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First time landlord in Dublin City

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    #32
    km991148
    Registered Users Posts: 4,275 ✭✭✭km991148


    Claw Hammer wrote: »
    I didn't think accountants were allowed advise on pension planning. In any case the o/p will need some qualifying income income i order to consider it.

    Whatever - even more reason to seek out the correct professions and not take random pub/internet advice! :D

    But yes there is a difference between pension planning and paying for advice and different people are allowed to provide difference services. Accountants will know what options are available, but cannot give advice.


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    #33
    Manion
    Registered Users Posts: 1,505 ✭✭✭Manion


    OK, so the plan is to engage a Letting agent to see in detail what my options are and proceed from there. I'm also speaking to a tax specialist to understand what the implications are and what the real earning potential is.

    ednwireland wrote: »
    if it is your old family home is upto the current building regs for renting ?

    http://www.irishstatutebook.ie/eli/2017/si/17/made/en/print

    also do you have a BER ?

    It's very close to the current regulations, Safety latches would be needed on the upstairs windows, carbon monoxide alarms etc. Beyond that just painting and decorating. There is no BER cert, so that's another thing I would need to get.
    antoinolachtnai wrote: »
    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.

    Surely leaving vacant is the best option if I take at face value all the advice of this thread? I've an extremely high pressure day job working for a multinational and family commitments which are way more valuable to me than a few Euro. I'm not really willing to let this take over my life. I just don't believe now is a good time to sell given the close proximity to the Dublin docklands. Even if the bottom does fall out of the property market, I don't really mind sitting on it for 10-20 years.

    Morally I find the idea of leaving it vacant repugnant but financially I don't really see the risk reward paying out yet. If it's government policy to force part time landlords out of the Market (which may or may not be a good idea at the Macro level), I'm under no obligation to sell an asset I believe will appreciate in value over time.


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    #34
    Claw Hammer
    Registered Users Posts: 6,163 ✭✭✭Claw Hammer


    Manion wrote: »
    OK, so the plan is to engage a Letting agent to see in detail what my options are and proceed from there. I'm also speaking to a tax specialist to understand what the implications are and what the real earning potential is.




    It's very close to the current regulations, Safety latches would be needed on the upstairs windows, carbon monoxide alarms etc. Beyond that just painting and decorating. There is no BER cert, so that's another thing I would need to get.



    Surely leaving vacant is the best option if I take at face value all the advice of this thread? I've an extremely high pressure day job working for a multinational and family commitments which are way more valuable to me than a few Euro. I'm not really willing to let this take over my life. I just don't believe now is a good time to sell given the close proximity to the Dublin docklands. Even if the bottom does fall out of the property market, I don't really mind sitting on it for 10-20 years.

    Morally I find the idea of leaving it vacant repugnant but financially I don't really see the risk reward paying out yet. If it's government policy to force part time landlords out of the Market (which may or may not be a good idea at the Macro level), I'm under no obligation to sell an asset I believe will appreciate in value over time.
    Talk about a 180 degree turn. At the start you ave hare brained schemes for tax avoidance and putting tenants in before doing work t save a few quid. Now you are going to leave it empty and forego 100% of the rent and also incur maintenance costs. If it is near the docklands you should do it up properly, get high grade tenants at a high rent and just pay your bills and taxes.


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    #35
    antoinolachtnai
    Registered Users Posts: 9,774 ✭✭✭antoinolachtnai


    Manion wrote: »
    Surely leaving vacant is the best option if I take at face value all the advice of this thread? I've an extremely high pressure day job working for a multinational and family commitments which are way more valuable to me than a few Euro. I'm not really willing to let this take over my life. I just don't believe now is a good time to sell given the close proximity to the Dublin docklands. Even if the bottom does fall out of the property market, I don't really mind sitting on it for 10-20 years.

