Advice on renting a property in Dublin

Most Estate agents in Dublin will tell you the property market is starting to move again in Ireland but with liquidity still quite slow from the banks the masses are still renting.

We find ourselves in a situation where there is a shortage of stock which is driving rents upwards and also causing people to look outside Dublin to the larger commuter belts. Haden Properties have seen an increased number of enquiries per property and on occasion queues are back at some properties mirroring the days of the boom.

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Quick and fun uplifts for selling a house

So you have decided to sell your house. It may be in perfect condition, spotlessly clean, and in a perfect location…selling a house in Dublin for example, but then again maybe not and maybe it needs a bit of a lift inside and out. Here are 4 quick and easy tips, recommended by the top professional property services, to uplift your house so you get the price you want:

 

Get the rubber gloves out

First things first, your house needs a thorough cleaning, way before a potential buyer ever steps in the door. There is nothing more off putting to a potential buyer than the dust in and around those nooks and crannies in your home. You may not notice it yourself but for someone viewing the house for the first time small things like this can really deter them. Remember a house can never be too clean even if this means resorting to your old toothbrush to get into the places you can’t reach. Make a day out of it and make sure the place is pristine by the time the viewing comes around. If I was to buy a house in Dublin and I was viewing three or four, this could make all the difference to my decision.

Freshen up your kitchen CABINETS

For potential buyers, the kitchen can be the make or break when it comes to signing the dotted line. Giving your cabinets a quick coat of paint is a simple and inexpensive way to leave this space looking as good as new. If your cabinets are looking a bit old and outdated or have been subject to a few coffee spills over the years, a lick of paint is the solution. When it comes to choosing the right paint for the job, one with a semi-gloss finish is recommended as it is easier to wipe down afterward. White paint is still the most popular colour among most homeowners as it gives any kitchen a clean look and makes the space feel more open by maximising the natural light. Remember, you’re not just selling a house, you are selling a home.

Fix up your Garden

Investing a small amount of your time into your garden prior to putting it up on the market is absolutely integral. Having a well located home with a beautiful interior, along with a poorly maintained garden is a sure way to whittle away the potential buyers. First impressions are everything when it comes to house sales and having a well-kept garden can be a deal clincher. It isn’t necessary to pull out all the stops and fully transform your garden with a big landscaping job. A few small jobs will suffice. Cutting the grass, planting some strategically placed bushes and flowers around the garden and spraying any surrounding fences is a sure way to impress when selling a house.

Make sure the bathrooms are gleaming

Bathrooms are up there with the most important rooms in the house. A dirty bathroom can be very off-putting to visitors and viewers alike. Wipe down any tiling, polish all taps, scrub the toilets and baths, and check the ceilings for water marks. Re-grouting tiles and touching up ceiling paint may be necessary in some cases but can really make a difference when trying to impress buyers. Once again, an old toothbrush might come in handy for these types of tasks so ensure your bathroom is sparkling.
There are plenty of things a seller can do to uplift their home before putting it on the market. You may not think it, but small things like a bad odour or a dirty front door can be the deal breaker for some buyers. Don’t give the viewer any reason to be disappointed by an unpleasant viewing. These tips will hopefully help you maximise the attractiveness of your home without the necessity of changing it making it more desirable to potential buyers.

Landlords Tax_Fotor

 

I am non-resident, how am I taxed? 

Tax is due on only your profit rent, i.e,. The balance of income after deductions of allowable expenses. The landlord is entitled to claim relief for expenses, which are usually allowed in arriving at the rental profit. The landlord is also entitled to a credit for the tax deducted by the tenant. Form R 185. should be submitted by the landlord with the tax return to obtain credit for the tax retained.

I have a foreign property, how is my rent taxed?

In general, income from foreign property is computed on the full amount of the income arising. Irrespective of whether the income has or will be received in the State. In the case of foreign rental income this income is charged under Case III of Schedule D and the same deductions and allowances are available as if the income had been received in the State. Deductions are also normally available in respect of such income for sums in respect of foreign tax paid. This income should be included in an individual’s tax return on the Foreign Income panel.

These rules do not apply to a person who is not domiciled in the State or who is an Irish citizen not ordinarily resident in the State. In such cases, income tax is computed on the full amount of the actual sums received in the State from such remittances, etc. without any deduction or relief given.

My tenants are looking for tax relief on the rent?

Tax relief. may be claimed by a tenant paying rent to a landlord for private accommodation by completing Form Rent I. This form is available at www.revenue.ie. Revenue’s Forms and Leaflets Service at LoCall 1890 30 67 06 or from any Revenue office. The annual maximum relief allowable is given on Form Rent I.

