Tenant leaving rental property in RPZ - Options?

R

RonanL

Registered User
Messages
34
Hello.

I have a rental property in an RPZ and the tenant has given me notice. The rent is much lower than market rates - 1055 per month, and the only comparable property on daft is up for 3250 per month (which is crazy).

I'd like to keep the property, as my kids may need it in the future (eldest is just finished 1st year in school, so it's a while off, so maybe that's silly?), but I'm open to all options. Having said that, I would be reluctant to leave it empty for two years, as I've seen discussed on other threads.

I was looking at the citizens information page on short term lets, and noted that one of the exceptions is for short term corporate lets, which I found interesting. Could that be an option for a couple of years so the rent could be reset to a more reasonable level? Are there any agents/platforms who facilitate such a thing?

Any other options apart from selling? Feel free to DM if you'd prefer!

Thanks
 
Rents are astronomical as there is nowhere to rent. If you look at the ads the auctioneers are inundated with potential renters and don't want to deal with them. I called into a prominent one recently on the high street in a city and they had nothing at all to rent.

You could try the Ukranian scheme for €800 if it's still up and running. Rent tax free for 2 years and you are out of the RPZ then. Discussed here:

Ukranian €800 Payment Scheme - Anyone Availing of It?

I have a place that would be suitable, I like the idea of helping a Ukranian family and I like the idea of €800 tax free. Everyone's a winner, right? My only concern is that when the government eventually stops paying €800 per month for their accommodation and the tenant can't afford to pay the...
www.askaboutmoney.com
 
Corporate lets need a much higher spec than typical Irish rental property and you may need to invest a fair bit to get to this point. It could be a bit wasted given your eventual purpose.

RonanL said:
Having said that, I would be reluctant to leave it empty for two years, as I've seen discussed on other threads.
Click to expand...
You could have a caretaker who would pay all bills and then you reset to market rents in two years

Alternatively you could take occupation of the property yourself and have licensees in the empty bedrooms.

Your breakeven period is very short here…..
 
is the BER rating low? You can reset to market rates if you can increase the BER by 7 increments. Of course that all needs investment but worth looking into at least.
 
aristotle said:
is the BER rating low? You can reset to market rates if you can increase the BER by 7 increments. Of course that all needs investment but worth looking into at least.
Click to expand...
Not particularly low unfortunately and since it's an apartment, I don't think that will be an option. Thanks for the reply though.
 
I was in the same boat, low rent and couldn’t increase it, and was thinking about kids might needing the property in the future for college or work.

But decided to sell as kids needing it was at least 10 years away and they could end up in college or working anywhere, who knows even abroad.

When I did the numbers I could get a similar return by buying shares and have zero hassle and full flexibility to sell.

It’s a great time to sell anyways given the demand. If you have other debts then you could clear them down etc. I’m sure you have thought about all that too.
 
Yeah, selling is an option for sure - honestly I think there's a bit of sentimentality involved too, so when I look at the numbers it may well be best to sell. Having said that, I've got a good pension through work, so maybe it's no harm to have the second property from a diversity perspective.

The Ukrainian scheme appeals somewhat - it would help out a family in need, and since it's tax free, it's probably much of a muchness compared to what we're currently getting in rent. My main fear would be what happens after two years. Hmmmm.
 
My local council (Louth) regularly advertise for property for Ukrainian families, and in their advert they state that the property must be unoccupied and not previously rented. Don't know if it applies elsewhere.

https://x.com/louthcoco/status/1778793119741350391?t=jT3RFdFOlxC_axFGUB--uQ&s=19
 
Interesting. I'll do a bit more research. The rental system is so broken.
 
RonanL said:
1055 per month, and the only comparable property on daft is up for 3250 per month (which is crazy).
Click to expand...

Even if you want to remain a landlord, these figures suggest that you should sell the property and buy a similar one as an investment.

You would face the initial costs of selling and buying and maybe CGT, but you would be better off by €24,000 a year.

Brendan
 
Dr Strangelove said:
Bear in mind an apartment may trade at a big discount if it’s subject to an RPZ rent of around a third of market value.

You’re limiting yourself completely to owner occupiers.
Click to expand...
As I'm in the market the first question I ask is the RPZ. Clearly it affects property prices.
 
Dr Strangelove said:
an apartment may trade at a big discount if it’s subject to an RPZ rent of around a third of market value.
Click to expand...

You are limiting yourself to owner occupiers and that will discount the price, but by how much?

Is there another owner occupied property in the building which might do a swap with you?
 
Thanks. I really don't know how realistic that 3250 figure is, but I get your point.

The swap idea is definitely a left field one - not even sure how that might work, but I'll add it to the list of options!
 
I’d assume a swap would only work if both properties have no mortgage. Can’t see banks doing anything like that without mortgages being fully paid off first.

Selling and buying another place that was never rented out is a good option. But you need to be sure it was never rented before.
 
Hi Aristotle

The mortgages are not relevant assuming both have good credit records.

Ronan owns a property worth €500k with a €200k mortgage
Johnny owns a property worth €500k with a €100k mortgage.

Ronan gets loan approval of €200k to buy Johnny's property and vice-versa.

They close on the same day.

Brendan
 
On the selling and buying front - the apartment/duplex I own is on a tracker currently, because it was my own place which it didn't make sense to sell when we were trading up. If I was to sell, and buy another, I'd presumably have to get some sort of investor mortgage, which is something I know nothing about, but I'm guessing they come with less favorable terms?

Selling now does seem like a good time - so maybe selling, investing the equity in something short term, and then buying another property if the market cools down a bit would be a decent approach.

Planning to review all this with a financial advisor in a few weeks - thanks for all the input.
 
Just re-read the thread and realized I never replied to this one about corporate lets. The reason I had it in my head was a neighbour let their house recently for a fortnight to some people who were visiting for work. They didn't do any special work on the place - with hotel prices being so high, I could see how it might work. I did some basic maths, and if I charged 300 euro a night, I'd only need 45 nights (or 3 15 night stints) to bring in what I'd get in a year for rent. There would obviously be other expenses, but if it was even rented a quarter of the year, that would more than make up for the extra expense. A lot more hassle though admittedly.
 
FYI for anyone who stumbles upon this later - I spoke to someone in my local council about the offer a home option, and there was no issue with it being previously rented. I was completely up front about the situation, and my motivations. Honestly, I feel like offering the place to some displaced Ukrainians will be a win win as it will help them and since the 800 is tax free it won't really leave me any worse off than I am currently. The scheme has only been guaranteed up to March 2025 though, so I may have to reassess at that point.

Since the tenant is moving out, is there any issue with ending the tenancy with the RTB now, or does it have to wait until they move out? The tenant is a family friend (part of the reason the rent was never really increased), so I know she won't have a problem with it.
 
You must log in or register to reply here.
Menu
Log in
Register