There are almost 500,000 single-property landlords in Ireland, accounting for about two thirds of total residential lettings. For these non-professional landlords the many legal obligations involved in renting property and specific conditions that apply to residential tenancies can be a burden.
Landlords can avoid unnecessary and unexpected headaches by having everything agreed and knowing their rights and obligations before handing over the keys. These tips will help, but take individual advice before starting or ending a tenancy.
- Find out how much the letting is worth to you. Obviously you need to decide on what rent to charge but you should also work out how much you will make from the letting. Rents are increasing faster than house prices at the moment, but there are costs involved. Research the area and look at existing property listings to calculate a fair market rent. If you bought the house to live in originally, check your mortgage conditions as you will probably need agreement from your bank before letting it. Work out your tax liability on the rent and make sure that you will have enough net income to meet any mortgage repayments and hopefully make a profit.
- Decide the term of the lease. Many landlords agree an initial letting of 12 months and then renew if both sides want to continue. In recent years both landlords and tenants are willing to consider longer leases, particularly where the tenant has a family for example. Whatever the duration, it is important to be aware of the law on protected residential tenancies. Once a tenant is in place for 6 months they are entitled to remain in the property for 4 years, and a protected tenancy can roll over after that. Strict rules apply to the termination of protected tenancies and even if you are entitled to terminate you could still be tied to a longer term or notice period by the lease. Terminating a residential lease is a complicated procedure with very specific requirements, so take advice before doing anything.
- Chose the right tenant. Make sure that you are satisfied with the proposed tenant and their ability to pay the rent. Look for appropriate references and a deposit up front. Be aware of equality legislation which prohibits discrimination. If you are thinking of refusing a particular tenant, make sure that your reasons are fair and justifiable.
- Check the contents. Make an itemised list of contents in the property to be included in the lease. Take photos showing the condition of the property and all contents and save them with the dates recorded so that they can be produced in the event of any dispute.
- Manage the letting. A landlord’s job continues throughout the letting and there are post-lease and ongoing obligations to comply with, including giving the tenant a rent book and registering the tenancy with the Private Residential Tenancies Board. You will have a lot of personal information about your tenant, so be sure you know about your obligations under data protection law. You should give serious consideration to having an auctioneer or letting agent manage the tenancy. There is a cost to doing this, but if you are not a professional landlord you could save a lot of inconvenience and stress by outsourcing the day-to-day management of the letting.
Be sure to read our update on changes to residential tenancies law in late 2015.