House Letting For Dummies!

M

Ms2011

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Sorry to start another 'renting expenses' thread but I'm finding it hard to do the sums up for my situation and I'd appreciate any help

So I might soon be dragged kicking and screaming into the realms of Landlordhood. I'm not looking to make any money just help pay some of my mortgage. I will own one house outright which I will live in and rent the one with the mortgage. I will be using a letting agency to let out the property.

ANNUALLY
Mortgage: €19812
Rental Income: €10800
Letting Agency: €960
NPPR: €200
Landlord's Insurance: €710

What taxes and other expenses might I expect to incur on these figures??
 
I think your letting agency fee is too low. Their fees are twofold. Firstly, there is their finders fee to market the property, find tenants, vet them, do background and credit checks of them, show the property to prospective tenants, do up the lease paperwork, arrange an inventory of furniture and fittings, etc etc. A couple of years ago I was looking into renting out a property. I was quoted $600 as that fee. You may be able to shop around for a lower rate now, or they may have gone up.

Once your tenant has moved in, the agency take a slice of the monthly rent to collect the monthly rent, forward it to you, deal with any issues or queries that the tenant may have & generally manage the property for you. I was quoted 8%, 10% or 15% depending on my level of involvement in maintaining the property once it was rented out. If I were to take care of all maintenance issues, I'd be charged 8%. if I wanted them to do it all, I'd be charged the higher rates. 8% is 865 euros p/a, 10% is 1,080 euros p/a & 15% is 1,620 euros p/a. Add any of those amounts to your finders fee, and you are knocking on the door of 1,500 to 2,400 euros p/a as letting agency fees.
 
You can't set the entire mortgage expense off if it includes principle repayments - you can only set off 75% of the interest applied in the applicable year.
 

My letting agency fee is based on what my friend in the same area is paying, which is €80 a month which they take straight away and wire the rest to her account on the 1st of every month.
 
Tailspin said:
You can't set the entire mortgage expense off if it includes principle repayments - you can only set off 75% of the interest applied in the applicable year.
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Sorry I don't understand what this means, as the title suggests I'm not familiar with this area at all, when I bought my house it was to live in forever so I never thought I'd be going down this road, however like a lot of people my circumstances have changed alot recently leaving me little choice and I have to roll with the punches
 
Your Mortgage is €19000 per annum - this is probably a mix of capital & interest.

If €10000 is interest, you will only be allowed to offset €7500 against the rental income. You must be registered with PRTB (€70) in order to avail of this.

You need to bear in mind the property may not be rented all year round, you may get tenant who do not pay rent or damage the property. You will nearly alway have miscellaneous expenses (broken washing machine, a leak, etc).

Being a landlord is not always easy - if you get a good tenant, it's grand, but when you get a bad one, it is a nightmare !!

While there are some tenants who will look after the house as if it were their own, many will not, it will deteriorate over the year & require on going maintenance, painting, new furniture, etc.

Also make sure your martgage will not be affected by changing it's status and if you have mortgage relief, it may be affected (I know nothing about this side)

Good luck
 
At this rate it will be cheaper to leave the property empty, keep my mortgage relief, no extra taxes, maintenace expenses or troublesome tenants
 
OP -To some extent you are right. Letting one's home is much more hassle than people realise and not the money earner that non-landlords imagine.

Why not rent a room or a couple of rooms? The rent you charge up to 10.000 euros is tax free and there's almost no hassle at all.
You don't say what type of property you have or where it is, but there are always people looking for a room or two. If you're in a large town you can charge quite a bit for short term visitors.

Even earning 5.ooo from renting rooms can be more profitable than charging ten grand on renting the whole house because of the no-tax situation.

Please google "rent-a-room". It can be the easiest and most profitable way of letting a property in Ireland
 
Hi Ms,

Ive changed your title from house renting for Dummies to house letting for Dummies for clarity.

aj
 
Ms2011 said:
My letting agency fee is based on what my friend in the same area is paying, which is €80 a month which they take straight away and wire the rest to her account on the 1st of every month.
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Fair enough so, that sounds like a % of the rent once the property is actually rented out. But who is going to get out there and actually find the tenants for you? Who is going to market the property, take professional pictures of it, and put the listings up on dafe.ie & myhome.ie? Then there are the back ground checks of prospective tenants, showing the property to them, arranging the lease paperwork and inventory of contents etc etc? Are you sure your friend didn't have to pay an additional up front fee for that, in addition to them taking their 80 quid a month?
 

They charge a once off fee of €560 for all the work which you don't pay up front, when they collect the deposit and months rent up front from the tenant they deduct their bill then write you a cheque for the balance.
 
Ms2011 said:
At this rate it will be cheaper to leave the property empty, keep my mortgage relief, no extra taxes, maintenace expenses or troublesome tenants
Click to expand...

That is most unlikely. Renting out a house will bring in €7,000 to €10,000 per annum depending on location. Of course that is taxable, but what income isnt.

I budget €500 per annum upkeep, some years it is considerably more some years nil.

Your insurance budget seems on the high side.

I dont pay an agent to find tenants I advertise myself. All the other things mentioned, background checks, inventories etc are baloney dreamed up by letting agents to spread fear uncertainty and doubt among inexperienced landlords, and so justify their existence.
 

Thanks for that, I may still go down the renting route yet, I haven't made up my mind. My friend should have been renting her house for a few months by the time I have to decide, I will see how she is finding it as she would be in a similar situation as me.
 
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