Tenants now have a lot of choices in the rental market and will not settle for poorly furnished, grotty or a badly maintained property. A well furnished and well presented property will rent more quickly and tenants are more likely to stay longer. How a property is furnished and presented is a key part of marketing your rental investment. Don’t expect prospective tenants to be happy with old fashioned, damaged and miss-matched furniture. Ask yourself, if you were a prospective tenant, would you rent this property? A good fit-out does not have to be expensive but basic rules apply – paint the walls in neutral colours, consider leather suites as they are hard wearing and look good, install wooden floors in high traffic areas. Make sure that the house or apartment is meticulously clean and that all appliances are in working order.
It is important that all landlords are aware of the legal obligations for both landlords and tenants. The Residential Tenancies Act 2004 governs the residential letting market in Ireland and sets out basic tenancy obligations for both landlords and tenants – how much notice a tenant must be given and under what circumstances the tenant can be asked to leave, for example:
The longer the tenant has lived in the property, the longer the period of notice the tenant is entitled to receive. The Act also established the PRTB (Private Residential Tenancies Board) to resolve disputes between landlords and tenants, and to operate a system of tenancy registration. Every landlord must register a tenancy with the PRTB within 30 days of the tenancy commencing (i.e. the tenants moving in). It costs €70 to register and it’s a landlord’s legal obligation to do so. The PRTB also operates a dispute resolution service to resolve disputes between landlords and tenants. Only landlords who are registered may avail of this service. It is, however, available to all tenants regardless of whether their landlord has registered. Remember tenants have rights too!
One of the key considerations with an investment property is deciding whether to manage the property yourself or to use a letting agent or management company. Managing investment property can be a time consuming activity and requires a lot of effort to:
• Advertise the property
• Arrange viewings
• Screen tenants and check references
• Complete the lease agreement
• Register with the PRTB
• Ensure the rent is paid on time
• Deal with on-going repairs
• Handle tenants issues and complaints
Do you live close enough to the property to respond to phone calls from tenants? Tenants expect a landlord who is responsive and gets maintenance issues resolved quickly. Do you have the time and the desire to be this involved with your property? If not, consider handing the property over to an agent. Agent fees are an allowable expense against tax on rental income.
If you decide to let the property yourself and are advertising on the Internet, it is always a good idea to show plenty of photographs of the property. Listings with photographs tend to be viewed more than those without. If you manage the property yourself, make sure to inspect it at least twice a year. As of 1st January 2009 any property offered for sale or to let needs a Building Energy Rating Certificate so make sure you have your BER Cert handy!
Landlords are always anxious when they have an empty property, especially in the current environment of rising mortgage repayments. Take the time to screen potential tenants properly – do not rush to rent your property to the first person who views it! While no landlord wants to have a vacant property, it is better in the long run to have an empty property than one with bad tenants who may end up costing you thousands in lost rent and damages.
Be objective and choose the most suitable tenant. Screen tenants on the phone initially and then set up appointments to view the property. Ask relevant questions like why they are moving, how long have they lived at their current address? Having chosen the best candidate, get a holding deposit subject to reference checks. Get at least two written references and check them out with follow-up phone calls to ensure that they are genuine. Take a months rent as security deposit against damages before tenants move in.
Keep the details of your other applicants on file just in case your first choice changes their mind and does not go through with signing the lease or their references do not check out.
When managing your property investment, work out the finances very carefully. Include all costs in financial projections such as, legal fees, stamp duty and fit-out costs. Don’t forget to allow for the cost of on-going maintenance. Be realistic about potential rental income; research the market in your area to find out what rents similar properties are achieving. You should always factor in a vacancy period in your projections as most rental properties will be empty at some point. Build up a contingency fund to cover your costs when the property is empty or to pay for unexpected repairs and maintenance.
As a landlord you are liable for tax on the rental income and will have to make a tax return every year. Rental income is liable to income tax but you are allowed to offset certain expenses such as mortgage interest, repair and maintenance costs, advertising fees and insurance, to name but a few. Open a separate bank account for rental property income and out-goings. Get the rent paid by standing order into the account and use internet banking to ensure the rent is paid on time. If it is not, act promptly and contact the tenants immediately.
