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Just given tenants notice - Am I doing the right thin?

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  • 26-02-2019 12:35am
    #1
    Hannaho
    Registered Users Posts: 722 ✭✭✭


    Hi! I'm really worried about the new legislation - Residential Tenancies (Amendment) Bill, 2018- I know it has quite a way to go to be passed, but it is on it's way - and there is some possiblity of it being passed. I had good tenants, though there is only one of the original tenants there - but the legislation is making me want to sell in Ireland, and buy back in the UK, where I work part-time - 2 days a week, and my daughter will be going to college there. The rental property had no mortgage, and was manged by a letting agent. After I put 50% of rent away for tax, I was left with 1k from the rental property per month - this supplemented family income, but then there is the hassle of rental return each year. Any advice/comment on this would be welcome.


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    #2
    utmbuilder
    Registered Users Posts: 467 ✭✭utmbuilder


    if its in dublin it could be a good pension.

    uk property prices probally have a way to go before they bottom,

    if its outside dublin you may just be seeing a peak now, as new builds come online at a rate of 100 homes per quarter.


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    #3
    utmbuilder
    Registered Users Posts: 467 ✭✭utmbuilder


    on the having a tenant leave you seem to be in the know and are ready to bear the blunt of all the marketing telling tenants to stay and how much rights they have, make sure you have a good 10 months mortgage put aside incase **** does go wrong you dont want to ruin your credit after taking care of it all your life by them not paying for a year


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    #4
    tretorn
    Closed Accounts Posts: 1,800 ✭✭✭tretorn


    I gave tenants notice too, that legislative change scared me and I just want the house back.


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    #5
    Hannaho
    Registered Users Posts: 722 ✭✭✭Hannaho


    Thanks to both of you for replies. Tretorn - I'm glad I'm not the only one scared by the propsective legisation. UTMBuilder - there is no mortgage on the property. I bought it 27 years ago for 33.5k- After extending it, it's probably worth about 480k now. It was our ppr until December 2016. Re property in UK bottoming out - I understand Manchester is booming in terms of property prices, as people moving north from London to somewhere more affordable - Greater Manchester is where we would like to buy, or else West Kirby/Hoylake on the Wirral.


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    #6
    tretorn
    Closed Accounts Posts: 1,800 ✭✭✭tretorn


    Will you be caught for a lot of Capital Gains Tax.
    You made a good investment.
    I spoke to an estate agent last week, he thinks property prices are falling and another recession is on the way.


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    #7
    Hannaho
    Registered Users Posts: 722 ✭✭✭Hannaho


    Yes, I made a good investment - my mother gave me the 5k deposit all those years ago. I don't think we'll be caught for that much CGT as it was our ppr until December 2016, and I spent about 100k doing it up in 2010. Re recession - an estate agent told me that last week - that the talk is of another recession in 2020. The good times never last long!!


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    #8
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    While I'd value an estate agents opinion on the current state of the property market, I'm not convinced they'd be any better at predicting recessions than the rest of the population.


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    #9
    GGTrek
    Registered Users Posts: 834 ✭✭✭GGTrek


    Hannaho wrote: »
    Hi! I'm really worried about the new legislation - Residential Tenancies (Amendment) Bill, 2018- I know it has quite a way to go to be passed, but it is on it's way - and there is some possiblity of it being passed. I had good tenants, though there is only one of the original tenants there - but the legislation is making me want to sell in Ireland, and buy back in the UK, where I work part-time - 2 days a week, and my daughter will be going to college there. The rental property had no mortgage, and was manged by a letting agent. After I put 50% of rent away for tax, I was left with 1k from the rental property per month - this supplemented family income, but then there is the hassle of rental return each year. Any advice/comment on this would be welcome.
    In my opinion, selling in Ireland is the smart move for small to medium landlords (in your case being the property your PPR for so long your CGT liability will be limited). Investing in the UK would make sense only after some clarity on the Brexit (especially deal or no deal).


    I am sellling everything too, taking capital gains and goodbye Ireland. Half of my units are vacant already and most of the remaining ones will be too soon. I am sorry for most of my tenants, but most of them understand that I am not a charity and I have to follow the best interest of my family.



    There are currently two pieces of legislation running through the Oireachtas and that have passed 2nd stage:


    - the absolutely crazy communist Anti-Eviction bill which is opposed by the government and only went through due to the abstain votes of FF. If this bill sees the light of day after committee stage it will cause a massive shut-down of the Private Rental Market in Ireland. I believe that since it is grossly uncostitutional and the govvie is opposed, the likelyhood to become law anytime soon is low (at least until 2020 elections).



    - then Residential Tenancies (Amendment) Bill, 2018, which, unlike what you think, will become law quite soon. Murphy is as usual overoptimistic: https://www.breakingnews.ie/ireland/housing-minister-hopes-rent-register-legislation-will-be-in-place-before-easter-recess-904388.html It is not going to become law before Easter due to the massive amount of emergency legislation that the government has to go through for a possible no deal Brexit which takes priority over a relatively non urgent and damaging bill like this one. However in my opinion it will become law before the summer recess. If you read the thread in this forum about this legislation, the biggest worry is not what is currently in the bill, but the "unknown" amendments that Murphy will try to push at the very last moment (like Coveney did in 2016 for the RPZ). For sure nothing good for small landlords.