Do I need to keep records?

You must keep full and accurate records of your lettings from the start. You need to do this whether you send in a simple summary of your profit/loss, prepare the accounts yourself or, have an accountant do it. All supporting records such as invoices. bank and building society statements, cheque stubs, receipts etc.. should also be retained. You must keep your records for six years unless your Revenue office advises you otherwise.

What if I am not based in Ireland? 

If a landlord resides outside the country and rent is paid directly to him/her or to his/her bank account either in the State or abroad. Tax must be deducted by the tenant at the standard rate of tax (currently 20%) from the gross rents payable. Failure to deduct tax leaves the tenant liable for the tax that should have been deducted.

Example:
Gross rent per month €1000
Deduct tax (I 000 x 20%) €200
Pay to Landlord (1000-200) €800

The tenant must also give a Form R185* to the landlord to show that the tax has been accounted for to Revenue.

However as a non-resident landlord you can appoint a “Tax” agent, (estate agent, family member, accountant) who is resident in the State to manage the collection of the rents. The rents must be paid gross to the agent, the agent is then chargeable to tax on the rents as Collection Agent for the landlord and is required to submit an annual tax return and account for the tax due under Self Assessment. Leaflet IT10 Guide to Self Assessment- provides more detailed information.

Note: The agent appointed need not be a professional person, i.e., it can be a family member or other person prepared to take on the responsibility and undertakes to make annual tax returns and account to Revenue for the tax due.

* (Available from www.revenue.ie, Revenue’s Forms and leaflets Service at

LoCall 1890 306706 or your local Revenue office)

Certain mortgage protection policy premiums with effect from 1 st January 2002. Refer to Appendix I.

Capital Expenditure on certain properties under the various Incentive schemes.

Where do I stand with the interest paid on loans?

Certain restrictions were introduced on the deductibility of interest on borrowed money used on or after 23/4/1998. in the construction. purchase. or repair of rented residential premises in the State. or 7/5/ 1998 in the case of foreign residential premises. However the relief for interest on borrowed money was restored for such interest accruing on or after 1 January 2002. There were some transitional arrangements in place in the interim period.

Relief is disallowed as respects interest accruing on or after 6 February 2003 where the let premises was purchased from the spouse of the person chargeable in respect of the rental income. However. the dis-allowance of interest relief does not apply in the case of legally separated or divorced persons.

What can I offset against Wear and Tear?

If a premises is let for residential purposes and it is furnished. a claim can be made for a wear and tear allowance based on the cost of the furniture and fittings. It will be necessary to retain an itemised list of expenditure incurred each year.

With effect from 4 December 2002 the allowance is 12.5% per year over 8 years.

For the period between 1 January 2001 and 3 December 2002 the allowance was 20% per year over 5 years.

Prior to 1 january 2001 the allowance was 1 5% per year for the first 6 years and 10% in the 7th year.

What expenses can be claimed?

Broadly speaking. in calculating your rental expenses you can deduct expenses so long as they-

Are incurred wholly and exclusively for business purposes, and . are not of a capital nature.

The following are examples of the type of expenses that may be claimed for:

Rents payable by the landlord in respect of the property. i.e.. ground rent

Rates or levies payable on the property. i.e.. water rates, refuse collection etc.

Cost of any service or goods provided by the landlord. i.e.. gas. electricity. central heating. telephone rental. cable television etc. for which they do not receive a separate payment

Maintenance, i.e.. cleaning and general serving of the premises

Insurance of the premises against fire. public liability insurance, etc.

Management. i.e.. actual cost of collection of rents. advertising. etc.

The Rise of the Reluctant Irish landlord

The Rise of the Reluctant Irish landlord

If you are on the wrong side of 38 and like so many bought your first home which was a 2 bed apartment over 10 years ago you are possibly now one of Irelands wave of reluctant landlords.

Things were different in 2004 when you bought, the property boom was in full swing and your new home was going to be a 3-4 year investment until you decided to sell it to the next wave of investors/ first time buyers for about 50% more than you bought it. Then you had your eye on that house just outside the postcode where you’re from but it would have been perfect for another few years until you had enough equity to move onto a road three or four down from Mum and Dads, well that was the plan….

