Query regarding new rent rules

G

Gordon Gekko

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Morning All,

When the new rent rules were announced, I increased the rent that I charge a tenant (legitimately). As previously stated, I did not want to do this, but the new rules effectively compelled landlords to do this.

Now the tenant is moving out (which is a shame). My query is whether I can increase the rent for the new tenancy by 4%?

My tenants had been there for more than two years, no rent increases, etc.

€1,200 to €1,500 to €1,560.

Thanks.
 
What's interesting about the question is who is going to monitor this. If you increased the rent only recently I presume you never changed it with the RTB. How could this ever come back on you.

Would your tenant stay if the rent was reduced back to the old amount? It is indeed a shame to lose a good tenant. Good tenant's are worth their weight in gold. And should be treated accordingly. I had the same scenario recently with a tenant of 5 or 6 years. But I asked him first how much he was prepared to pay me extra, turned out he was a landlord himself ! and we came to a mutually agreeable figure. If push came to shove I wouldn't have increased it at all. I much prefer peace of mind than anything else. Getting 150 extra now on a rent of 700. So 850. Probably market rent is 1K. But don't really care.

And I'm not agreeing with you that you were forced into increasing the rent by the new rules. And using the word 'effectively compelled' is way wide of the mark.

How much would the market rent be?
 
So why do you want to put it to €1,560 ?

My experience if that if you keep your rent just below market rent that tenants are less likely to move.
 
"Effectively compelled" is a perfect description for what has happened.

Not increasing the rent would have cost me circa €60,000 as an example.

A property yielding €1,500 a month is clearly worth significantly more than one that's locked into €1,200 a month.

€300 x 12 grossed up at (say) 6%
 
Where are you getting 60K from?

An extra 300 monthly is anually 3600? It would take 16 years to get to 60K.

Anyway it will be interesting now to see how long you will be empty, how much you'll actually get and if the next tenant is as easy as your current good and stable one.

It's swings and roundabouts in the property game and the government putting in mad rules will all ease off once the housing crisis is over and of course that means rents will drop down again.
 
Assume a 6% yield.

Something that pays you €1,500 a month would be worth €300,000.

Something that pays you €1,200 a month would be worth €240,000.

This is the point that many people are missing regarding these new rules. If I didn't increase the rent from €1,200 to €1,500, I could never do it.

The value of my asset would have been devastated.
 
Will the recent rent increase actually have taken effect before the current tenancy terminates? In other words, will the requisite 90 day notice period have expired?
 
Yep...just about...the notice was issued early enough in December (well before the legislation was even passed) and they have to give a minimum of 56 days notice. They're staying a little longer than that, so it all stacks up.
 
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I think (although I'm not 100% sure) that you can charge €1,500 (not €1,560) on a new tenancy in those circumstances.

As an aside, I strongly suspect that this aspect of the new rent review rules will be widely ignored on the basis that (a) they will be extremely difficult to police; and (b) they are probably unconstitutional.
 
Thanks Sarenco.

The sad aspect of this flawed legislation is that a precedent has been set; a precedent has made landlords like me move from benevolence to applying every increase allowable. Doing otherwise would be reckless in the context of protecting the value of one's assets.
 
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