Checklist to lower the risk for landlord

tom_tom

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To summarise.
Your relatives own a 2nd property. It's currently vacant, not rented and they don't need the rental income. They don't have any intentions of selling the property.
They've been approached by a couple who would like to rent the house from them.
If they hadn't been approached, they have no interest in renting the property.

This doesn't sound like the usual case where their biggest concern is not getting rent paid on time? So what is the concern you're trying to protect them from?

Just make sure everything is above board. Registered with RTB, utilities in tenants names, correct insurance in place, and tax returns filed correctly. They can ask for 2 months rent as deposit.
Thats it ..and If what you said at the end is it then fine ...

1. The tenent stops paying the rent ..they dont need it but it may cause stress.

2. They decide or need to sell in 2yrs ..and having followed the process the tenent won't move
 

tom_tom

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The Limerick story and the like are outliers. I wouldnt loose sleep over that.

Problems do occur however, and the best way to avoid them is by avoiding problem tenants, not easy to identify in advance of course.

I must say I do not like the situation here. Your relatives are not just renting a property, they are renting to a defined tenant. A tenant with a hard luck story. While anyone may have a set-back in life, every problem tenant has a hard luck story. The tenants problems end up being the landlords problems, and thats true even where the problems are genuine and no fault of the tenant.

And I really do not like this one.


is it true that there is no property available to rent in the area. That is very easy to check.
Its true ..I checked ...only apartments..and a couple far to big with monster rent
 

tom_tom

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The Limerick story and the like are outliers. I wouldnt loose sleep over that.

Problems do occur however, and the best way to avoid them is by avoiding problem tenants, not easy to identify in advance of course.

I must say I do not like the situation here. Your relatives are not just renting a property, they are renting to a defined tenant. A tenant with a hard luck story. While anyone may have a set-back in life, every problem tenant has a hard luck story. The tenants problems end up being the landlords problems, and thats true even where the problems are genuine and no fault of the tenant.

And I really do not like this one.


is it true that there is no property available to rent in the area. That is very easy to check.
Interesting point ..but what filters would you suggest to find the best tenent ?

Its a couple with kids, jobs (i don't believe a word i read on linkedin but yeah they are both there) ..they had a property in tbe area but sold it and are now in limbo....the evidence of that is the.kids are in the local school ..that has been verified
 

RedOnion

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they had a property in tbe area but sold it and are now in limbo..
Do you know why they sold it? Were they trying to trade up, or was the house repossessed? What are their intentions - are they hoping to buy in the short term if a house comes available, or rent for the forseeable future?
 

tom_tom

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Do you know why they sold it? Were they trying to trade up, or was the house repossessed? What are their intentions - are they hoping to buy in the short term if a house comes available, or rent for the forseeable future?
Yes ..the sale was verified ..the limbo part unclear but no suggestion or evidence of any issues with the couple....intentions are to buy again
 
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Gordon Gekko

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Long story the couple former home owners in the area are now in limbo there's no suitable houses for rent in the area and approached every possible contact until my relatives name came up

Run a mile.

My read through is that these potential tenants are the entitled sort who’ve run into financial difficulty and can’t accept that they can no longer afford to live there.

People who get into financial difficulty once are more likely to do so again. And then your relatives become the patsies.
 

cremeegg

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Interesting point ..but what filters would you suggest to find the best tenent ?
There is no magic method, but if you can confirm that they are not in financial difficulties that is a good start. If they can pay a good deposit and a months rent in advance that is a good sign.

.they had a property in tbe area but sold it and are now in limbo....the evidence of that is the.kids are in the local school ..that has been verified
Kids in school in the area. If these people find themselves unable to pay the rent, and that can happen, will they willingly move out.

As a practical suggestion I think your relatives are entitled to ask for a detailed explanation of how this family sold and now have no accommodation, and to see that they can comfortably afford to pay the agreed rent.
 

tom_tom

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Run a mile.

My read through is that these potential tenants are the entitled sort who’ve run into financial difficulty and can’t accept that they can no longer afford to live there.

People who get into financial difficulty once are more likely to do so again. And then your relatives become the patsies.
They are right to be cautious..but thats not the case here..there's no suggestion or evidence of financial struggle
Well everybody else has managed to say no, alarm bells
To clarify....they asked around the neighbourhood for ..off market opportunities and I think through a neighbour of the vacant house got in touch ....as I said my advice was not to proceed..but the decision already made so they just want to ensure they follow the process
 

SPC100

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What you really want to know is that they are honest, responsible, live within the law, pay their debts, can afford to pay the rent (potentially even on reduced income) but all of that is hard to determine.

It is all too easy to fake references, and have fake referees.

