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Rent a Room Scheme Experiences

  • 07-04-2022 3:47pm
    #1
    Registered Users, Registered Users 2 Posts: 695 ✭✭✭


    Long story short, due to unplanned/unforeseen financial circumstance I find myself in a position where I will need to rent out a room in my house to maintain a relatively comfortable financial life. As I have a small child who lives with me for a portion of the week it is essential that I have separate spaces. I have read through the revenue requirements regarding the rent a room scheme and I am in a lucky position that I will be able to successfully create a one bedroom self contained unit with minimal alterations to the existing spaces. I have also read the regulations surrounding licencees VS tenants and should be able to have the renter as a licencee. I want to know has anyone done something similar in the past and how did it work out? Is there any problem which is not obvious or pitfalls etc, I appreciate any advice given.



«13

Comments

  • Registered Users, Registered Users 2 Posts: 533 ✭✭✭mike_2009


    Been doing it for 4+ years. Once you get a good licensee it's easy!! Just inform revenue of the rental income each year (around start of new tax year in January). Agree some type of receipt for the rent - an email / reply is what I'm doing. Be clear about sharing spaces / cooking / kitchen times, with my licensee working from home that's created a new dynamic / some tension over break times. I've been on the opposite end of renting a room with a kid staying in the house at the weekend, it was a nightmare for me though, lots of crying/admonishment from the parent, it was awful, would avoid that myself in the future but that was just that particular situation. Make sure you inform licensee in advance though, I'm sure you'll inform them.....best of luck with the screening of applicants..! Get a friend to meet them with you if you want another perspective?



  • Registered Users, Registered Users 2 Posts: 866 ✭✭✭timetogo1


    I've been doing it for a couple of years. Ill do it forever.

    Print out a list of your rules and give them to people when they are viewing. If they're not happy with the rules they don't need to apply. In your rules let them know you have a child. Children cry, that's life. Obviously it's not your goal but they need to know they're sharing a house with a kid and there could be tantrums. They have to be OK with that. If not, they can move elsewhere.

    One of my rules is just leave the common areas as you find them. We haven't had a problem with that ever.

    Get them a dedicated space for food storage in the kitchen.

    I include the bills in the rent (I.e. They just pay a set amount each month) . Simpler for them and me.

    Plus I include some common stuff they can use (fruit, eggs, condiments, milk, washing powder etc.). Saves them buying bulky goods and saves on storage and realistically only costs me a couple of quid extra a week.


    Get them to pay the rent to your bank account. It's easily auditable if required by Revenue. You just tell Revenue each year how much rent you took in. As long as its below the tax free allowance they don't care.



  • Registered Users, Registered Users 2 Posts: 2,760 ✭✭✭endofrainbow


    Make sure anyone you do rent to is Garda vetted - can't be too careful these days and if they genuinely want the room, they'll have no problem with that.



  • Registered Users, Registered Users 2 Posts: 13,911 ✭✭✭✭Dial Hard


    You can't just ask people to get Garda vetted. There are specific criteria involved and renting a room to someone isn't one of them.



  • Registered Users, Registered Users 2 Posts: 695 ✭✭✭JimmyMW


    All, thanks for the reply's above



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  • Registered Users, Registered Users 2 Posts: 932 ✭✭✭GAAcailin


    It sounds like you can create a self contained unit and your tenant won’t be sharing kitchen/ bathroom?

    you should also clarify rules re access to the garden if you have one, also where should the tenant park if they have a car. Where they can / should dry their clothes. Also rules re guests/visitors etc.

    you also need to ‘accept’ that you are receiving rent in return for giving up some of your personal space. Takes some re-adjusting.

    good luck with it



  • Registered Users, Registered Users 2 Posts: 695 ✭✭✭JimmyMW


    Yeah this is where my concern lies really, I have to be mindful of my small man, he is obviously number 1. However I have to be fair on anyone renting also as they are paying for doing so, I am very much in 2 minds on what I will do yet as the alterations are essential in my opinion and will cost circa €10k so giving it a go to see how it pans out is not an option. If I am to do it I will need to commit to it for a significant period



  • Registered Users, Registered Users 2 Posts: 807 ✭✭✭CreadanLady


    My main concern would be for the safety of the child. I think it would be prudent to accept only a female as a licencee, with one condition of their accomodation being that there can be no visitors unless you are informed a week in advance AND approve of the visitor.

    The MFV Creadan Lady is a mussel dredger from Dunmore East.



