Vacate my home rental for 24mths to qualify for RTB rent increase VS Airbnb rental?

Glenntheman

Background: Our long standing tenants have vacated our 2 bedroom rental property after 15+ years. We have fully complied with the Residential Tenancy Board (RTB) restrictions (Rent Pressure Zone, 2%/4% increase limit, upgrading exemptions considered) but are unable to qualify to increase the rent from the existing €1,000/month to the current market rental of circa €1600/month (In line with RTB national average). We are now considering leaving the property vacant for the RTB’s minimum required period of 24 months before we are permitted to re-rent at market rate. This seems a shame given the current housing problems in Ireland.

We have considered Airbnb rentals exceeding 15 days but not exceeding 30days but are not sure if this affects the RTB review after 24 months.

Does anyone have similar experience, solutions and compliant work-arounds to this problem or direct me to a-another thread that may help? My experience in dealing with RTB has generally been nothing less than disappointing. Thanks

L1011

Is there much demand for that specific rental period in your area?

I wouldn't consider it to be particularly popular - it is longer than most people stay on a holiday (longer than many US visitors can stay due to terrible leave); but shorter than work assignments usually are.

Leaving it empty for two years would forego €24,240 (current baseline +2% after 12 months) in income, which would take over 3 years to recover at the current higher rent - although you could be able to charge even more by then; plus you'll still have upkeep costs over that time.

whatnext

It is a bit of a catch 22. The achievable rent may also influence the capital valuation of the property.

One investor, (medium to large scale private investor) I spoke with recently has sold a couple of properties that were achieving significantly lower that passing market rents and replaced the properties with new / non rent capped properties.

There are other issues with leaving the property vacant, (insurance, tax, utility costs and maints etc). From a purely mathematical / accounting stance sell and re-invest is probably the smart move.

Chat to your accountant, the good thing about an accountant is that they have probably seen someone else’s solution.

I'm out of the business in Ireland for the past 2 years.

jimmycrackcorm

We have considered Airbnb rentals exceeding 15 days but not exceeding 30days but are not sure if this affects the RTB review after 24 months.

Is anyone adhering to those guidelines?
I can't see how the RTB review is affected by use of Airbnb. Short-term lets are excluded from the remit of the RTB.

Claw Hammer

What you have to do is notify the RTB under Section 141 of the Residential Tenancies Acts that the dwelling has ceased to be a dwelling to which the Residential Tenancies Act applies and the reason for it.
You can then use it to house Ukranians €800 a month tax free, AirBnb, leave idle etc until the 2 years has expired.

ottolwinner

what happens if you don’t notify them?

Glenntheman

https://www.boards.ie/discussion/comment/121969418#Comment_121969418

Thanks for this L1011. Probably not much demand for Airbnb in the area for 15-30 days for reasons that you mention. Maybe renewal of Airbnb agreements possible for longer stays (new contracts).

Glenntheman

Thanks Whatnext. Interesting angle on the issue. I would have thought transaction costs to sell and reinvest may have outweighed the benefit but worth checking out with an accountant. Might be difficult also to secure a new property in the same area. This was our first home and might be something we would like to retain for personal reasons but are open to all ideas.

Glenntheman

Thanks Jimmy and thank for the very useful link to RTB regarding exemptions. Not sure if guidelines are adhered to. I also wonder what constitutes a long term let in Ireland….. I see in some jurisdictions you are considered a landlord if you exceed 30 days hosting and subject to different rules🤔

Glenntheman

Thank you Clawhammer for your opinion. This pretty much answers my query and may be a way forward for us. It would be interesting to know if anyone here has actually implemented any of these options over a period of 2 years and successfully re-entered the landlord space under the remit of RTB at national market rent. Thanks again.

Glenntheman

yes we have already notified RTB.

Claw Hammer

https://www.boards.ie/discussion/comment/121977825#Comment_121977825

Some vulture funds are doing it to keep the values up. Be careful about successive Airbnb arrangements. If the same people are living in the house for more than 6 weeks you are getting into a rental type arrangement6 and your occupants could complain to the RTB who m might say your short term letting is a sham and then you are rent capped and have to register and probably pay back some of your income. With the values you are talking about Ukrainian's seem to be the best option.