Make sure to keep accurate records of all income and expenses and keep all receipts. Treat it like a business and review your costs on an annual basis. Check you are getting the best available mortgage rate and insurance premium. Remember, proper landlord insurance is required as a standard household insurance policy is not sufficient. An inventory is the itemisation of the contents of the property and their condition. Every landlord should have an inventory for their property as it outlines not only what is in the property, but also what condition the contents are in at the time of letting. This can help to prevent disputes when tenants move out. Be prepared to expect normal wear and tear during a tenancy.
It is also a good idea to take photographs of the property and its contents so that you have a photographic record of the condition of all aspects of the property. Always use a lease agreement that complies with the Residential Tenancies Act 2004. A good lease agreement is essential to the effective management of investment property and it helps to avoid disputes and disagreements during the course of the tenancy. The lease agreement should outline both landlord and tenant obligations, such as, who is responsible for maintaining the garden, for instance. The lease should also highlight that the deposit paid by the tenant cannot be used as the final month’s rent. Be professional and business-like in your dealings with tenants. Remember they are your tenants, not your friends. Respond promptly to phone calls or messages from tenants. Deal quickly with repair or maintenance problems and keep your promises – if you commit to getting something done, then get it done. Keep a professional, polite attitude to retain the respect of your tenants. Once the tenants are paying their rent and maintaining the property, keep your distance and respect their privacy – it is their home, not yours!
TO SUM IT UP:
Prepare the property for the rental market Furnish and present the property well. Ensure it is clean and that all appliances are working properly. Maintain the property on a regular basis.
Manage your finances. Keep all receipts. Factor in all costs. Know what expenses are allowable against tax and make an annual tax return.
Build up a contingency fund This will cover your costs when the property is empty or to pay for repairs and maintenance.
Be realistic Make sure you are realistic about the potential rental income you can achieve. Research similar properties in the area and factor in vacant periods.
Have the correct insurance An investment property requires specific investment property insurance. Don’t make the mistake of relying on normal household cover.
Screen tenants properly Screening tenants is one of the most important aspects of managing rental property. Take the time to screen potential tenants – get and check references.
Use a good lease agreement The lease agreement should outline both landlord and tenant obligations. Use a lease that complies with the Residential Tenancies Act 2004.
Have an inventory of contents This outlines the contents of the property and their condition. This helps to avoid disputes when tenants move out.
Know the rules and regulations Register with the PRTB (Private Residential Tenancies Board). Educate yourself on landlord and tenants rights.
Treat it like a business Be professional and business like in your dealings with tenants and any other parties.
The longer the tenant has lived in the property, the longer the period of notice the tenant is entitled to receive. The Act also established the PRTB (Private Residential Tenancies Board) to resolve disputes between landlords and tenants, and to operate a system of tenancy registration. Every landlord must register a tenancy with the PRTB within 30 days of the tenancy commencing (i.e. the tenants moving in). It costs €70 to register and it’s a landlord’s legal obligation to do so. The PRTB also operates a dispute resolution service to resolve disputes between landlords and tenants. Only landlords who are registered may avail of this service. It is, however, available to all tenants regardless of whether their landlord has registered. Remember tenants have rights too!
One of the key considerations with an investment property is deciding whether to manage the property yourself or to use a letting agent or management company. Managing investment property can be a time consuming activity and requires a lot of effort to:
• Advertise the property
• Arrange viewings
• Screen tenants and check references
• Complete the lease agreement
• Register with the PRTB
• Ensure the rent is paid on time
• Deal with on-going repairs
• Handle tenants issues and complaints
Do you live close enough to the property to respond to phone calls from tenants? Tenants expect a landlord who is responsive and gets maintenance issues resolved quickly. Do you have the time and the desire to be this involved with your property? If not, consider handing the property over to an agent. Agent fees are an allowable expense against tax on rental income.
If you decide to let the property yourself and are advertising on the Internet, it is always a good idea to show plenty of photographs of the property. Listings with photographs tend to be viewed more than those without. If you manage the property yourself, make sure to inspect it at least twice a year. As of 1st January 2009 any property offered for sale or to let needs a Building Energy Rating Certificate so make sure you have your BER Cert handy!
Landlords are always anxious when they have an empty property, especially in the current environment of rising mortgage repayments. Take the time to screen potential tenants properly – do not rush to rent your property to the first person who views it! While no landlord wants to have a vacant property, it is better in the long run to have an empty property than one with bad tenants who may end up costing you thousands in lost rent and damages.
