Changes to rent controls announced - thread for clarifying

Just want to see if I am correct in my thinking. I am a single property landlord. Have had same family in house for about 14 years - they are leaving the house in the next month or two.
Have kept rent low and have fallen considerably behind "market rent" (probably 50-75% behind what other similar houses in the area are getting).
Having done some rough calculations - it would seem that it would be much better for me to keep the house unoccupied until Mar 2026, when I can legitimately increase the rent to market rent.
If I let the house now - then I am stuck with the 2% RPZ increases for 6 years?
 
infinity said:
better for me to keep the house unoccupied until Mar 2026
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That would be my understanding at this time.

We can't be certain until we get all the info; but if you have the option to leave it vacant, thats what I would do.

You'll need to refurb anyway; so you can take your time.
 
Infinity - the rules post March, while they do allow increases to market rates, are much more rigid and are subject to rent control. You'll be locked in to a six year tenancy with very limited rights to evict and the current rent caps until year 6. At year 6, you will be entitled to increase the rent to the market rent, but large increases in 2032 will, I think anyway, be stalled by the political system.

Now that your place is vacant, you should consider all your options like selling, renting to short term tenants only, renting to a family member etc.
 
Greenbook said:
You'll be locked in to a six year tenancy
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as of now tenancies are unlimited
Greenbook said:
with very limited rights to evict
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Same as currently - post 03/26 can still look to sell or for own / family use after 6 years.
Greenbook said:
and the current rent caps until year 6
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As of now max increase 2%. No ability to get to market rent, unless property untenanted for 2 years.

Post 03/26 can set to market rent if tenant vacates voluntarily.

The major change in my view is that the entire country is an RPZ.
 
DannyBoyD said:
as of now tenancies are unlimited
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Yes, but you can evict to sell or move family it at any time
DannyBoyD said:
Same as currently - post 03/26 can still look to sell or for own / family use after 6 years.
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Yes, correct, but you have one shot at evicting to sell every 6 years. If you mess up the paperwork (and I suspect that they'll make it complicated), you'll be locked in for another 6 years. If you are a large landlord (above 3 properties), you can never evict except for breach of tenancy terms

DannyBoyD said:
Post 03/26 can set to market rent if tenant vacates voluntarily.
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Correct, but landlords have been able to do that since time immemorial - you could do that also outside rent pressure zones

My view is that the new rules are of little real attraction to landlords. Sure, we've gotten back the right to reset the rent when a tenant leaves themselves, but in return for that we have permanent very strict rent control (personally, I've little faith in getting a high increase at year 6) and a much restricted right to vacant possession if you are a small landlord and its entire loss if you are a large one.

My view is that unless you can ensure that you have a continuous flow of short term tenants, the risks of being a landlord - a permanent or semi permanent tenant at lowish rent with you responsible for all repairs, maintenance and improvements - are too high to make this a worthwhile investment anymore.

Certainly, if I was somebody who had €300k in the bank, which is on average about the minimum you need these days to buy something decent - I would not be putting it into residential property.
 
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Greenbook said:
if I was somebody who had €300k in the bank... I would not be putting it into residential property.
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What would you put it in to instead Greenbook? You're selling up properties aren't you? What are you going to do with that money?

I think it would be useful to have a thread to help landlords and prospective landlords.

A break down of:

1. How to assess the value of their property as an investment, many accidental landlords probably don't know how to do this.

2. To highlight the sorts of returns that are achievable via alternative investments e.g: Equities via ETFs and Conglomerates.

3. The value of simply maxing out tax relief in to AVCs.

4. Other wealth building strategies such as making your home more energy efficient, shopping around for better deals on home utilities etc..

The property obsession is deeply ingrained in the Irish psyche. Maybe some clear cut steps to follow that can expose the fallacy of wealth building through property investment could serve as a wakeup call and a deterrent to holding on to the misguided belief that investment property ownership equates to wealth, prestige and success.

All this information is already on this site but maybe one central location that discusses it in a methodical way... like how the Single Pension Scheme thread in the Public Sector forum details that pension scheme and exactly how you can augment your pension benefits with AVCs.
 
CharlieMac said:
What would you put it in to instead Greenbook? You're selling up properties aren't you? What are you going to do with that money?
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Personally, I am looking at commercial property. Also, shares which carry a decent dividend, bank, insurance company shares.

Yes, I think it is a good idea to have a thread on alternatives. I'd certainly find it useful. I know that residential property is now way too risky for me, but I'm still researching the alternatives.
 
DannyBoyD said:
Not in RPZs
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Yes, but for the many decades before RPZs they could. They could also do so elsewhere in the world as well. Our rent cap system, where the rent is tied to the property was unusual apparently TCD paper (page 2).

Anyway, we'll have to agree to differ. My view is that in return for getting back something we always had, we've now got a much restricted or no right to vacant possession with the risk of having to find another cash landlord to buy at a discount plus permanent and country wide rent control. The RPZs were introduced due to 20% annual increases in central Dublin and Cork City. I can't see any government allowing significant rent increases from 2032 onwards. Between tenancy rent increases may end up recontrolled in some manner again. Governments have the tendency to keep the bits they like - limited right to vacant possession and rent control - and 'ban' what they don't like - market rate rents
 
Another question.
This part is clear enough. A new tenancy that starts after Mar26 will be for a six year period with rents capped at 2%. No changes if the tenancy rolls on for the next six years, except the 2% annual increase. When the tenant voluntarily vacates at the end of the six year cycle, a new tenancy rent can be re-set to whatever the market rates are at that time.

I’m not clear about what happens if the tenant voluntarily vacates say after 2 or 3 years as that would be midway through the six year cycle. When a new tenancy starts, could the new rent be set at market rates at that stage?
In other words, can the rent be reset to market rates at the start of every new tenancy no matter how long the previous tenancy lasted?
 
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