    Morally I find the idea of leaving it vacant repugnant but financially I don't really see the risk reward paying out yet. If it's government policy to force part time landlords out of the Market (which may or may not be a good idea at the Macro level), I'm under no obligation to sell an asset I believe will appreciate in value over time.

    No, it is a bad option. Firstly, it is an unproductive use of assets. The point of having assets is to use them productively, not store them up speculatively. This is a moral point if you like. You are going to figure out where you stand on morality.

    Secondly you will make your neighbours sad. Neighbours may complain about tenants, but they really don't like vacant houses.

    Thirdly, you still need to pay the maintenance, insurance, tax and electricity standing charges over 20 years, and this will amount to tens of thousands of euros. Insuring a vacant property in the inner city will not be particularly cheap. If the government has any sense it will put an extra tax on people who hold vacant property.

    I don't know if there is much more 'rise' in the value of the property to be hand in the area, unless it is suitable for development. It is an asset that is safe from inflation I suppose. In any case, when you get to the end, your capital gain will be subject to capital gains tax.

    I suppose the alternative for some owners is to maximise the value of the property and minimise the cost and hassle, you could disconnect the electricity and let it go to rack and ruin and so avoid paying LPT.

    If you really can't bear the work and hassle, I (and I'm sure many others) will lease it off you for a few thousand euros a year and manage everything else. Your life will be simple and the taxes and maintenance and insurance will get paid. You will still have your long-term strategy.


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    #36
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    The_Conductor wrote: »

    The OP has multiple posts in the thread- less of the antagonism towards other posters please.

    I am well aware the o/p has multiple posts on this thread. I deduced what I think he meant but another poster has a different view. I am merely asking that other poster what his view is.


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    #37
    LotharIngum
    Registered Users Posts: 210 ✭✭LotharIngum


    Manion wrote: »

    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?

    Yes you can.
    Its a very simple concept they are talking about.
    example is
    Your salary is 80K and you are 45 years old and you are putting 10% into a pension fund and getting tax relief on it.

    You let your property and get 10k a year from it.
    You are earning an extra 10K in rental income not allowed to put it in your pension.

    So you put another 10k from your salary into your pension fund and you get tax relief on it. Easy. It works all the way up to your pension limit for your age.


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    #38
    Manion
    Registered Users Posts: 1,505 ✭✭✭Manion


    Claw Hammer wrote: »
    Talk about a 180 degree turn. At the start you ave hare brained schemes for tax avoidance and putting tenants in before doing work t save a few quid. Now you are going to leave it empty and forego 100% of the rent and also incur maintenance costs. If it is near the docklands you should do it up properly, get high grade tenants at a high rent and just pay your bills and taxes.

    If you reread my original post and subsequent posts you'll see I did not proffer any "hare brained" scheme. I refer to the suggestions as arm chair advise. The entire purpose of the thread was to validate the correctness of said advise. I know it might be unusual but I'm actually open to the advise given so a 180 or 90 degree turn about is reasonable. I'd tried to approach this without priors.

    Tax avoidance is perfectly legitimate. However another poster has already provided references indicating the set up it is not applicable in my instance as I already own the property.

    You recommend modernising the property to get high grade tenants and high rents. This is something I will discuss with the letting agent however I've been quoted up to 60 thousand Euro to upgrade to a "high end" fit out. Arm chair advise on this option has been that I won't make my money back in any meaningful timeframe. It's not exactly a simple option especially as I would need to borrow the fund such upgrades.
    antoinolachtnai wrote: »
    No, it is a bad option. Firstly, it is an unproductive use of assets. The point of having assets is to use them productively, not store them up speculatively. This is a moral point if you like. You are going to figure out where you stand on morality.

    Secondly you will make your neighbours sad. Neighbours may complain about tenants, but they really don't like vacant houses.

    Thirdly, you still need to pay the maintenance, insurance, tax and electricity standing charges over 20 years, and this will amount to tens of thousands of euros. Insuring a vacant property in the inner city will not be particularly cheap. If the government has any sense it will put an extra tax on people who hold vacant property.

