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Renting out Family Home

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  • 06-04-2020 5:37pm
    #1
    KevinK
    Registered Users Posts: 659 ✭✭✭


    Thinking about going travelling for a year and renting out our family home.

    Would love to here about positives, negatives and potential pitfalls if anyone has done this.

    To be honest having read lots of negatives of being a landlord on here we are a bit nervous of it! But on the other it would probably fund our trip at current rental rates.

    What are the tax implications? As we would still be tax resident in Ireland I presume we would simply pay the tax at the marginal rate which would mean not paying too much tax on this income.

    I presume if we sign a 12 month lease and make it clear to the tenant that the lease is only for 12 months we shouldn’t have any problems getting our house back when we return.


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    #2
    pinkyeye
    Registered Users Posts: 1,293 ✭✭✭pinkyeye


    It will prove very difficult to get it back regardless of what the lease says because various NGO's tell tenants not to move out, to simply overhold.


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    #3
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    pinkyeye wrote: »
    It will prove very difficult to get it back regardless of what the lease says because various NGO's tell tenants not to move out, to simply overhold.

    That’s crazy if true. Seems mad that we would not be able to get our family home.

    Another option we have considered is renting to trusted friends but at maybe 50% of the market rate. Might be worth it if what you say is true.

    I presume rent a room isn’t an option if we are abroad (but essentially just on a long holiday, in fact we would possibly come back once or twice in the year and would stay with our friends if they were renting “rooms” from us.


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    #4
    Caranica
    Registered Users Posts: 10,041 ✭✭✭✭Caranica


    So many negatives, getting it back being number one. Having the place trashed is another. We rented out our previous family home and to say it was heartbreaking and gutwrenching to see the damage that had been done would be a massive understatement. Really wouldn't recommend renting your home out if there is any alternative.


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    #5
    punisher5112
    Registered Users Posts: 24,647 ✭✭✭✭punisher5112


    If you have an attachment to it which I'm sure you do and all your belongings such as furniture, appliances etc then it's a terrible idea.

    Where are you going to be traveling this pandemic could change travelling as we know it ...


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    #6
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    punisher5112 wrote: »
    If you have an attachment to it which I'm sure you do and all your belongings such as furniture, appliances etc then it's a terrible idea.

    Where are you going to be traveling this pandemic could change travelling as we know it ...

    Fair enough, massively attached is the problem.

    I had heard all these negative stories about renting, but was hoping to hear something a bit more positive :) The house would be quite expensive to rent, and I was hoping that this might attract professional tenants with reputations to preserve. House is in south dublin and someone had suggested approaching the likes of Microsoft as they often have employees stationed in Ireland on short term contracts.


    Very true regarding Corona, plan isn’t really for the short term . Hopefully 2022 but maybe the following year. Planned on South America, Asia and maybe Africa.


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    #7
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    Caranica wrote: »
    So many negatives, getting it back being number one. Having the place trashed is another. We rented out our previous family home and to say it was heartbreaking and gutwrenching to see the damage that had been done would be a massive understatement. Really wouldn't recommend renting your home out if there is any alternative.

    That sounds terrible- definitely talking me out of it :(


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    #8
    sunnysoutheast
    Registered Users Posts: 2,072 ✭✭✭sunnysoutheast


    KevinK wrote: »
    That sounds terrible- definitely talking me out of it :(

    If I were in your position I would only entertain Corporate lets.

    I would not enter into a conventional tenancy under any circumstances if I knew I needed to move back into a property.


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    #9
    punisher5112
    Registered Users Posts: 24,647 ✭✭✭✭punisher5112


    Be aware even if renting to family you are still eligible for tax and they would have to pay revenue too.....

    Family and money can be a bad idea and even more so with friends.

    Obviously worst case scenario we are saying and of course you could be lucky and everything go ok but as soon as anyone is in 6 months or more they are well protected and obviously at the moment there is new rules for the time being....


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    #10
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    sunnysoutheast wrote: »
    If I were in your position I would only entertain Corporate lets.

    I would not enter into a conventional tenancy under any circumstances if I knew I needed to move back into a property.

    Do you (or anyone else) have any info on corporate lets? Have heard of them in passing but don’t really know anything about them. Sounds like a better option


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    #11
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    punisher5112 wrote: »
    Be aware even if renting to family you are still eligible for tax and they would have to pay revenue too.....

    Family and money can be a bad idea and even more so with friends.

