First time landlord in Dublin City

Manion wrote: »

I'm in a position of becoming an "accidental landlord" and I'm somewhat lost as to where to start. The property is my old family home and I do not wish to sell it at this point in time. Various people have been giving me arm chair advise such as:

• Ask for 2 months rent as a deposit and rent in advance.
• Put into the lease a 4% rent increase year on year.
• Put clear break clauses in the lease.
• Ask for references which can be personally validated
• Don't use a letting agent
• Put a bed in the down stairs front room and turn it into a 4 bed rental.
• Don't put money into the property until it's rented so that it can be tax deductible.
• Channel rental income into a Pension fund to avoid income tax (seems legitimate)

What advise would you folks offer to a first time landlord?

Get some professional advice and do some research.

There is some awful advice there really.

- First point re charging a big deposit - don’t see the point really. You can do this but you are going to put off some potentially well suited tenants.

- second suggestion re yearly rent increase. Pointless (unenforceable if not downright illegal)

- third suggestion re ‘break clause’. Essentially pointless and unenforceable. There is maybe one exception.

- forth suggestion re references, good advice. But don’t expect the HR person in the Department of Whatever to tell you much about your prospective tenant.

-fifth suggestion re estate agent. It really depends. The reality is that you don’t know much about what you are doing and some good quality professional support might be a good idea. Honestly, in some areas you could be a lamb to the slaughter. There are thousands of fine tenants out there but you need to be able to avoid the few really bad ones who everybody else is avoiding.

- sixth suggestion re extra bedroom. It really depends on the ‘positioning’ of the property and what you are trying to achieve. This is why an agent might be of benefit to you.

- tax deductibility by not spending any money pre-let. Nice idea in principle but is it actually practical? What kind of tenants would agree to this?

- pension. Not a bad idea but you really need professional advice on this.

One other suggestion. RTB now occasionally run a course about landlord obligations. I don’t know if it is any good, but I suggest you do this course if you get an opportunity. It will give you some awareness of the issues.

If you can find a friend who has experience of this you should beg them for your help.

1. An estate agent is a professional who works in the field of renting property. I think that's what you need, as well as all the other preparation.

2. Are you planning on taking in really rough tenants? Really, the deposit isn't a deterrent and isn't that much use if things get really bad. The fact that an individual can get their hand on a big fistful of cash does not mean that he or she is not going to be a bad tenant. If you have a really bad tenant, the big deposit will just be used as a (groundless) justification to overhold for even longer. On the other hand, there are loads of excellent tenants. You want to get one of these.

3. You need to understand about the legal procedure. By putting a 4 percent increase into the lease as was suggested to you, you would be effectively reviewing the rent a year or longer in advance in advance and setting the increases in advance, at the beginning of the tenancy. This is not permitted. The rent can only be reviewed after twelve months and again every twelve months thereafter. You have to follow the statutory procedure when you increase the rent, no matter what it says in the lease. And no matter what the lease says, you can carry out this review.

Don't be thinking that all rents go up every year. If the rent was set at quite a high level at the start, it may not go up for some time. Pushing up the rent to the edge is not necessarily a good idea. For an easy life as a landlord you want your tenants to stay for as long as possible.

Putting more words into the lease isn't necessarily going to give you more protection. If you write something stupid, maybe it could even weaken your position. If you want to write complex leases, then you need a solicitor, and that will cost you more money (and any funny stuff will probably get disregarded at adjudication or tribunal anyway if it is not exactly in line with the statutory rules for a tenancy).

4. No, if the tenant cannot afford the rent it is not 'grounds for eviction'. The process has a good few twists and turns before you get to evict anybody.

5. Really, try to talk to people who have done this before. Read as much as you can, but you really would benefit from talking to somebody face-to-face to learn about the practicalities. A lot of the information you find online can be about quite extreme situations and some of it is really not very helpful. The training events I mentioned would be an opportunity to meet people in a similar position to yourself, or who are a few years ahead of you.

You don't want to sell but the only advice I can give as someone who has been there is sell, sell, sell. If in doubt, sell.

I truly wouldn't recommend renting your property to my worst enemy. See the front page of todays indo for one of so many reasons

Revenue does not consider rental income as pensionable.

Hard to believe, but true.

You're stuck with whatever rent you set when you start out forever so start €1k a month higher than you expect to get and reduce the price slowly until you find someone now that rent is locked in at the base that you can add your 4% increments onto.

OP, my 2c is that if it is a house, use a letting agent, so you never have to be called about leaks, broken stuff, etc.

The_Conductor wrote: »

I'd seriously suggest you sit down and think out the pros and cons of this.
It may be your family home now- however, once you've rented it- it becomes the tenant's home- you are never ever going to get it back in the condition you leave it to them- and if you have bad tenants, any relationship with neighbours is gone forever.