    I don't know if there is much more 'rise' in the value of the property to be hand in the area, unless it is suitable for development. It is an asset that is safe from inflation I suppose. In any case, when you get to the end, your capital gain will be subject to capital gains tax.

    I suppose the alternative for some owners is to maximise the value of the property and minimise the cost and hassle, you could disconnect the electricity and let it go to rack and ruin and so avoid paying LPT.

    If you really can't bear the work and hassle, I (and I'm sure many others) will lease it off you for a few thousand euros a year and manage everything else. Your life will be simple and the taxes and maintenance and insurance will get paid. You will still have your long-term strategy.

    There are plenty of investments that do not pay out continuous dividends and plenty of people who are happy with capital appreciation. I think there is some room between derelict (rack and ruin) and vacant. Anyway, as mentioned, the plan is to talk to a letting agent and tax adviser and proceed from there. I can't see myself entering into a binding lease agreement with a third party.
    4ensic15 wrote: »
    I am well aware the o/p has multiple posts on this thread. I deduced what I think he meant but another poster has a different view. I am merely asking that other poster what his view is.

    I think he was referring to me simple putting income into a personal pension fund.


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    #39
    Manion
    Registered Users Posts: 1,505 ✭✭✭Manion


    LotharIngum wrote: »
    Yes you can.
    Its a very simple concept they are talking about.
    example is
    Your salary is 80K and you are 45 years old and you are putting 10% into a pension fund and getting tax relief on it.

    You let your property and get 10k a year from it.
    You are earning an extra 10K in rental income not allowed to put it in your pension.

    So you put another 10k from your salary into your pension fund and you get tax relief on it. Easy. It works all the way up to your pension limit for your age.

    The above is true, but not the pension scheme referenced in the Davy's article nor the one I was referring to. See here

    "One of the great advantages of the rent being paid into the fund is that it is not included as part of your maximum contribution allowance – it is separate income from the table below. The rent is not classed as an actual pension contribution and the full limits remain available."

    So essentially 100% relief on rental income. Property is also not subject to capital gains tax when sold at a later date.


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    #40
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    LotharIngum wrote: »
    Yes you can.
    Its a very simple concept they are talking about.
    example is
    Your salary is 80K and you are 45 years old and you are putting 10% into a pension fund and getting tax relief on it.

    You let your property and get 10k a year from it.
    You are earning an extra 10K in rental income not allowed to put it in your pension.

    So you put another 10k from your salary into your pension fund and you get tax relief on it. Easy. It works all the way up to your pension limit for your age.

    If you are already funding a full pension from your salary you won't get tax relief on any increased payments. The Rental income will be fully taxed and there is a possibility of using the net income to invest in a tax efficient investment.
    That doesn't seem to me waht the o/p was asking. He wanted to avoid tax on the rental income from what I could discern.


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    #41
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Manion wrote: »
    The above is true, but not the pension scheme referenced in the Davy's article nor the one I was referring to. See here

    "One of the great advantages of the rent being paid into the fund is that it is not included as part of your maximum contribution allowance – it is separate income from the table below. The rent is not classed as an actual pension contribution and the full limits remain available."

    So essentially 100% relief on rental income. Property is also not subject to capital gains tax when sold at a later date.

    That is what I assumed you meant. If you are not doing the place up, the best thingf to do is let to students. They turn over rapidly so you will not get caught with lifers.


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    #42
    Lumen
    Registered Users Posts: 31,016 ✭✭✭✭Lumen


    If you sell it, what are you going to do with the money?

    Do you have other sources of income in retirement?

    There are risks with all forms of investment. A year of non paying tenant is annoying. So is seeing your stock market holdings lose 50% in a crash.


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    #43
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    If it's a property you own and you don't need the money nothing wrong with renting it. As long as someone doesn't trash it and it takes 2yrs to get someone out. But that didn't seem to happen that often.


