tenant asking for a reduction of €200 rent

B

blueskies

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hi there

tenant has asked for a reduction in 200 rent as he has lost his job His wife is still working. This would mean rent now below mortgage. Also this is mid lease? any thoughts. . Not fully convinced he has lost it either , could be just a ploy to get rent reduced. its a one bed apartment city centre.
Could he leave mid lease?
 
I've had the same problem. Both mid-lease. One reduced by E200 since Jan and the other reduced by E500 since Jan. I'm very suspicious about one of them saying they lost their job. But what do you do? They can leave by giving a months notice. I know rents have dropped in the area too so they'd have no bother getting somewhere else. I wasn't willing to take the chance anyway.
 
thanks paul
this tenant is looking for reduction below the current market rent in the area. Might bring it down a hundred to match current prices in area.
Still confident that I can rent this place if he goes. Rented it 5 months ago within 2 days so hopefully still very rentable
 
I think you should meet him some of the way. Explain that 200 is bringing it below mortgage cost etc. He is probably chancing his arm that you will say ok. At least if you bring it down 100 or 120 say you are being resonable and they will hardly go to the hassle of moving for a difference of a few quid. Good Luck.
 
He's asking for 200 cos he really wants 100. Offer him 50 quid.

Paul, you must have been way over the market rate to have dropped a place by 500 quid a month? Must be a non-standard letting?

Landlords need to be careful about tenants jumping on the "falling rents" bandwagon. I have reduced mine by 50 quid and I've stated that this is now fixed for 12 months. You can reduce it so much but tenants have to shoulder the burden of this recession too. If your rent is at the market rate for the area, then unless they are in dire straits they'll stay put. Moving is a hassle in itself.
 
"Paul, you must have been way over the market rate to have dropped a place by 500 quid a month? Must be a non-standard letting?"

It's a 3 bed in Ranelagh. The agent quoted the rent on Daft and it was let the next day. I'm just hoping they're not chancing their arm. Market rate appears, at the moment, to have come down to slightly higher than they're looking for me to drop to.

I'm just wary of "a bird in the hand...etc"
 
envelope said:
I think you should meet him some of the way. Explain that 200 is bringing it below mortgage cost etc. He is probably chancing his arm that you will say ok. At least if you bring it down 100 or 120 say you are being resonable and they will hardly go to the hassle of moving for a difference of a few quid. Good Luck.
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I would meet him somewhere in the middle, but don't mention your mortgage thats of no consequence to him and has nothing to do with the fair market rent.
 
I really depends on how strong the market is in the area. If you can rerent, id hold firm. If not give him a good reduction some sort of compromise.

The problem here is if you lower the rent it adds to the domino effect thats happening all over and will add to the rents falling in your area.
 
paulpd said:
It's a 3 bed in Ranelagh. The agent quoted the rent on Daft and it was let the next day. I'm just hoping they're not chancing their arm. Market rate appears, at the moment, to have come down to slightly higher than they're looking for me to drop to.
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By market rate do you mean asking prices on Daft? I'm not sure this is the real level of the market. Most people negotiating a rental at the moment will haggle for below the asking rent, often successfully. So it's quite possible that your tenants have actually judged the market correctly. I live in the area and from what I've seen rents in D6 and D4 are down 15-20% on last year, especially for family sized properties. You'll now find yourself competing with potential sellers who have decided to rent instead of sell in the current climate.

I know it's a difficult time to be a landlord. But I can't really see how the employment status of your tenants is relevant, unless they fail to pay the rent. If they think they can get better value elsewhere, they're entitled to shop around no matter what their financial situation.
 
I would offer him say €500 back in January if hes still there and not in arrears, but keep the rent the same.

If you do give a reduction get a new lease signed for a year.
 
noel_c said:
I know it's a difficult time to be a landlord. But I can't really see how the employment status of your tenants is relevant, unless they fail to pay the rent. If they think they can get better value elsewhere, they're entitled to shop around no matter what their financial situation.
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Exactly!.

Agree with what you say about Daft not showing the true picture of the market - it's the same with selling your house. Just because it's advertised at a certain price doesn't mean it will actually sell for that!
 
murphaph said:
You can reduce it so much but tenants have to shoulder the burden of this recession too.
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Fair point here but a lot of people would say a lot of the problem in this country is landlords having multiple properties (re: the bubble I mean), though not saying you are necessarily one of them. Sorry slightly off point but just commenting...
 
minion said:
I would offer him say €500 back in January if hes still there and not in arrears, but keep the rent the same.

