Rent increase but landlord does not collect the additional money

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Learner2015

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So I have a tenant coming up on their 2 year anniversary. By rights I will be able to increase the rent by 4%.

However I don't want to. They are a young family, excellent tenants but I know money is very tight.

But I also don't want to have a situation in a few years where because I have not increased the rent a potential purchaser might be stuck with my below market rent. (it will still be below market value even with a 4% increase on it now btw).

So my questions are:

1) If I don't increase the rent for many years can I then increase it in one go taking into account all the years it didn't change i.e go up more than 4% in say 5 years time?
2) Could I increase the rent now but not collect it. So tell the RTB it has increased 4%, tenant still pays me the regular amount.
3) Re question 2 what are the tax implications - would I have to declare to Revenue the increase amount even though I won't be receiving it and if I have to do that can I write off the bad debt part against income?

I know some people might think I'm mad not to want to get the extra money but things are going OK for me right now so I can comfortably survive without the extra money.

Appreciate any advice.
 
Why tie yourself in knots.

Increase by 4% per PRTB rules.

On €1k that's €40
 
moneymakeover said:
You can increase it by 8% in a years time
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That is not correct (assuming the property is in an area that continues to be designated as an RPZ in 12 months' time).

The OP would be ill-advised not to increase the rent as per the RPZ formula as soon as he is entitled to do so - otherwise he would be needlessly de-valuing his property.
https://onestopshop.rtb.ie/calculator/rpz

It's a shame that the RPZ regime effectively forces landlords to raise their rents regardless of their relationship with their tenants - but there it is.
 
Why is that not correct

if t = 24 then it would appear to be 1.08 times the old rent = 8%

[broken link removed]

Example 4: Tenancy commenced 29 December 2016;
landlord is entitled to serve a rent review notice on 29 December 2017 providing a minimum of 90 days notice.
The new rent will come into effect on 5 April 2018.
In order to ascertain the new rent amount as permitted under the regulations the landlord inserts all the relevant information in to the formula.
R = €1300, the current rent amount t = 15 months (29/12/16 to 5/04/2018) m = 12 months – as this tenancy commenced after 24/12/2016 this landlord is entitled to review the rent annually.
Therefore:  1300 x (1 + 0.04 x 15/12)  15/12 = 1.25 then  x 0.04 = 0.05 then  + 1 = 1.05 then  x 1300 = 1365
1300 x (1 + 0.04 x 15/12) = €1365 is the new rent amount permitted *please note that you should do your calculations working from right to left
 
I’m speaking as someone who was a decent skin and kept rent low because I’d a degree of sympathy for my tenants and didn’t particularly need the extra €48 that a €100 rent increase would give me;

There’s a word to describe landlords who don’t charge market rates given the anti-landlord environment we live in: idiots.

The value of your asset is generally a function of its ability to generate income; take two identical properties beside each other: one is owned by a nice guy who has sympathy for his tenants and charges below market rent. The other is owned by a ruthless b..tard; he simply charges market rates. Mr Ruthless’ property is now worth substantially more than Mr Nice’s.
 
Sarenco said:
Except that the RPZ regime prevents landlords charging market rents in many instances.
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I’m aware of that!

I’m referring to circumstances where a landlord has flexibility (e.g. not quite in an RPZ, can increase the rent by 8%, etc).
 
Maybe you could say, change the waste disposal charge to your name and pay that for the year or something like that

That way the rent would still be increased by 4% but you would be giving the money back in another way
 
Interesting thread.

I’m in a similar situation. Tenants have been in the apartment for four years. Lease is due for renewal September 1.

Rent is €1200 p/m. Apartment is fabulous - own front door; only 4 apartments in the development. Each time we’ve let it pretty much day after advertising it.

Just did a quick search on My Home - only 4 one bed apartments to let in Dublin 6, where this apartment is. Cheapest is €1404 p/m and that’s it D6 West, which is NOT the same. Mine is Terenure/Rathgar.

Fell asleep at the wheel on the rent rise restrictions; so, it’s way below market value.

That said, they’re great tenants. But, an extra €48 for the next two years (4% of €1200) is peanuts. I’d settle for €1300.

What are my options? Not renew lease and put it back on the market? Ask for €1300 and see what happens?

If I understand the legislation correctly, then 4% every two years isn’t even keeping up with inflation.

Thoughts?

Thanks.

D.
 
That said, they’re great tenants. But, an extra €48 for the next two years (4% of €1200) is peanuts. I’d settle for €1300.

What are my options? Not renew lease and put it back on the market? Ask for €1300 and see what happens?
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You need to make yourself more familiar with the legislation before you get yourself into trouble.

For your existing tenants or new tenants the most you can increase every two years is by 4%.
 
Thirsty said:
You need to make yourself more familiar with the legislation before you get yourself into trouble.

For your existing tenants or new tenants the most you can increase every two years is by 4%.
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Thanks.

4% every two years is about 1.98% per annum compounded - a little above the rate of inflation.

In situations like mine, that generates a huge incentive not to renew the lease and re-let the property at whatever I could get for it - I reckon about €1500 p/m.

This restriction, combined with the advent of AirBnB, is wrecking the market.

Is it any wonder there are only four(!) Dublin 6 one-bed apartments to let on My Home, and there are so many people living in hotels at the State's expense?

D.
 
I thought first rent review after 24 months( can be calculated if it is more than 24 months) at 4% then after every 12 months at 4%.
 
Thirsty said:
You need to make yourself more familiar with the legislation before you get yourself into trouble.

For your existing tenants or new tenants the most you can increase every two years is by 4%.
Click to expand...
That's not correct.

If a tenancy in an RPZ began on or after the 24 December 2016, a landlord can review the rent each year (every 12 months) and the landlord can apply the RPZ formula (annualised 4% cap) to determine the maximum rent increase.

If a tenancy in an RPZ began before 24 December 2016, a landlord cannot review the rent until 24 months have expired but thereafter can review the rent on an annual basis (subject always to applying the RPZ formula to determine the maximum rent increase).

The legislation currently provides that a RPZ designation will automatically expire after three years (i.e. by 24 December 2019 in most RPZs).
 
Hhhhmmmm..........

Well, here's my case.

They have been there for 4 years. The rent has been €1200 for the last two years (though a 12 month lease was signed in both 2016 and 2017)

So, the lease is due for renewal (year 5) on October 1 (not September 1 as I mistakenly wrote above).

1. Is it the case that I can only increase the rent by 4%. i.e. €48?

If so........

2. Would that €1248 (1200 + 48) be set until October 2019 or until 2020?

Many thanks.

Best wishes,

Denis
 
In that case you can review the rent again on 1 October 2018.

Assuming the new rent is to take effect on 1 January 2019 (you have to give a minimum of 90 days' notice before any rent increase takes effect), the maximum new rent would be €1,252 per month.

Going forward from there, you can then review the rent on an annual basis (1 October 2019, 1 October 2020, etc.), subject to the RPZ cap where applicable.
 
Sarenco said:
In that case you can review the rent again on 1 October 2018.

Assuming the new rent is to take effect on 1 January 2019 (you have to give a minimum of 90 days' notice before any rent increase takes effect), the maximum new rent would be €1,252 per month.

Going forward from there, you can then review the rent on an annual basis (1 October 2019, 1 October 2020, etc.), subject to the RPZ cap where applicable.
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Thanks for the reply.

In that case, given the state of the market, I think that a rise to €1250 is reasonable.

D.
 
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