  • Registered Users, Registered Users 2 Posts: 807 ✭✭✭CreadanLady


    Hang on a second. If the modifications are €10,000 then you probably won't see a return on it for about 2 years. You can hardly be that hard up if you are investing €10k and waiting 2 years for a return on it.

    With a small child, you are better off just keeping your home a safe zone for you and your child. The childs best interests are served by having the home a safe place free of strangers.

    The MFV Creadan Lady is a mussel dredger from Dunmore East.



  • Registered Users, Registered Users 2 Posts: 695 ✭✭✭JimmyMW




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  • Registered Users, Registered Users 2 Posts: 695 ✭✭✭JimmyMW


    My return on investment would be about 1 year due to location, however I am looking at this long term 1 year of tight living and then a more comfortable financial situation for the remainder of the mortgage would certainly be worth it in the long run financially. I do agree with you regarding a family home, ideally you would not do this.



  • Registered Users, Registered Users 2 Posts: 26,083 ✭✭✭✭Mrs OBumble


    It's totally reasonable to apply whatever rules you want re sex of the licensee in your own home.

    Your child's safety is mostly due to your actions: basically don't leave the child unaccompanied with the lodger, any more than you would leave them with a sports coach, scoutmaster, etc.

    Vetting is pretty irrelevant- all it shows is that a person has not been caught.



  • Registered Users, Registered Users 2 Posts: 695 ✭✭✭JimmyMW


    Just to be clear here, there will be absolutely no interaction with my child and any licensee within the dwelling, as stated in my opening post i would be making adaptions to create a 1 bedroom self contained unit. Where my concern started in my head is, lets say a licensee comes in late some night after a night out, is slightly drunk and causes significant noise etc or has someone over and causes significant noise (if you get my meaning), this would be an issue for me, ie waking my small man etc. I cant have that so is it reasonable to count this out in the rules????



  • Registered Users, Registered Users 2 Posts: 26,083 ✭✭✭✭Mrs OBumble


    Your house, your rules. No prob IMHO, though it will cut down your pool of candidates.

    You need to think about:

    What rules you want (no noise, no visitors at all, no overnight visitors, no fúcking). If its the last one, be very clear about it.

    And when they apply (all days or just when your kid is staying).



  • Registered Users, Registered Users 2 Posts: 695 ✭✭✭JimmyMW


    🤣 I love the straightness of that, thanks for the advice, I will consider all opinions above and will have to give more thought myself to the whole situation before i make any decision



  • Registered Users Posts: 98 ✭✭Margaret Clarke


    Obviously OP’s house, OP’s rules, but yikes. Are only men potentially dangerous?

    Have you ever heard of Deirdre Morley?



  • Registered Users, Registered Users 2 Posts: 932 ✭✭✭GAAcailin


    Also remember the minute you earn a cent over €14,000 the whole lot is taxed; in addition you can't deduct bills from this. I.e. any contribution to the ESB, Internet is considered rental income.

    So you can't charge more than €1160 per month rent over a calendar year including bills



  • Registered Users, Registered Users 2 Posts: 1,097 ✭✭✭Roger Mellie Man on the Telly


    Can someone tell me how exactly to declare rent a room income to revenue using their online service please?



  • Registered Users, Registered Users 2 Posts: 26,083 ✭✭✭✭Mrs OBumble


    Statistically, people with penises are far more likely to be convicted of abuse crimes. I certainly think this is probably because they commit more crimes.



  • Registered Users, Registered Users 2 Posts: 122 ✭✭LunaLoo


    Just a suggestion but would it be possible for you to host an English language student? There are lots of agencies looking for hosts for anything from a few days to an entire school term. There are plenty of 18+ as well doing internships as well.



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  • Registered Users, Registered Users 2 Posts: 807 ✭✭✭CreadanLady


    Yes. Practically all violent criminals and sex offenders are male.

    The reality is yes, the level of danger from a woman is very very low whereas it is quite unpredictable with a man. They might be lovely and kind and genuine, or they might be pedofiles. You just do not know .Yeah but that poor woman, Deirdre Morley, was suffering from an untreated mental illness so she was not responsible for her actions and she is as much a victim of the situation as the children. That incident was an indictment of irelands mental health services. Sure the Gardai initially assumed it was the father did it until the became clear that that was not the case.

    The MFV Creadan Lady is a mussel dredger from Dunmore East.