The only sane advice- given that Dublin prices have peaked- is to sell and lock in your capital.
If you really want exposure to the rental market- buy shares in a REIT.

The current regulatory regime is toxic for small scale landlords- and is only going to get worse (have a look at some of the proposed legislation being discussed in this forum).

Being a landlord is not for the faint hearted- it can be incredibly time consuming- and particularly in the case of a property you have an emotional attachment to- it simply is a recipe for a head wreck.

I'd strongly suggest selling ASAP.

Best advice of the thread so far.

Being a private landlord is very onerous now, especially for people new to it.

Agreeing totally with The_Conductor, the days of the small time landlord are behind us. I would buy shares in a REIT looking at where we are going with rent as against home ownership, as a society.

You could sell to a first time buyer.

Letting agent all the way. We used a local one (Dublin 10/12) and he's got us excellent tenants, one stayed 6+ years and another is there since they moved out, they are now there over 5 years.

If you're thinking of letting I'd strongly recommend using one. Their local knowledge is invaluable (he knew the guerriers in the area, knew they'd turn up with a fist full of cash to the viewing but also knew that they weren't worth the headache).

So my advice if you decide to go down that route is def use one. They also offered a management service which we considered but in the end didn't bother with.

Also I think we're in the minority, we've had great tenants, minimum hassle and it's paying for itself. I make the tax returns (nothing to it - using ROS offline, I got an accountant to show me how to do it once)

Hoping I'm not jinxing myself here by saying we've been lucky.

But on both occasions it's been down to getting the right tenant. And that was down to the letting agent.

So that would be my top tip if you decide to go for it.

Manion wrote: »

All the quoted advice came from one or other of two landlords I currently know in Dublin.

Sure, but it's not really all that helpful. There's nuggets of truth there, but it doesn't provide a useful overall picture. Would any of these people sit down with you and help you plan this and do some viewings with you?

This actually was what I was referred to by other landlords. It seems based on the link I cannot actually use it as It has to be a new property no one I already own?

You are talking about constructing quite a sophisticated tax setup. There is a lot to it.

I've read a fair few of your posts on this form so I'm inclined to believe you know what you're talking about. I've struggled to find a way to make the numbers work and make it worth the time and effort. The property would have an expected monthly rental income of 2500 to 2750 Euro a month based on very similar properties locally. That is both an extraordinary sum of Money and also one that doesn't really seem to justify the hassle given:

• Tax
• Insurance
• Building costs to get up to code
• Accounting costs
• Letting Agent costs
• Maintenance costs.

You should be able to sort that out for 30 grand a year, to be honest.

But this is not easy money. It is an opportunity to work hard to invest, for you and your children's future.

My concern is that it does not seem really possible to dip your toe into the Rental market.

That is correct. It is not possible. It never really was. You are never going to make much money in property in the first year or two, even if you get the property more or less for free. It is not easy money. Invest for the long term, or forget about it.

At the end of the day this was my family home, I grew up in the house. It's extremely difficult for me to think of it in financial terms. I feel morally conflicted with the idea of leaving the property vacant while there is a housing crisis in the heart of the capital. Equally I'm not under a financial pressure to sell now as I have my own home with a small mortgage and decent job. I was happy enough to think of this as my "retirement fund" 30 years from now. It would be nice if I could put the property to work in the intermediate period.

Please don't leave this valuable home vacant. Rent it, or sell it to someone who needs it and invest the money in something you are in a position to manage.

The_Conductor wrote: »

I'd seriously suggest you sit down and think out the pros and cons of this.
It may be your family home now- however, once you've rented it- it becomes the tenant's home- you are never ever going to get it back in the condition you leave it to them- and if you have bad tenants, any relationship with neighbours is gone forever.

The only sane advice- given that Dublin prices have peaked- is to sell and lock in your capital.
If you really want exposure to the rental market- buy shares in a REIT.

The current regulatory regime is toxic for small scale landlords- and is only going to get worse (have a look at some of the proposed legislation being discussed in this forum).

Being a landlord is not for the faint hearted- it can be incredibly time consuming- and particularly in the case of a property you have an emotional attachment to- it simply is a recipe for a head wreck.

I'd strongly suggest selling ASAP.

Best advice on here. OP you are best of selling. Its not worth that hassle being a LL. The government have made it clear they do not want small LL.

You are not an "accidental landlord" you are choosing to enter the landlord business.

Like any new business venture speak to the required professionals - an accountant at least for tax deductions and pension planning and a number of letting agents for quotes/prices etc.

Compare the services of both. i.e. shop around accountants and rental agents.