However it’s 2014 and things are decidedly different from your initial blue print, the fabulous 2 bed apartment with the designated parking space is now asking 40% less than you paid. You’re now married with one child and are contemplating a second however, as it is,  things are kinda cramped here with all of little Ella’s toys and you’d love a garden for the 3 week Irish summer…

Whilst prices have dropped considerably there’s still no real liquidity in the Irish market and even if you could get a loan you still have that grey elephant, €550k mortgage, in the background so you decide to move out, rent your apartment and rent a house. How hard can it be…?

  1. Can you do this yourself?

It’s at this stage you need to sit down and decide if you have the time, knowledge and patience to let/manage the property yourself or will you get a  Letting Agent / Managing Agent to look after everything for you. Take some time and research what companies are out there and ask your friends for direction on who they’ve used. Fee’s will vary depending on who you talk to but traditionally you should anticipate paying between 5-7% of the annual rent for a letting only service and between 6-10% for full management, these figures will also be subject to VAT. However service fees can be offset against your annual income tax. You will also now be liable for additional tax as any rent you receive is now classed as additional income. These cases vary so talk to your accountant for specific details. These fees may seem high at first but when you weigh them up against the experience and insight a good Agent has it will be worth it, especially if you have any problems with tenants or you get a phone call about a burst pipe in the middle of the night.

  1. Prepare the property

Firstly you need to step back and decide what you’re going to bring with you and what you’re going to leave. Just because you think that hand carved elephant you got on your honeymoon in Africa is cute and quirky does not mean your tenant will, in fact it will probably be thrown in a box along with a lot of other items you leave behind and put in storage somewhere. If there is anything you have any emotional attachment to take it out, whilst this was your first home it is now going to become someone else’s home so you are going to have to cut all emotional attachments to the property. The house should be professionally cleaned and if required painted, preferably a neutral colour. Professional cleaners are always a good idea for the sake of €100, they clean every day and will pay close attention to the oven, extractor fans, fridges and bathrooms as these are the traditional area’s tenants overlook when handing back a property so having them the way you want them returned and highlighting this is always a good idea. You are also legally required to have a B.E.R. cert, (Building Energy Rating) for the property to let or sell it, prices vary but you should get an average 3 bed house done for as little as €150.

  1. Mortgage Provider/ Home Insurance

You are obliged to notify your lender that you will be renting out the property as technically your home is now a R.I.P., (Residential Investment Property). Likewise you should notify your insurance company and transfer your home contents as you will not be liable for the personal possessions of the tenants and they should be made aware of this in their lease.

  1. Reference, Reference, Reference!

As you hold viewings you will meet a selection of people who will have an interest in your property, apart from the initial meeting and brief chat with whom can seem the right person, you should also request references and lots of them…

  • Landlord Reference – If they’re renting there should be no reason why you can’t get a written reference with a contact number, plus don’t be afraid to ask why they’re leaving their current property.
  • Employers Reference – Ideally your prospective tenants are in full time employment and should have no issue obtaining a written reference with contact details from their employer.
  • Photographic ID – This should either be a passport or drivers licence and in colour, don’t be afraid to ask to see the originals on receipt too.
  • Bank Statements / Reference – This should be from whoever’s account the rent will be paid from.  You should also be prepared as some tenants may have an issue with providing you with a copy of their bank statement. The reason you wish to see these is so you are clear there is a regular mandated salary coming into the account and the account is not constantly overdrawn as this could signify rent payment issues later.
  • P.P.S. / Email/ Contact No. – All of this information will be required for the lease and for your P.R.T.B. registration
  1. Lease

If you have decided to look after the property yourself we strongly advise going to your solicitor for a current lease, it’s the bones of the tenancy and should there be any issues in the future it will be the first thing the P.R.T.B. will refer to. The number of people that come to us after a tenancy is gone wrong looking for advice only to discover a photocopy of a lease a friend of a friend gave them is quite high.

6. Occupancy
On the day the tenant takes possession you should meet them at the property and run through it with them before you sign the lease. Highlight the condition of the oven, fridge, back garden etc. so everyone knows where they stand from the get-go. All parties will sign the lease and you should have the tenant sign a standing order form for the rent, at this stage you will also receive the first months’ rent to go with the security deposit, the deposit should be lodged into a secure unused account as this will be returned to the tenant once all is ok when they decide to vacate.

If you have followed these simple steps you should be on your way to a hassle free tenancy with minimal disruption to you and your new tenant. However if it’s still a bit daunting and you feel you may need some more guidance; Feel free to get in touch with us at +353 (1 )6852059 or info@hadenproperties and we’ll be happy to help. Good Luck :)

 

Richard Farrell