  • Registered Users, Registered Users 2 Posts: 866 ✭✭✭timetogo1


    I can't see any mention of it on their online service, that would be too easy.

    Maybe it'd fit in this section

    Emp / Off / Pen not subject to PAYE

    Income arising from an employment, office, pension or directorship that was not subjected to PAYE.

    That's under Additional Incomes in Manage Your Tax for 2022 in MyAccount on Revenue.

    I'd give them a buzz to be sure.


    I used an accountant (not just for the rent a room) and the Form 11 they used has a section for Exempt Income where they put in the rent a room. You wouldn't want to do a Form 11 just for rent a room though. Major pain in the hole.

    Post edited by timetogo1 on


  • Registered Users, Registered Users 2 Posts: 1,092 ✭✭✭DubCount


    I reckon within MyAccount on revenue, there will be a place to declare rental income and claim rent a room scheme without needing to submit a Form 11



  • Registered Users, Registered Users 2 Posts: 932 ✭✭✭GAAcailin


    If your rental income is less than 5,000€ In the tax year you can use MyAccount; greater than 5k must be done via Form 11

    the online Form 11 isn’t bad to complete, I do it every year

    https://www.revenue.ie/en/property/rental-income/irish-rental-income/how-do-you-declare-your-rental-income.aspx



  • Registered Users Posts: 98 ✭✭Margaret Clarke


    Just shows you how sexist the system is.

    Why would the Gardaí have just assumed the father did it?

    How do we know Alan Hawe wasn’t suffering from a similar condition? He never lived to face a trial or see a psychiatrist.



  • Registered Users Posts: 98 ✭✭Margaret Clarke


    or just rent out and pocket the cash. Over €14k or not.



  • Registered Users, Registered Users 2 Posts: 20,198 ✭✭✭✭Donald Trump


    If you create a separate "apartment" you might end up with you licensee being found to be a tenant!


    (Your agreement won't necessarily be found to be what it says on the contract)



  • Registered Users, Registered Users 2 Posts: 347 ✭✭DFB-D


    If you have no other income other than exempt ROR and employment income, you can use form 12.



  • Registered Users, Registered Users 2 Posts: 69,536 ✭✭✭✭L1011




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  • Registered Users, Registered Users 2 Posts: 4,812 ✭✭✭Addle


    How much amenities can you reasonably fit in 1 room?

    Will the lessee be able cook and do their laundry?



  • Registered Users Posts: 701 ✭✭✭danoriordan1402


    This is a point to consider as well, its a bit of a grey area, revenue say "The room or rooms can comprise a self-contained unit within the residence such as a basement flat or a converted garage attached to the residence". and "Landlords are generally required to register details of their residential tenancies with the Residential Tenancies Board14 (previously the Private Residential Tenancies Board), including, for example, where the tenancy relates to a self-contained residential unit in the landlord’s own residence. However, the requirement to register a tenancy does not apply where the landlord and tenant are sharing the same self-contained unit.

    but then if you look at the RTB site it states that their remit does not extend to the Rent a Room scheme (where the landlord and the tenant share the same self contained property).



  • Registered Users, Registered Users 2 Posts: 20,198 ✭✭✭✭Donald Trump



    I don't know this for certain, but I am assuming that it is possible that Revenue might consider your "visitor" to be a licencee for the purpose of income tax ............. while a court or the PRTB might consider them a tenant - thus accruing tenants rights.



  • Registered Users, Registered Users 2 Posts: 3,773 ✭✭✭C3PO




  • Registered Users, Registered Users 2 Posts: 1,266 ✭✭✭meijin


    it certainly will!

    per https://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html

    "While renting out a room that is part of your home is not covered by landlord and tenant law, renting out a self-contained unit is covered"



  • Registered Users Posts: 701 ✭✭✭danoriordan1402


    Just curious, I wonder would an area with separate living space, bathroom, kitchenette be covered under tenant law if there was a permantly locked door between it and the main house space.



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  • Registered Users, Registered Users 2 Posts: 695 ✭✭✭JimmyMW


    There will be a linking door and they wont have total exclusivity to the space, therefore should be a licencee



  • Registered Users, Registered Users 2 Posts: 695 ✭✭✭JimmyMW


    Not offering one room, would be potentially offering the following in separate rooms

    1 x Bedroom

    1 x Shower room & WC

    1 x Kitchen

    1 x Living/dining room



  • Registered Users Posts: 17 Jaysus_1984


    If this space has an independent entry that doesn't go through the house, your lessee might start accruing part IV tenancy rights. You're probably better off sharing the kitchen or something and working out a timeshare to ensure the arrangement cannot be treated as a de-facto independent living unit.

