Calculations on 4% increase

Discussion in 'Property investment and tenants' rights' started by Moon light, May 19, 2017.

  1. Moon light

    Moon light Registered User

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    Hi, I am looking for help again,
    Tenants moved into property in May 16,
    They are decent tenants and are keeping the place well so I don't want to increase the rent but am thinking I should in order to keep up with market rents, and even right now I am still a good bit below market rent but I live and learn....

    Can you pls tell me if I am using the correct formula, pls note €1100 is the current rent,

    R X (1 + 0.04 x t/m)
    1100 X (1 + 0.04 x 15 /12)

    15/12 = 1.25
    x 0.04 = 0.05
    + 1 = 1.05
    x 1100 = €1155

    so is €1155 the correct new rent, if so and if they accept, this new rent will come into effect in Aug 17, is that right?

    tks so much for any advice,
     
  2. Sarenco

    Sarenco Frequent Poster

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  3. moneymakeover

    moneymakeover Frequent Poster

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    In a rent pressure zone then in May 2018 you can increase the rent by 4%
     
  4. Moon light

    Moon light Registered User

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    ok tks Sarenco - so many rules now I made an error on this one and forgot about the 2 yr freeze,

    I have another property that was let in Aug 14 for 1050, so this one is due for rent increase,
    can you let me know if I have the correct figures here:


    R X (1 + 0.04 x t/m)
    1050 X (1 + 0.04 x 24 /24) (Not sure if the "t" should be 24 or 27, I used 24 here)

    24/24 = 1
    x 0.04 = 0.04
    + 1 = 1.04
    x 1050 = €1092

    is that right? and they get notice in Aug 17 with price increase to take effect in Nov 17,
    sorry for all the questions, I just want to make sure I don't mess up on these,

    tks again,
     
  5. Sarenco

    Sarenco Frequent Poster

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    You should use 27 (not 24) for "t". I suggest you use the RTB calculator to be sure.
    That's correct - 90 days' notice before the rent increase takes effect (and first day of a period of notice is the day after service).
     
  6. Moon light

    Moon light Registered User

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    Thanks Sarenco - u are very helpful,
     
  7. moneymakeover

    moneymakeover Frequent Poster

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    You could also give notice now and increase the rent in August

    By 4%
     
  8. Sarenco

    Sarenco Frequent Poster

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    Last edited: May 19, 2017
    For the property that was first let in August 2014? Sure, if the rent was never reviewed Moon Light can do so straight away (as more than 2 years have passed).

    "t" in that case is the number of months from August 2014 to the date the rent increase will take effect, "m" stays the same at 24.
     
    Last edited: May 19, 2017
  9. Moon light

    Moon light Registered User

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    So it was let out in Aug 15, (my error above I meant to say 2015, not 2014)
    so right now if I give them 3 mths notice of a 4% increase, the "t" is 24, is that right?
    and the new rent takes effect then, ?
     
  10. Sarenco

    Sarenco Frequent Poster

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    Funny - I actually read that original post as August 2015!

    So, to be clear, you can review the rent in August 2017 (after two year moratorium) and you then have to give 90 days' notice of any increase.

    "t" in that case is 27, "m" is still 24.

    Again, it's best to use the RTB calculator to avoid mistakes.
     
  11. Moon light

    Moon light Registered User

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    great tks so much Sarenco,