Be objective and choose the most suitable tenant. Screen tenants on the phone initially and then set up appointments to view the property. Ask relevant questions like why they are moving, how long have they lived at their current address? Having chosen the best candidate, get a holding deposit subject to reference checks. Get at least two written references and check them out with follow-up phone calls to ensure that they are genuine. Take a months rent as security deposit against damages before tenants move in.
Keep the details of your other applicants on file just in case your first choice changes their mind and does not go through with signing the lease or their references do not check out.
When managing your property investment, work out the finances very carefully. Include all costs in financial projections such as, legal fees, stamp duty and fit-out costs. Don’t forget to allow for the cost of on-going maintenance. Be realistic about potential rental income; research the market in your area to find out what rents similar properties are achieving. You should always factor in a vacancy period in your projections as most rental properties will be empty at some point. Build up a contingency fund to cover your costs when the property is empty or to pay for unexpected repairs and maintenance.
As a landlord you are liable for tax on the rental income and will have to make a tax return every year. Rental income is liable to income tax but you are allowed to offset certain expenses such as mortgage interest, repair and maintenance costs, advertising fees and insurance, to name but a few. Open a separate bank account for rental property income and out-goings. Get the rent paid by standing order into the account and use internet banking to ensure the rent is paid on time. If it is not, act promptly and contact the tenants immediately.
Make sure to keep accurate records of all income and expenses and keep all receipts. Treat it like a business and review your costs on an annual basis. Check you are getting the best available mortgage rate and insurance premium. Remember, proper landlord insurance is required as a standard household insurance policy is not sufficient. An inventory is the itemisation of the contents of the property and their condition. Every landlord should have an inventory for their property as it outlines not only what is in the property, but also what condition the contents are in at the time of letting. This can help to prevent disputes when tenants move out. Be prepared to expect normal wear and tear during a tenancy.
It is also a good idea to take photographs of the property and its contents so that you have a photographic record of the condition of all aspects of the property. Always use a lease agreement that complies with the Residential Tenancies Act 2004. A good lease agreement is essential to the effective management of investment property and it helps to avoid disputes and disagreements during the course of the tenancy. The lease agreement should outline both landlord and tenant obligations, such as, who is responsible for maintaining the garden, for instance. The lease should also highlight that the deposit paid by the tenant cannot be used as the final month’s rent. Be professional and business-like in your dealings with tenants. Remember they are your tenants, not your friends. Respond promptly to phone calls or messages from tenants. Deal quickly with repair or maintenance problems and keep your promises – if you commit to getting something done, then get it done. Keep a professional, polite attitude to retain the respect of your tenants. Once the tenants are paying their rent and maintaining the property, keep your distance and respect their privacy – it is their home, not yours!
TO SUM IT UP:
Prepare the property for the rental market Furnish and present the property well. Ensure it is clean and that all appliances are working properly. Maintain the property on a regular basis.
Manage your finances. Keep all receipts. Factor in all costs. Know what expenses are allowable against tax and make an annual tax return.
Build up a contingency fund This will cover your costs when the property is empty or to pay for repairs and maintenance.
Be realistic Make sure you are realistic about the potential rental income you can achieve. Research similar properties in the area and factor in vacant periods.
Have the correct insurance An investment property requires specific investment property insurance. Don’t make the mistake of relying on normal household cover.
Screen tenants properly Screening tenants is one of the most important aspects of managing rental property. Take the time to screen potential tenants – get and check references.
Use a good lease agreement The lease agreement should outline both landlord and tenant obligations. Use a lease that complies with the Residential Tenancies Act 2004.
Have an inventory of contents This outlines the contents of the property and their condition. This helps to avoid disputes when tenants move out.
Know the rules and regulations Register with the PRTB (Private Residential Tenancies Board). Educate yourself on landlord and tenants rights.
Treat it like a business Be professional and business like in your dealings with tenants and any other parties.
Quirke Estate Agents.© All Rights Reserved 2008
89 Waterloo Road, Dublin 4
Tel: +353 1 6688403 Fax: +353 1 6689433
89 Waterloo Road, Dublin 4
Tel: +353 1 6688403 Fax: +353 1 6689433
