Q: Should you use a letting and property management agent?
A: This will really depend on a number of factors, you should ask yourself the following;
- How much time and energy do you have to dedicate to the management of your rental property?
- Do you live close to the property in question?
- Are you familiar with the rental property environment?
- Are you familiar with the legislation under the Residential Tenancy Act 2004?
- What types of personality to you have? Do you find it hard to say no to possible continuous requests from tenants?
- Are you able to do minor repair works or do you have contacts that will assist you with maintenance matters?
What works for one person may not work for another. Some people prefer to hire the services of a letting and management agent so that the agent’s expenses are taken into account when calculating their return on investment. In this sense, the landlord’s return on investment is nearly, completely stress-free. Whereas other, buy to let landlords do not want to incur agents fees in their return on investment but will more than likely incur a certain level of stress throughout the year on the rental. The real question a landlord should ask themselves is whether the reduction in stress warrants the agent’s fees less the amount of fees that can be deducted on rental income tax. This will obviously vary on a person by person basis and on a property by property basis.
One word of advice is to ensure you get your rental pricing right. If you under -value your property by €100 euro’s a month this equates to €1,200 per year, this amount would have more than likely have paid for an agent to let and manage the property on your behalf. If you over -value the property by €100 per month you may find that there is not much interest in the property meaning it is on the market for longer than it should be not generating any rental yield, again this could end up costing the landlord an extra €1,200 per year.
If you are looking for a free rental valuation on your property contact one of our experienced letting agents on 01 498 4986 to arrange an appointment.
Q: What kind of insurance should a landlord have?
A: A landlord with a buy to let property should look to have landlord insurance in place which normally covers the same as a standard insurance policy as well as cover for a wide variety of tenancy types, like loss of rent if a buy to let property is uninhabitable following an insured loss, or cover for malicious damage and vandalism. Allianz insurance and AXA are two of the largest insurance companies in Ireland covering landlord insurance.
Q: What type of furnishing should an apartment have?
A: When furnishing your property you should source furniture that looks comfortable while still being hard-wearing and easy to clean to ensure you get as long as possible out of the use of it without having to replace it. You should also make sure to save all the receipts for the furnishing of your apartment as you can deduct one eight of the value of all the furniture throughout the property on depreciation against the rental income every year.
Amongst other things, we recommend you lay wooden laminate flooring throughout the property. Where possible avoid carpets as they tend to have to be replaced a lot more frequently than hard wearing laminate flooring.
For further advice on furnishing your rental property contact one of our experienced letting agents on 01 608 7713.
Q: How should I advertise the property?
A: The marketing of a rental property will vary on a property a property by property basis. We recommend you use the advertisement mediums to cover the widest possible target audience base as possible. We will generally use online sites such as Daft.ie, Property.ie, Let.ie as well as external auctioneer boards, in-house advertisement flyers, and displays. Where necessary it can be very beneficial to advertise in local papers or advert magazines. You may also want to contact agents in rental properties vicinity who may have a database of tenants who could be interested in your property.
Q: What documents should I get from interested tenants?
A: Prior to signing leases or allowing a tenant to take occupation of your property you should request the following documentation from an interested tenant;
- Passport/Driving License with your PPS Number attached
- Current employment reference
- Current or most recent landlord reference
- Copy of Bank Statement
- Contact details
You should also follow up on references from employers and previous landlords
Q: Do I need a lease and should I know the law?
A: You are not obliged to have a lease in place however you will lose out on having any security of tenure. For example, if you have a tenant sign a 1-year lease you know that the likelihood is that they will remain in the property for a year and if they break their lease without finding another suitable tenant to take over the remainder of their lease they will lose their deposit. Whereas if there is no lease in place there is nothing to stop a tenant moving into a property on the 1st of January and giving one months notice at the beginning of February and then move out on the 1st of March. This then leaves you to have to spend out more money and time looking for a new tenant, while the property is not generating any rental income.
All residential lettings are governed under legislation which is covered by the Residential Tenancy Act 2004. Landlords should read through and familiarise themselves with this legislation.
Q: Do I need to register with the PRTB?
A: Yes, all tenancies must be registered with the Private Residential Tenancies Board within one month of the commencement of the tenancy using the PRTB registration form or online. Each tenancy costs €90 to register. A double fee applies for late registrations. Failure to register means that a landlord cannot claim mortgage interest as an allowable expense for income tax purposes. The registration fee is an allowable expense against tax.
Landlords must be registered in order to avail of the PRTB dispute resolution service. Tenants will have access to the service irrespective of whether or not the tenancy is registered.
Q: What expenses can I deduct against my rental income tax?
A: Certain allowable expenses incurred may be used to reduce the income tax liability on rental income, these include:
- Qualifying mortgage interest, which currently stands at 75% of interest being charged
- Management fees
- Advertising expenses
- Letting agent fees
- Insurance premiums
- PRTB tenancy registration fee
- Legal fees for drawing up leases
- Mortgage protection policy premium
- Accountants fees for preparing rental accounts
- Refuse and other service charges – if paid by the landlord
- Cost of repairs and maintenance – this covers repairs and general maintenance of a property, however it is not possible to claim for your own time, for example, cutting the grass
- Wear and Tear. Depreciation of 12.5% over 8 years can be deducted annually against the cost of the furniture and furnishings of the property.
Q: Are my Tenants entitled to their Deposit back?
A: This is the biggest cause of disputes between landlords and tenants and is the leading number of cases before the PRTB. Essentially a tenant is entitled to their full deposit back within a responsible time (normally within 7 days) if they satisfy the following:
- They have resided in the property for the full duration of their lease, or if there is no lease in place they have given the adequate notice period under the Residential Tenancy Agreement 2004.
- They have paid all their rent up until vacating the property.
- All utility bills have been discharged or the accounts have been transferred with them.
- The property is in the same condition it was in when they first took over possession less a reasonable level of wear and tear.
- The inventory is the same as when they moved in and nothing has been broken or if it has that it has already been replaced by a similar item of the same quality.
However, if a tenant moves out before the expiration of the lease and did not get a suitable tenant to take over the remainder period at the same rent a landlord is entitled to withhold the deposit. Essentially a landlord should not be a penny out of pocket for breach of a fixed term lease and is entitled to chase the tenant for the remainder of the rent they would have received under the lease had it not been broken. However, a landlord is obliged to mitigate his loss by putting the property back up on the market and trying to rent it as quickly as possible.