If you do give a reduction get a new lease signed for a year.
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PS They were actually advising tenants on tv yesterday evening not to sign leases at the moment at all on Nationwide on RTE did anyone see that?
 
queenlex said:
PS They were actually advising tenants on tv yesterday evening not to sign leases at the moment at all on Nationwide on RTE did anyone see that?
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Well if those are the landlords terms for a rent reduction, then if they dont sign leases they either have to move or pay the current price til the landlord decides to reduce it.

Advising on tv is easy. In practice there is reality.
 
queenlex said:
Fair point here but a lot of people would say a lot of the problem in this country is landlords having multiple properties (re: the bubble I mean), though not saying you are necessarily one of them. Sorry slightly off point but just commenting...
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Yeah I know a lot of people say that but here in Germany there many orders of magnitude more landlords, even per capita. Most property purchased here is done so by landlords who then rent out the property and it doesn't cause bubbles. The government here also doesn't depend on property transaction taxation for a large portion of its revenue as so few transactions actually take place. They have a sort of council tax instead but this is relatively low compared to say, the UK.

It's actually when you have a culture of home ownership that bubbles are born (UK/USA/Ireland etc. mostly english speaking cultures but also Japan). Couple a strong desire for home ownership to easy credit and a load of foreign nationals looking for rental accomodation that doesn't exist and a bubble is inevitible. If private rental property hadn't been brought onto the market there would have been nowhere for migrants to live. No migrants and our economy would have ground to a halt even sooner than it did.

There are multiple factors at play in such things. Landlords will now shoulder a heavy burden and that's the risk we take. Can't complain one bit but we can complain about the PRTB which takes our money quickly but which does nothing else quickly (apart from tell revenue you haven't registered). It's a joke. Landlord's take on business risk but are then handcuffed by a paralysed system that we pay for.
 
If tenants keep forcing rents down when they can in fact pay the going rate then lots of landlords who are leveraged (not me thank god) will be forced to evict their tenants and sell up. There will be a reduction in rental property and basic economics tells us rents will increase as supply falls. It's just a question of who will be the last (wo)men standing when rents stabilise and head north again. Tenants should bear that in mind. That's why I like that Ryanair doesn't own Aer Lingus....cometition is good for the consumer, to a point!
 
The last comment doesn't seem to make sense to me. If landlords are forced to sell up, who is going to buy? Most likely another landlord who can afford to rent the place for less, because their capital outlay is less. End result: no immediate let-up in the downward pressure on rents.
 
Who's going to lend to buy to let landlords? It's hard enough to get an owner occupied mortgage now. I don't know many people with the price of a house in cash in the bank though doubtless they exist.
 
murphaph said:
If tenants keep forcing rents down when they can in fact pay the going rate then lots of landlords who are leveraged (not me thank god) will be forced to evict their tenants and sell up. There will be a reduction in rental property and basic economics tells us rents will increase as supply falls. It's just a question of who will be the last (wo)men standing when rents stabilise and head north again. Tenants should bear that in mind. That's why I like that Ryanair doesn't own Aer Lingus....cometition is good for the consumer, to a point!
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this does not stand up to even the flimsiest of reasoning....
 
whackin said:
this does not stand up to even the flimsiest of reasoning....
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Well at least make a counter-agument. If rents a depressed beyond a landlord's mortgage, he'll be forced to sell, fair enough so far?

Banks aren't lending for buy to let purposes anymore unless you have a wad of cash to bring to the table and even then it's not their cup of tea these days. This means most properties will be sold to home owners (yes, some of whom will be former renters so will reduce demand for rental property but many/most will be new entrants to the housing market-people who were living at home before, saving up for that now hefty deposit-it's not so easy to save up for what the banks want these days if you're paying rent every month).

So the available rental stock will be diminished. As I said-rents may ontinue to fall until we reach equilibrium (this will happen first in higher demand areas like Dublin, provincial places may never really recover).

The only way I can see an alternative is if landlords can't sell their properties in the first instance and banks repossess and become landlords themselves in large numbers. If that happens rents can continue to fall.
 
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