    Obviously worst case scenario we are saying and of course you could be lucky and everything go ok but as soon as anyone is in 6 months or more they are well protected and obviously at the moment there is new rules for the time being....

    Ya aware that I would be taxed (but hopefully not too much as we wouldn’t be working),why would they have to pay revenue?


    I get the idea about not mixing family/friends and money, but just seems like the lesser of two evils. Also would only consider these particular friends - I guess at some stage you have to have trust in somebody......


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    #12
    punisher5112
    Registered Users Posts: 24,647 ✭✭✭✭punisher5112


    KevinK wrote: »
    Ya aware that I would be taxed (but hopefully not too much as we wouldn’t be working),why would they have to pay revenue?


    I get the idea about not mixing family/friends and money, but just seems like the lesser of two evils. Also would only consider these particular friends - I guess at some stage you have to have trust in somebody......

    20% of rental income needs to be kept and they must pay revenue this as your out of state.


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    #13
    Pkiernan
    Registered Users Posts: 4,315 ✭✭✭Pkiernan


    There is no such thing as a 12 month lease.

    Once tenants have been in the property for 6 months, they gain the full legal right to continue to rent it for 6 years total.

    A written lease does not supersede this right.

    Be very careful.


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    #14
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    punisher5112 wrote: »
    20% of rental income needs to be kept and they must pay revenue this as your out of state.

    I thought this was only if you are residing abroad? We would essentially just be on an extended holiday, would still be paying tax in Ireland etc.


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    #15
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    Thanks for all the replies guys, I think based on this we would only rent to someone we know and trust.

    Researched the corporate lets a bit but don’t think it is an option really. From what I see there is a market but only in a very limited number of ares e.g. Dublin 4, Sandyford, Dalkey.


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    #16
    hurlingman97
    Registered Users Posts: 520 ✭✭✭hurlingman97


    Maybe You could rent to students, final years or even masters, then at least they would move out.
    Negatives would be it would only be 9/10 months not full year,
    they probably wouldn't treat the place as well as you would like,
    also they might not be able to afford it


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    #17
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    hurlingman97 wrote: »
    Maybe You could rent to students, final years or even masters, then at least they would move out.
    Negatives would be it would only be 9/10 months not full year,
    they probably wouldn't treat the place as well as you would like,
    also they might not be able to afford it

    Having been a student myself I don’t think so :)

    In all seriousness it’s probably fine in most cases but I guess that would be the true with any let.


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    #18
    listermint
    Registered Users Posts: 33,755 ✭✭✭✭listermint


    KevinK wrote: »
    Thinking about going travelling for a year and renting out our family home.

    Would love to here about positives, negatives and potential pitfalls if anyone has done this.

    To be honest having read lots of negatives of being a landlord on here we are a bit nervous of it! But on the other it would probably fund our trip at current rental rates.

    What are the tax implications? As we would still be tax resident in Ireland I presume we would simply pay the tax at the marginal rate which would mean not paying too much tax on this income.

    I presume if we sign a 12 month lease and make it clear to the tenant that the lease is only for 12 months we shouldn’t have any problems getting our house back when we return.

    Don't ever ever ever ever ever rent to friends.


    Ever.


    .unless you don't want to be friends anymore


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    #19
    listermint
    Registered Users Posts: 33,755 ✭✭✭✭listermint


    Just to qualify the statement I work with a guy who rented to a trusted friend and his father for two years. He spent the last 9 months trying to get them both out they stopped paying and overhead. The trusted friend sees no wrong in it. Fell on hard times according to him. And still wants to be friends. The owner needed to move in with his new wife.

    There's trusted friends and theirs trusted friends.


    Don't ever bring friends and money together.


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    #20
    ted1
    Registered Users Posts: 23,352 ✭✭✭✭ted1


    punisher5112 wrote: »
    20% of rental income needs to be kept and they must pay revenue this as your out of state.

    Providing they are paying into a foreign bank account.

    Simple solution is to open a N26 or Revolut


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    #21
    ted1
    Registered Users Posts: 23,352 ✭✭✭✭ted1


    The best option is to rent to someone who is renovating their house.

    They’ll not need a 3-6 month lease and will move out.
    You could charge a premium and possible have 2 rents in a year.


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    #22
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    listermint wrote: »
    Just to qualify the statement I work with a guy who rented to a trusted friend and his father for two years. He spent the last 9 months trying to get them both out they stopped paying and overhead. The trusted friend sees no wrong in it. Fell on hard times according to him. And still wants to be friends. The owner needed to move in with his new wife.

