Rent increase in RPZ ?

Crotach

New Member
Messages
3
We're renting out a house that happens to be in the rent pressure zone and I'm wondering about the 4% restriction on rent increase.

We've only increased the rent once since we started renting out the house and it's fallen way below the market value.

I am not looking to fleece the tenants, but a 10% increase in rent would still leave it 31% below the market value, which I would consider fair to the tenants, but I'm not sure if I understand the RPZ rules correctly.

Am I only allowed to increase the rent by 4% every 12 months, even if the current rent is 62% of the market value?
 

Zenith63

Frequent Poster
Messages
224
I’ve been a bit confused about this as well to be honest. The discussion on AAM tends to be that you can only add 4% at a time, but if you use the RPZ calculator (https://onestopshop.rtb.ie/calculator/rpz) and have not increased the rent for say two years then it says you can add 8%.

Have you tried the calculator with your info?
 

Thirsty

Frequent Poster
Messages
1,974
The rate is 4% per year; if rent hasn't changed for two years, its still 4% per year - but it applies for each of those years.

Easiest thing to do is use the calculator and go by that.

Also review your rent every year.
 

Zenith63

Frequent Poster
Messages
224
Great. So it’s possible the OP can increase the rent by close to 20% this year to make up for the lost years since the RPZ came in, then 4% next year etc etc.

Doesn’t solve the 60% issue entirely, but still better than only being able to do 4% this year.
 

Sarenco

Frequent Poster
Messages
5,432
Great. So it’s possible the OP can increase the rent by close to 20% this year to make up for the lost years since the RPZ came in, then 4% next year etc etc
When was the rent last determined?

The formula is a bit more complicated than 4%pa compounded - always best to plug the relevant details into the RPZ calculator.
 

Crotach

New Member
Messages
3
Well the calculator gave me 4%, so I'm a bit confused.

The rent was set in 2011 and raised once in February 2016. According to that I should be able to increase the rent by 12% (3 times 4%) ?

I would like to increase the rent by 10%, which I feel would be fair to the tenants and still keep it highly attractive as it's well below market value.
 

Zenith63

Frequent Poster
Messages
224
Well the calculator gave me 4%, so I'm a bit confused.

The rent was set in 2011 and raised once in February 2016. According to that I should be able to increase the rent by 12% (3 times 4%) ?

I would like to increase the rent by 10%, which I feel would be fair to the tenants and still keep it highly attractive as it's well below market value.
Summary of results:
Tenancy Type: Existing
Date tenancy commenced: 01/01/2011
Date previous rent set: 01/02/2016
Date new rent to take effect: 01/06/2019
Previous rent amount: €2000
Maximum rent permitted: €2133.33 (6.6% increase)
Calculation: €2000 x ( 1 + 0.04 * 40/24) = €2133.33

Are you not getting something like that?
 

Crotach

New Member
Messages
3
Hm, kinda :) I didn't notice at first, but indeed it's something like 6-7% instead of 4%:

Tenancy Type: Existing
Date tenancy commenced: 01/01/2011
Date previous rent set: 01/02/2016
Date new rent to take effect: 01/09/2019
Previous rent amount: €1000
Maximum rent permitted: €1071.67

Anyway, I think I have my answer here and no wiggle room. I guess the tenants will be happy with 1070 euro rent for the next 12 months. :)
 

eisfspike

Registered User
Messages
15
Hi There,

I have a tenant who is currenlty paying 550 euros a month which is well behind the market rent of 1000 euros for similiar properties in the area. The property is currently outside a rent pressure zone but its looking likely that it will become a RPZ. I have a good tenant there and would like to keep her rent as is but my fear is if the area becomes a RPZ I will never be able to get back to market rent levels. Is this really the case even if I got a new tenant I would not be able to get back to market rent levels because of the RPZ?
 

Sarenco

Frequent Poster
Messages
5,432
Is this really the case even if I got a new tenant I would not be able to get back to market rent levels because of the RPZ?
I'm afraid so.

Landlords that held rent at below market levels for favoured tenants got completely screwed on the introduction of the RPZ regime.
 

llgon

Frequent Poster
Messages
376
The property is currently outside a rent pressure zone but its looking likely that it will become a RPZ.
Just curious as to why you think it looks likely to become a RPZ. The system was revised and a lot of new areas were recently added. If the area wasn't added then what's changed since? I'm in a similar situation to yourself.
 

eisfspike

Registered User
Messages
15
If you look at the RTB Rent index for q1 2019 it gives a detailed breakdown of areas and the average rent etc. You can gauge based on the below and using the rent index if it is looking likely if your area will become a RPZ. This is my view and would welcome any corrections to this logic.

A rent pressure zone is an area where annual rent increases have been at 7% or more in four of the last six quarters and where the rent levels are already above the national average and in these areas, rent increases will be capped at 4% per annum over a three- year period.
 
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