Returned to UK, now tenants in my apartment want rent reduction. rent not covering.

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terrontress

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I had been living in Dublin until 2008, having lived there since 2000, originally being from the UK.

A job opportunity arose and I moved back from the UK and instead of selling my apartment in Donabate, I took on tenants as nothing seemed to be selling.

As it stands at present the apartment is not worth what is owed on it. Negative equity. The payments from the tenants cover the mortgage, property management fees and insurance and nothing else.

The tenants now want a reduction in rent and, to be truthful, I think that this is fair as there are other places on DAFT at a similar level to what they want to go down to.

But this is going to leave me at €200 per month out of pocket, which I can't afford easily, if at all, as my wife is eight months pregnant. When the interest rates

If we refuse to reduce and they leave, we'll have the property unlet for a period, have to pay an estate agent to re-let it and then only receive the amount the tenant is proposing once we get someone new.

I am not sure which way to turn on this. Does anyone have any tips or advice?
 
Re: Hit from all sides

terrontress said:
If we refuse to reduce and they leave, we'll have the property unlet for a period, have to pay an estate agent to re-let it and then only receive the amount the tenant is proposing once we get someone new.
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Answer looks clear to me, I would give them the reduction, and have done so myself, a lower rent is better than no rent.
 
Re: Hit from all sides

twofor1 said:
Answer looks clear to me, I would give them the reduction, and have done so myself, a lower rent is better than no rent.
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Definitely. But am I just delaying the inevitable? Is it better to try to cut my losses and run now by going bad or else start sending over money I don't have to prop up the mortgage and then be forced to go bad on the mortgage in 18 months time after the rents go down again?

I guess I am gambling that rents or property values are going to go up by hanging on in.

I am not sure what would happen if I become a bad debt when I am out of the state. If I default on the mortgage, would I end up getting arrested when I return through an airport? I work for an Irish bank so coming back regularly is unavoidable.

I suppose I could ask the mortgage lender to switch the mortgage to interest only.
 
Re: Hit from all sides

Probaly best to talk to your bank.

Do a search, there are lots of treads on defaulting and the consequences.
 
Re: Hit from all sides

Reduce the rent ... that's your first step.

Talking about defaulting on the mortgage is a bit premature at the moment when you've got tenants.

By all means look at your options but do your best to hold onto the property as long as you can.
 
Re: Hit from all sides

Maybe try and split the difference to €100. There's a possibility that the tenants are happy with the accomodation but see rent elsewhere decreasing. It would be a pain for them to up sticks and leave too, having to change address, bank details, drivers licences etc. Try to accentuate the positives (could be a good line for a song) nearness to Luas,Dart, Bus,Shops,Schools,and the fact you're such a good landlord.
 
Re: Returned to UK, now tenants in my apartment want rent reduction. rent not coverin

Reduce the rent. A month with the place empty will probably cost you the same in lost rent, cleaning, other overheards, agent's letting fees etc.

Two months empty and you'll be calling the old tenants wondering if they want to move back at the reduced rate.

The only slight benefit a month or two of no rent would be is to reduce your tax liability.

Try if you can to reduce the property management fee's, you'll probably need to work with the other owners but it could help.
 
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