Increasing rent for RAS Rental

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lotus17

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I have a 3 bed rental property in a regional town rented to a family for the last 7 years. The house is in excellent condition. They are in RAS for the last few years. I received €750 per month for the last two years from the Council. I understand I am now entitled to increase the rent as 2 years has passed since the last rent increase. I emailed the council saying I was increasing the rent to €1350 based on the local market and citing 3 local examples of similar properties on Daft. The Council wrote back to me stating €1000 per month would be a fair rate in respect of the property. They also stated they are obliged to seek a discount of approx 8% on the normal market rent.
They have asked me to either A) accept the rent increase to €1000 or B) refer the case to the RTB for adjudication. The rent will stay at €750 until adjudication has been made.

I would like to maximize the return on my investment. Could I suggest to the council we meet half way and split the difference of €350 euro between us and set the rent at €1175 before getting the RTB involved? Does anyone here have experience of negotiating with the Council and whether they have further leverage once the offer a rental rate? Does anyone have experience of referring to the RTB? What is the likely outcome?

Thoughts and advice appreciated.
 
You're looking for an 80% rent increase? Seriously? Have your costs risen that significantly in the 2 years since the last increase?

Have you thought about what the likelihood of vacant periods are when the current family move out? How much would that cost you? They must be decent tenants if you've been happy for them to stay for 7 years.

I would suggest the Council have already met you half way by agreeing to €1,000.
 
dereko1969 said:
You're looking for an 80% rent increase? Seriously? Have your costs risen that significantly in the 2 years since the last increase?
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Unfortunately the housing crisis is not going to be solved one post at a time on AAM, it's not the OP's fault that rental rates are where they are and trying to guilt-trip them into charging what you think is a fair rate is not helpful. Like it or not, they are running a business and businesses operate by charging what the market can sustain, not a cost-plus model.

And I should add that I have a huge amount of sympathy for people renting at the moment, the market is broken and needs to be corrected, but individual owners will not be able to fix it and furthermore it should not be their responsibility to do so.
 
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Zenith63 said:
Unfortunately the housing crisis is not going to be solved one post at a time on AAM, it's not the OP's fault that rental rates are where they are and trying to guilt-trip them into charging what you think is a fair rate is not helpful. Like it or not, they are running a business and businesses operate by charging what the market can sustain, not a cost-plus model.
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Besides, if the RPZ legislation is extended to the location of this property, the OP will be constrained from further rent increases over 4% pa thus leading to a perhaps permanent diminution in the value of their property.
 
Zenith63 said:
Unfortunately the housing crisis is not going to be solved one post at a time on AAM, it's not the OP's fault that rental rates are where they are and trying to guilt-trip them into charging what you think is a fair rate is not helpful. Like it or not, they are running a business and businesses operate by charging what the market can sustain, not a cost-plus model.

And I should add that I have a huge amount of sympathy for people renting at the moment, the market is broken and needs to be corrected, but individual owners will not be able to fix it and furthermore it should not be their responsibility to do so.
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T McGibney said:
Besides, if the RPZ legislation is extended to the location of this property, the OP will be constrained from further rent increases over 4% pa thus leading to a perhaps permanent diminution in the value of their property.
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The one sure way to bring about a nationwide RPZ is for people like the OP to do exactly what they're intending.

The fact is, the "market" isn't what the OP is looking to rent their house on, they're looking it seems to me from their post, to keep the RAS tenants, tenants who incidentally have been there for 7 years and presumably are decent tenants.

I have no problem with a 33% rental increase (as the council have agreed to) as it would seem they have been below market level but 80% is just wrack-renting to my mind.
 
dereko1969 said:
The one sure way to bring about a nationwide RPZ is for people like the OP to do exactly what they're intending.
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Well that's me told :rolleyes:

Are you suggesting I shouldn't warn the OP of the risk of a permanent diminution in the value of their property if they don't take appropriate action to prevent it?
 
dereko1969 said:
You're looking for an 80% rent increase? Seriously? Have your costs risen that significantly in the 2 years since the last increase?

Have you thought about what the likelihood of vacant periods are when the current family move out? How much would that cost you? They must be decent tenants if you've been happy for them to stay for 7 years.

I would suggest the Council have already met you half way by agreeing to €1,000.
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Don't forget to post this when landlords are forced to reduce rents in the next downturn. And that's despite having contracts.

What English term would you apply to a landlord forced to cut his rent massively, similar to your rack rent comment.
 
No, certainly not, I wasn't having a go at you but it is an unintended consequence of this type of rental increase that further demands to extend the RPZ will be made. It is an important issue.
Do you think an 80% increase is warranted where the OP cannot evict the tenants?
 
dereko1969 said:
No, certainly not, I wasn't having a go at you but it is an unintended consequence of this type of rental increase that further demands to extend the RPZ will be made. It is an important issue.
Do you think an 80% increase is warranted where the OP cannot evict the tenants?
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What you don't seem to understand is that if we in the Rental zones don't keep increasing our rents our properties are devaluing. Directly caused by the government. And they did zero in the budget to increase properties available to tenants.

I think the percentage is not the issue, the issue is what the market dictates. OP can rent for that and that's what business is about. But under RAS you're supposed to charge a certain percentgage less than market for security of the RAS scheme.
 
lotus17 said:
I emailed the council saying I was increasing the rent to €1350 based on the local market and citing 3 local examples of similar properties on Daft. The Council wrote back to me stating €1000 per month would be a fair rate in respect of the property. They also stated they are obliged to seek a discount of approx 8% on the normal market rent.
They have asked me to either A) accept the rent increase to €1000 or B) refer the case to the RTB for adjudication. The rent will stay at €750 until adjudication has been made.
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Market rent 1350
8% discount 108
Ras rent = 1242

The councils are desperate, no way will they let you go. So I think your 1175 is fair based on the figures. And wow, that's an amazing increase but I do see it all over the place. The highest I've ever seen rents.
 
dereko1969 said:
No, certainly not, I wasn't having a go at you but it is an unintended consequence of this type of rental increase that further demands to extend the RPZ will be made. It is an important issue.
Do you think an 80% increase is warranted where the OP cannot evict the tenants?
Click to expand...

It's not up to me to comment on whether a particular increase or decrease is warranted by decency or fairness.

Sadly the RPZ legislation and the possibility of its extension elsewhere warrants landlords everywhere to squeeze every last penny out of the rents achievable on their properties, as for each of them holding back and giving even a luck penny to their tenants in terms of foregoing potential increases, means a likely permanent diminution in the value of their property.
 
To deal with the OPs request for thoughts and advice on his particular situation.

In my experience dealing with the Council, they have a maximum above which they will not go. However their first offer is not necessarily at that max.

If you think that €1,350 is a fair reflection of the market rate I would agree with Bronte, get back to them with a figure just below, that supported by the evidence that you will bring to the RTB.
 
Creme egg, the councils used to have limits, now they have leeway. Discretion. OP tells the council the law is he's allowed to increase the rent by proving market rates, he's done this so there is zero reason to go to the RTB, council are stupid too, OP would win the RTB case and all the councils with HAB rents would sky rocket once the decision is published, and I bet it would make the newspapers.
 
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