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    #44
    ImARebel
    Registered Users Posts: 793 ✭✭✭ImARebel


    the other option is to hand it over to the council for 10 or 20 years. Know that you won't get it back in the condition you gave it to them but at least they take the hassle out of being a landlord for you. They pay 20% under current market value. Which is still not bad if you don't have a mortgage to cover on it. Might not be something you're into but it's an option

    something else to think about if you don't want to go down the road of being a full blown landlord and handling it all yourself.


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    #45
    Ray Palmer
    Registered Users Posts: 8,364 ✭✭✭Ray Palmer


    Not sure why people are suggesting letting agents as some great thing. Used them a few times and they added nothing but hassle.
    Not letting us know the tenant had an issue. Getting me to organise repairmen. Not contacting the tenants about non payment of rent or informing us.

    For this effort they like to claim a months rent. Now there is no additional working for them to rent a place €500 or €5000. Weird economic theory.


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    #46
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    Ray Palmer wrote: »
    Not sure why people are suggesting letting agents as some great thing. Used them a few times and they added nothing but hassle.
    Not letting us know the tenant had an issue. Getting me to organise repairmen. Not contacting the tenants about non payment of rent or informing us.

    For this effort they like to claim a months rent. Now there is no additional working for them to rent a place €500 or €5000. Weird economic theory.

    Sounds like they got you a tenant- but didn't manage the tenancy. Typically a management agreement with a letting agent costs 10-15% of the gross rent *per month* not just the month's rent upfront........

    Anyhow- most of the larger agents are winding down their property management business- as its not worth it any longer- Lisneys etc- are not taking on new clients.


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    #47
    Claw Hammer
    Registered Users Posts: 6,163 ✭✭✭Claw Hammer


    Ray Palmer wrote: »
    Not sure why people are suggesting letting agents as some great thing. Used them a few times and they added nothing but hassle.
    Not letting us know the tenant had an issue. Getting me to organise repairmen. Not contacting the tenants about non payment of rent or informing us.

    For this effort they like to claim a months rent. Now there is no additional working for them to rent a place €500 or €5000. Weird economic theory.

    for a months rent all they will do is the letting. They will want another months rent to do management. Specialist agents are not the same as experienced landlords who know the local market and what works in it. Agents often just advertise, take the first tenant with deposit and leave the landlord with problems. Some may be good on the standard to work to and the level of demand in an area but the vast majority of EAs see letting as a minority activity.


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    #48
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    The_Conductor wrote: »
    ...Anyhow- most of the larger agents are winding down their property management business- as its not worth it any longer- Lisneys etc- are not taking on new clients.

    Where did you get that from?


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    #49
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Ray Palmer wrote: »
    Not sure why people are suggesting letting agents as some great thing. Used them a few times and they added nothing but hassle.
    Not letting us know the tenant had an issue. Getting me to organise repairmen. Not contacting the tenants about non payment of rent or informing us.

    For this effort they like to claim a months rent. Now there is no additional working for them to rent a place €500 or €5000. Weird economic theory.

    That's just a bad an expensive agent.


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    #50
    Claw Hammer
    Registered Users Posts: 6,163 ✭✭✭Claw Hammer


    beauf wrote: »
    That's just a bad an expensive agent.

    Most agents charge for lettings on a percentage basis.


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    #51
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Claw Hammer wrote: »


    Most agents charge for lettings on a percentage basis.

    Maybe but not a months rent. Thats very expensive and not have it managed.


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    #52
    Claw Hammer
    Registered Users Posts: 6,163 ✭✭✭Claw Hammer


    beauf wrote: »
    Maybe but not a months rent. Thats very expensive and not have it managed.

    Most charge 6% +VAT of the annual rent which works out at about a months rent.


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    #53
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Claw Hammer wrote: »
    Most charge 6% +VAT of the annual rent which works out at about a months rent.

    The one's I'm familiar with don't.

    Average rent is €1600 in Dublin for reference. People pay that and have poor quality of service as described earlier. That's nuts.