    There's trusted friends and theirs trusted friends.


    Don't ever bring friends and money together.
    listermint wrote: »
    Don't ever ever ever ever ever rent to friends.


    Ever.


    .unless you don't want to be friends anymore


    Hmm ok, would you guys let friends stay for free (like housesitting)Seems a bad idea to leave the house empty for a long period also.


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    #23
    punisher5112
    Registered Users Posts: 24,647 ✭✭✭✭punisher5112


    KevinK wrote: »
    Hmm ok, would you guys let friends stay for free (like housesitting)Seems a bad idea to leave the house empty for a long period also.

    If it was a brother or sister for example yes once they were sane and have their own....


    Other worry would be insurance and type of mortgage held.

    Leaving a property empty also needs specialist insurance.

    Friends are a terrible idea as they will most likely shaft you, speaking from experience over money owed..... A few k, never returned.

    One thing would be air BnB but obviously this is restricted now too. You would red someone to oversee it for you and change of planning is needed if you are looking to does this long term and I've yet to hear anyone got it.


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    #24
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    ted1 wrote: »
    Providing they are paying into a foreign bank account.

    Simple solution is to open a N26 or Revolut

    Payment would be into Irish bank account. Having read up on this on the revenue website I think this doesn’t apply in this case. We are just going travelling, not seeking to live overseas. Probably won’t spend more that one month in any one country.


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    #25
    ELM327
    Registered Users Posts: 21,581 ✭✭✭✭ELM327


    Rent on a short term basis with max 5 month term. This way, people arent there long enough to get part 4 rights and overhold


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    #26
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    punisher5112 wrote: »
    If it was a brother or sister for example yes once they were sane and have their own....


    Other worry would be insurance and type of mortgage held.

    Leaving a property empty also needs specialist insurance.

    Friends are a terrible idea as they will most likely shaft you, speaking from experience over money owed..... A few k, never returned.

    One thing would be air BnB but obviously this is restricted now too. You would red someone to oversee it for you and change of planning is needed if you are looking to does this long term and I've yet to hear anyone got it.

    Family may be an option.

    Will have to look into the insurance situation. I wonder what classifies as leaving a house empty, how many months would it need to be, would family staying a few days a month mean it didn’t count as empty. Lucky enough not to have mortgage.

    Think Airbnb is a no go because of planning.


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    #27
    Depotdoc
    Registered Users Posts: 43 ✭Depotdoc


    Kevin,

    Best option here is to speak to a professional who does this on a day to day basis. have always used <SNIP> and found them to be great, completely take the hassle away from any letting without taking away the control.

    I rented my place out while I was away for a year with <SNIP> in their office, give him a call, hes a sound lad. No harm in having a second opinion from someone who does it for a living - <SNIP>


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    #28
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    Thanks, like I said earlier this is a plan for two or three years time. I probably wouldn’t even be thinking about it if it wasn’t for being cooped up at home with this virus dreaming of places we can go (and how we can afford it :))

    Don’t think it would be appropriate to call him now but will hang onto the contact details for future reference


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    #29
    The Nal
    Registered Users Posts: 12,553 ✭✭✭✭The Nal


    Where are you going to travel for a year? :confused:


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    #30
    KevinK
    Registered Users Posts: 659 ✭✭✭KevinK


    Good question :) Everywhere hopefully!

    When my partner and I first met we talked about the dream of visiting every country in the world in our life.

    Not sure how achievable it is really, the UN recognises 193 distinct countries, but going travelling for a year we would definitely hope yeti get to quite a few!

    We went travelling for four months a few years ago and visited 11 countries in South America and Central Asia. We loved it so much and it has been our dream to go again.

    Vague possible itenerary at the moment would be Ireland- Canada- Mexico- Colombia (find somewhere here to learn Spanish for a while) - Ecuador- Peru - Colombia-Panama- Costa Rica - Cuba- back to Ireland for Christmas. Then Ireland- Oman- India- Bangladesh- Thailand - Australia- Solomon Islands- Kiribati- Tuvalu - Fiji- Singapore- Cambodia- Laos- Vietnam - Brunei- Malaysia - Ireland

    Would add Venezuela if the security situation improves there and would love to go to West Africa but not seeing how it would fit into this trip. Yet


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    #31
    nedkelly123
    Registered Users Posts: 100 ✭✭nedkelly123


    Capital gains tax attached to the property too if you ever sell it within 7 years i think .. CAREFUL OP!!!!


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