    Its quite easy to ensure your kid's safety - ensure the person has a good stable job, is not prone to late nights/parties and doesn't intend inviting overnight guests over. Well settled single people (man or woman) over the age of 35 are typically quite safe to have around kids. Younger people are slightly more rambunctious, understandably so, so just screen who comes in.

    Garda vetting is not a reasonable ask - its hard to make a case for that, even if you have a kid. Just get job and previous landlord references, including LinkedIn profiles and do your own due diligence.



  • Registered Users Posts: 2 dk123


    if i take in a licensee or two in my private residence and i pay for the electricity and oil [heating]myself out of my own account will this expenses payment by myself be considered separate from the 14000 euros p. a. tax free ?



  • Registered Users, Registered Users 2 Posts: 932 ✭✭✭GAAcailin


    It’s not considered separate; daft but any money you receive from the tenants is included in the 14k



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  • Registered Users, Registered Users 2 Posts: 3,796 ✭✭✭RichardAnd


    Just make sure that you interview and vet anyone whom you rent a room to. Many years ago, I was playing in a band with a lad who rented out a room to a guy without doing any diligent background checks. To say that there were problems would be gruesomely unstated. Some of the stuff that I personally saw was comedy gold, but I can't relate any of it here; it's too spicy. What I can say is that when my friend did eventually have to kick the guy out, there was a lot of trouble.

    Your home is your sanctuary. Be wary of whom you let in!



  • Registered Users, Registered Users 2 Posts: 6,289 ✭✭✭Claw Hammer


    The revenue do not care whether the person is a licensee or a tenant. All they care is that the taxpayer and the other occupant are under the same roof, even if there are 2 dewllings under the roof.

    The RTB will consider the occupant of a self contained dwelling as a tenant.



  • Moderators, Recreation & Hobbies Moderators Posts: 4,514 Mod ✭✭✭✭dory


    It depends. If you take in €500 per month from each of them - so €12000 in a year, and from that money pay all the bills then it's fine. If you get €2,100 in bills money on top of the €12,000 (even if it comes out of your account after they put it in) then you have to pay tax on the whole €14,100.


    I'm doing RaR at the moment. They money is great but I'm finding it very tough to share my space. Don't think I'll do it again after next summer.



  • Registered Users, Registered Users 2 Posts: 1,872 ✭✭✭mrslancaster



    One of my neighbours is doing RaR with a student since September. They rent an en-suite bedroom (first floor) plus use of a living area with mini kitchen which is in the converted garage. It is not actually self contained as the family and student use the same front entrance and the same staircase to the bedrooms but my neighbour said she rarely sees her student who doesn't use any of the family areas as the door into the converted garage is in the hall just inside the front door. Could the rtb deem that set-up a tenancy?

    Post edited by mrslancaster on


  • Registered Users Posts: 101 ✭✭JohnRock


    Just be careful if you're renting out a self contained unit in your home, it may no longer fall under a license agreement but a tenancy agreement. If so, you will also be required to register with the RTB.

    There's more information here: https://www.citizensinformation.ie/en/housing/owning-a-home/home-owners/renting-out-a-room-in-your-home/



  • Registered Users, Registered Users 2 Posts: 6,289 ✭✭✭Claw Hammer


    If you create a self contained unit, the tenant gets RTB rights with one small enough exception.

    You may still qualify under the rent a room scheme for tax relief. if the unit and your residence are within the envelope of the same house.

    Converting part of your home also devalues your property and also affects you insurance and mortgage as well as requiring planning permission.



  • Registered Users, Registered Users 2 Posts: 2,262 ✭✭✭sprucemoose


    planning permission is dependent on what exactly is being done though, may technically not be required if it is very minor



  • Registered Users, Registered Users 2 Posts: 6,289 ✭✭✭Claw Hammer


    Subdividing a planning unit always needs planning. Creating two dwellings where there is one is a sub-division. I know someone being summoned to court for doing just that.



  • Registered Users, Registered Users 2 Posts: 2,262 ✭✭✭sprucemoose


    hence why i said it depends on what exactly is being done



  • Registered Users, Registered Users 2 Posts: 10,724 ✭✭✭✭tom1ie


    Is a self contained unit one with a shared entrance and a shared kitchen?

    I presume this setup would still fall under RAR?



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