is the landlord?

IrishOwl...

https://www.boards.ie/discussion/comment/121604106#Comment_121604106

Yes I think we're going to go with for the reasons you just outlined. Thanks for your help on the matter.

IrishOwl...

https://www.boards.ie/discussion/comment/121605053#Comment_121605053

Obviously none of that is ideal, but if it comes to that we will just have to go through the process that everyone else goes through in such circumstances.

The alternative is leaving the hose derelict for the next 5/6 years. Which is no good for anybody.

Claw Hammer

You will need power of attorney. If a tenant goes in and your mother becomes unable to manage her affairs there will be no one to take a case to the RTB or the Courts. You will needs access to the rent monies to pay fees as well.

A lot depends on the condition of the house and contents. To have a hassle free life the house needs to be in good condition and with good furnishings to attract a decent tenant. many old people let their houses go down and don't repair, upgrade or improve. Renting out a house with a single socket per room and a kitchen from a period drama set won't cut it. 50 year old sofas and brass beds are another thing to avoid It can be quite costly to put a house in a lettable condition. Just because your mother lived in it doesn't mean it is suitable for the rental market.

IrishOwl...

https://www.boards.ie/discussion/comment/121607395#Comment_121607395

As I mentioned early, meeting the solicitor next week to get all the T&C's in order.

House is very nice, 1970's build, it was extended and upgraded in 99 and got a full renovation in 2018.

Thanks for the advice.