    The RTB stats for 2018 that will only come out in the summer of 2019 will definitely show that landlords numbers are decreasing (this is bad for the govvie and RTB media propaganda) and maybe even the number of tenancies, unless the REITs are managing to cover quickly the tenancies closed by small landlords.


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    #10
    3DataModem
    Registered Users Posts: 3,943 ✭✭✭3DataModem


    tretorn wrote: »
    Will you be caught for a lot of Capital Gains Tax.
    .


    It was his PPR till end 2016, plus the years 'grace' brings him up to December 2017, so only the change in value in the last 15 months will attract CGT.


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    #11
    Fian
    Registered Users Posts: 2,187 ✭✭✭Fian


    Hannaho wrote: »
    Hi! I'm really worried about the new legislation - Residential Tenancies (Amendment) Bill, 2018- I know it has quite a way to go to be passed, but it is on it's way - and there is some possiblity of it being passed. I had good tenants, though there is only one of the original tenants there - but the legislation is making me want to sell in Ireland, and buy back in the UK, where I work part-time - 2 days a week, and my daughter will be going to college there. The rental property had no mortgage, and was manged by a letting agent. After I put 50% of rent away for tax, I was left with 1k from the rental property per month - this supplemented family income, but then there is the hassle of rental return each year. Any advice/comment on this would be welcome.

    If you would like to sell up the rental property go ahead.

    However if you are doing that because you are nervous of the risks in potential forthcoming legislation I suggest you would be very foolish to buy in UK, unless you intend to retire there, because you are exacerbating your risks not reducing them. You will be running a large currency risk and the risks for sterling are generally to the downside with Brexit coming up.

    Think of it like this - would you be comfortable changing the value of the house into sterling and putting it on deposit in UK or would you prefer to keep it in Euro?

    There are other places you can invest without running the currency risk - like germany or the netherlands, and there are plenty of alternatives to property that you can invest in and generate a passive income from. Judging by the "5,000 all those years ago" you invested I imagine you are approaching retirement which is a time to become more risk averse - not a time to engage in currency speculation which is what investing in british property indirectly amounts to.

    Of course if you intend to retire in the UK then ignore all of this - if you are investing in the currency you are going to use to live on.


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    #12
    Hannaho
    Registered Users Posts: 722 ✭✭✭Hannaho


    Thanks to all of you replies. I am going to sell. Flan, re the UK. I work in the UK 2 days a week, and do eventually want to retire then - I'm 53, so unfortunately, have another few years left to work! I want to move back to the UK. In my field, there are far better opportunities. I came back to Ireland 18 years ago to raise my children, as I felt this was a better place to raise them, especially in terms of State schooling at that time - I bought my house here in my 20s before I had children. I have no regrets about that, but I've missed a lot of work opportunities and opportunities for promotion, or opportunities to explore different avenues of my work - so my kids are college stage now, and don't want to remain in Ireland. One wanting to do law and the other studying law - realistically, unless they have connections here they're not going to get on in that field.


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    #13
    rainyrun
    Registered Users Posts: 179 ✭✭rainyrun


    Just did the same myself this week. I rent out one property and I was considering taking it back to sell later in the year or next year, however when I heard about the impending legislation I gave immediate notice.


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    #14
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    3DataModem wrote: »
    It was his PPR till end 2016, plus the years 'grace' brings him up to December 2017, so only the change in value in the last 15 months will attract CGT.

    That is not the way it works. It is the increase since he purchased divided by the proportion of time the property was not or not deemed to be a ppr which is reckonable for CGT. If a property was owned for 10 years and a ppr for 5 of those years CGT would be based on 50% of the difference between purchase price and sale price.


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    #15
    Mitzy
    Registered Users Posts: 238 ✭✭Mitzy


    rainyrun wrote: »
    Just did the same myself this week. I rent out one property and I was considering taking it back to sell later in the year or next year, however when I heard about the impending legislation I gave immediate notice.

    I am doing the same too. It's only going to add to the current crisis. My tenants are excellent but I will give them enough time to find a new place & then put it on the market


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    #16
    Dav010
    Registered Users Posts: 14,001 ✭✭✭✭Dav010


    Same here, tenants in one of my properties are nearly finished building and will be moving out in summer. EA said he could rent it the day they move out as there is huge demand. Not for me anymore though. Too risky.


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    #17
    utmbuilder
    Registered Users Posts: 467 ✭✭utmbuilder


    If the estate agent is any use at all, he should be able to rehouse the people letting off you, through the letting management side of their business. Should greatly improve the time it takes to get tenant out of the property. Pm me if you want a name of a couple of good agents for this.


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