You could try to organise to visit them where they are currently living, to try and get some measure of them, and see how they have handled their current property.

Biggest risk is non payment and or destroying the house and or refusing to leave.

Biggest protection against these IMO is to know that they have the money or earning capacity to pay e.g.
a) Have they have a lot of money in the bank/invested (relative to the price of the house, e.g. a couple of years of rent)
b) a lot of earning power (relative to the market rent)
c) they can afford the rent (i.e. all the earning power is not spent on lifestyle, new cars, private schools, gambling, drink, drugs etc.,)

If they have sold and are looking for another house they might have a lot of money? If there were forced to sell they might have none?

Seeing their actual mortgage approval (for the house they plan to buy, assuming they are between sales?) might at least indicate that a bank thinkgs they are good for a repyament capacity of x.

They approached your relative, and have no other options apparently, so I think your relative could easily request to see bank statements, and P60s for last few years, to help determine their financial situation. I don't think this is typically requested in Ireland today, but in my opinion it is sensible. Many tenants might feel this is too invasive, but these particular ones are trying to convince your family.

Biggest hassle would be constantly late payment or tenants constantly asking for things.
 

tom_tom

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What you really want to know is that they are honest, responsible, live within the law, pay their debts, can afford to pay the rent (potentially even on reduced income) but all of that is hard to determine.

It is all too easy to fake references, and have fake referees.

You could try to organise to visit them where they are currently living, to try and get some measure of them, and see how they have handled their current property.

Biggest risk is non payment and or destroying the house and or refusing to leave.

Biggest protection against these IMO is to know that they have the money or earning capacity to pay e.g.
a) Have they have a lot of money in the bank/invested (relative to the price of the house, e.g. a couple of years of rent)
b) a lot of earning power (relative to the market rent)
c) they can afford the rent (i.e. all the earning power is not spent on lifestyle, new cars, private schools, gambling, drink, drugs etc.,)

If they have sold and are looking for another house they might have a lot of money? If there were forced to sell they might have none?

Seeing their actual mortgage approval (for the house they plan to buy, assuming they are between sales?) might at least indicate that a bank thinkgs they are good for a repyament capacity of x.

They approached your relative, and have no other options apparently, so I think your relative could easily request to see bank statements, and P60s for last few years, to help determine their financial situation. I don't think this is typically requested in Ireland today, but in my opinion it is sensible. Many tenants might feel this is too invasive, but these particular ones are trying to convince your family.

Biggest hassle would be constantly late payment or tenants constantly asking for things.
Thanks for that .
 

Gordon Gekko

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If these people sold their house, then they have cash. The landlord could look for a bigger deposit and more rent paid upfront.
 

NoRegretsCoyote

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There is no legal maximum but the RTB recommends one month's rent payment as deposit.

If you are looking for three months deposit then you feel there is a big risk of non-payment of rent. Which should make you ask why you are accepting these tenants in the first place......
 

Buddyboy

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..as I said my advice was not to proceed..but the decision already made so they just want to ensure they follow the process

If they ignored your advice in the first place, what makes you think they will follow any advice you are going to give now?

For example, if you say they should get 3 months rent as deposit, they might just turn around and ignore that and get 1 months.

I'm saying this with the best of intentions, you appear to be spending a lot of time on their behalf, when they ignored your (sound) advice in the first instance.

And if it goes pear-shaped, will you be blamed? e.g. "you said to get 3 months rent, but now they haven't paid rent for 6 months and won't leave".

If it was me, based on what your have said (and the responses you have been given), I would tell them that they have ignored your advice and obviously think they know better, so off with them. Let them do the research on how to get good tenants.
 

PaddyBloggit

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If it was me, based on what your have said (and the responses you have been given), I would tell them that they have ignored your advice and obviously think they know better, so off with them. Let them do the research on how to get good tenants.
+ 1
 

tom_tom

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If they ignored your advice in the first place, what makes you think they will follow any advice you are going to give now?

For example, if you say they should get 3 months rent as deposit, they might just turn around and ignore that and get 1 months.

I'm saying this with the best of intentions, you appear to be spending a lot of time on their behalf, when they ignored your (sound) advice in the first instance.

And if it goes pear-shaped, will you be blamed? e.g. "you said to get 3 months rent, but now they haven't paid rent for 6 months and won't leave".

If it was me, based on what your have said (and the responses you have been given), I would tell them that they have ignored your advice and obviously think they know better, so off with them. Let them do the research on how to get good tenants.

I've got some good general advice from the thread...and that's all I'll be passing on ..here's the links heres the key variables and some things to consider ...thats it ...the decision was made before I got involved.
 
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