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    #54
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    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?

    I use a letting agent, have had few issues and it saves an enormous amount of headaches. My one does an annual property inspection by agreement with tenants. I am extremely lucky in that I have the same excellent tenants (from Baltic region) for over ten years now, they have never been a day late. I supplied pots with compost on the patio and they like to plant them out with flowers. They even touch up paint from time to time. I left a little pot with brush under the stairs. They are quite fussy, but that’s a good thing as they are very house proud. I also allowed pets and this factor attracted my particular tenants in the first place. A lot of continental family types are used to keeping pets (well) in their apartments and houses and value landlords who provide for this. An energetic and responsive letting agent will do all the hard work and the tenants are very happy with them too.

    Best of luck! :)


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    #55
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    beauf wrote: »
    Where did you get that from?

    Here's one referencing Hooke and McDonald:

    https://www.irishtimes.com/business/commercial-property/red-tape-forces-property-agent-to-drop-small-time-landlords-1.3107610

    I'll try find others referencing other estate agency chains- if you really want (or you could try Google)?


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    #56
    Bigus
    Registered Users Posts: 4,939 ✭✭✭Bigus


    Maybe tell the letting agent that you are only interested in a corporate let , and see if this is possible, with this property as it stands, and also if a corporate let avoids the normal pitfalls of letting to individuals.


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    #57
    ImARebel
    Registered Users Posts: 793 ✭✭✭ImARebel


    Ray Palmer wrote: »
    Not sure why people are suggesting letting agents as some great thing. Used them a few times and they added nothing but hassle.
    Not letting us know the tenant had an issue. Getting me to organise repairmen. Not contacting the tenants about non payment of rent or informing us.

    For this effort they like to claim a months rent. Now there is no additional working for them to rent a place €500 or €5000. Weird economic theory.

    I found it to be invaluable that's why I suggested it. Personal experience.

    For little under half a month's rent we've got top notch tenants as a result.

    Each to their own I was just giving the benefit of our experience and outlined why I'd recommend using one.


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    #58
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    The_Conductor wrote: »
    Here's one referencing Hooke and McDonald:

    https://www.irishtimes.com/business/commercial-property/red-tape-forces-property-agent-to-drop-small-time-landlords-1.3107610

    I'll try find others referencing other estate agency chains- if you really want (or you could try Google)?

    That's from 2 years ago. First I've heard about it.


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    #59
    Ray Palmer
    Registered Users Posts: 8,364 ✭✭✭Ray Palmer


    beauf wrote: »
    That's just a bad an expensive agent.
    You seemed to have missed where I said I tried more than one agent. That was the standard rate they were charging haven't used one in 10 years. Everyone I know dumped them over similar experiences over multiple of agents.
    My favourite was they tried to double charge me for a plumber. They called out an emergency plumber for a leaking tap. The bill was something like €300. When I question it I was told that what the plumber charges for emergency call outs. Rang the plumber and asked his rate at it was half. Contacted the agent and they then said it included admin charges on their side. When I explained that I had already paid them admin charges by paying them the agents said everything the did was charged on top.
    Contacted the manager who then claimed it was all a big misunderstanding and he correct the bill. Couldn't explain why it was an emergency though. A few months later I get a call about an electrician being called down for a tripped switch. Again tried to double charge me. It wasn't a mistake it was their practice.


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    #60
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    There's a lot of bad agents. No argument from me. I'm just saying a good agent doesn't do any of that.


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    #61
    Ray Palmer
    Registered Users Posts: 8,364 ✭✭✭Ray Palmer


    beauf wrote: »
    There's a lot of bad agents. No argument from me. I'm just saying a good agent doesn't do any of that.
    What I am telling you from experience is from over 6 agents on top of that another 10 agents reports from people I know personally. That is without experiencing one good agent. It appears to me to be very hard to find a good one rather than being unlucky by getting a bad one.


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