Rent Increase due - may be sizable

C

Cashmere Solo

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I have a property in an area that is not a RPZ, and the current rent is €900.
The tenants are excellent and I never have any problems with them.
The rent is due for review and the going rents for similar properties is €1400 - €1500/ month.
I was going to raise it probably by €75 to €975 which is ok after 2 years.
The problem is however that I may sell in a couple of years and if the rent is low it could affect the sale.
If the area changes and becomes a RPZ the rent is then locked for ever more.
I got stung in the past by letting out a property in another area at a reduced rent as the tenants were excellent - it then became an RPZ, and the rent got locked.
I dont fancy asking for an increase of €500/ month to bring the rent up to date - but once bitten - twice shy!!
Any suggestions/solutions - most welcome!
 
Not sure I understand the question.

You have a simple decision to make - do I put the rent up and if so by how much.

If I owned the property; the answer to the first question would be yes and the second would be to bring it to market rent over say the next two years.

You can offer a discount based on the fact that you have excellent tenants and / or one or two rent free months to soften the increase in the first year.
 
I just shake my head when I read cases like this. Because of price regulation and the uncertainty about future policy, you would be absolutely crazy not to look for market rent. Either you bear the risk of a massive capital loss in future or your tenants bear a loss now in higher rent. A perverse outcome either way.
 
Continue as you are, but submit a contract with a different amount on it to RTB. Not tax evasion, because you're not getting paid the higher sum.
 
Where is the lie? You've notionally agreed the higher rate with the tenant on paper, but you've agreed a lower rate with the tenant after loyalty discounts. No lie.
 
I think it's reasonable to increase rent to something approaching market rate and provide a discount in the rental contract for a specified service like garden maintenance. The discount should be plausibly related to the open-market cost of such a service.

Tenant then gets to minimise the pain and you get to sell at market price when the time comes.

However a typical tenant might be a bit suspicious of your motives here.
 
Simpli said:
Where is the lie? You've notionally agreed the higher rate with the tenant on paper, but you've agreed a lower rate with the tenant after loyalty discounts. No lie.
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Any change in the rent being charged to the tenant must follow the rules as laid out under rent reviews, and you are obliged to inform the RTB of the rent being charged.
 
DannyBoyD said:
r one or two rent free months to soften the increase in the first year.
Click to expand...

I like this suggestion.
Charge the full market rent.
And that is the only thing reported to the RTB and in the lease.

Tell them that if they pay on time, you will give them a month off every so often and as a sign of your good faith, give them the first month off.

Brendan
 
What happens if the Revenue check your rental accounts against the rental amounts registered with the RTB ?

Just wondering...
 
Business arrangements that require such Jesuitical thinking are a recipe for disaster for all involved.

Landlords should charge the market rate and in return should offer a reliable, high-quality service. Renters should pay on time, in full, follow the rules of the lease, and should feel secure in their home.

Whether you are an accidental landlord or a deliberate one, you are running a business, you have capital tied up, and you are currently forgoing income to subsidise someone else. The €6k or €7k per year that you are gifting your tenants could be used to improve the property for your benefit (and theirs). Or you could invest it and retire a bit earlier.

I rented for over 15 years, in Ireland and abroad, and I much preferred dealing with landlords who were professional and did what was required with no charity or favours. It's not your job to provide social welfare to people and in a downturn you won't get the equivalent support.

It's not greedy or wrong to charge the market rate - in fact it's the only way the system will function. There are loads of examples of people on this forum who were caught out by RPZ changes. Leo and Mary Lou are apparently going to sort out all the macro level stuff, you should protect your future self and your assets.
 
jpd said:
What happens if the Revenue check your rental accounts against the rental amounts registered with the RTB ?

Just wondering...
Click to expand...
I've given a month free in the past in return for garden clearance or a deep clean where I didnt have the time to do it.

Never had an issue.
 
Unfortunately for me I rented to extended family member on compassionate grounds at 60% of market rate. I didn't realise that the overwhelming buyers market for my 1 bed apartment would be investors looking to buy to rent and now I'm struggling to sell at market rate and likely to lose family home I've put a reservation deposit down on. My mortgage loan offer is subject to sale.

Wish I'd read this website beforehand but didn't think doing something which I thought was an act of generosity at the time would be so ruthlessly penalised with no recourse or exemption considered. I doubt this was the spirit of the rules when they came in but RTB are a bizarre organisation in my dealings with them, impossible to get any answers or even communication from them.

The advice of making sure it's market rate and registered like that and returning a gift in cash or some other way to off set is definitely what I would have done if I had my time again.

No good deed goes unpunished, so thread carefully.
 
When all this RPZ nonsense came in, I just agreed with my tenant that I was increasing the rent to the maximum but if they chose to renege on paying the difference, I’d be fine with that, other the odd email I’d send looking for payment, which they could ignore.

So the PRTB were advised of the higher amount, but I’d sufficient backup for my ‘rental dispute’ with my tenant for tax purposes.
 
With the fake dispute you run the risk in a real dispute the tenant ignoring it, then claiming they were told to. Perhaps moot considering the timelines disputes usually take.

Otherwise sticking to the rules and maximizing the rent is the only think that makes sense with the current rules.
 
AlbacoreA said:
With the fake dispute you run the risk in a real dispute the tenant ignoring it, then claiming they were told to. Perhaps moot considering the timelines disputes usually take.

Otherwise sticking to the rules and maximizing the rent is the only think that makes sense with the current rules.
Click to expand...
Not with a long term tenant I’ve known for ages who’s a decent person.
 
Cashmere Solo said:
I have a property in an area that is not a RPZ, and the current rent is €900.
The tenants are excellent and I never have any problems with them.
The rent is due for review and the going rents for similar properties is €1400 - €1500/ month.
I was going to raise it probably by €75 to €975 which is ok after 2 years.
The problem is however that I may sell in a couple of years and if the rent is low it could affect the sale.
If the area changes and becomes a RPZ the rent is then locked for ever more.
I got stung in the past by letting out a property in another area at a reduced rent as the tenants were excellent - it then became an RPZ, and the rent got locked.
I dont fancy asking for an increase of €500/ month to bring the rent up to date - but once bitten - twice shy!!
Any suggestions/solutions - most welcome!
Click to expand...
You could put it up by an amount that the tenants are likely to afford, otherwise, you risk them going to RTB regardless, which you'll probably win, but it will still cost you time and effort if not also money.

Technically you can increase to "market rent" but you have to show evidence what market rent in the area is via 3 similar properties with the established rent. It can't just be hearsay from someone getting more.

https://www.rtb.ie/during-a-tenancy/rent-reviews-outside-a-rent-pressure-zone
 
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