1. Know Your Rights & Responsibilities
If you are new to the rental sector or thinking of investing, it is vitally important that you are aware of your rights and obligations as a Landlord. The sector is governed by the Residential Tenancies Act and enforced by the Residential Tenancies Board (RTB). It is not possible to contract out of these obligations.
*You must register your tenancy with the RTB within one month of the start of the tenancy. It currently costs €90 to register and it is a legal requirement. Your tenancy must be registered in order to claim mortgage interest as an allowable expense against tax.
- Self-Manage or Letting Agent?
One of your first considerations should be whether to manage the property yourself or use a letting agent/property manager.
This will depend on your own circumstances and capabilities, do you have the time to dedicate to managing your property, are you confident that you are competent to do this?
You may prefer to engage a reputable agent to manage on your behalf, for this, you can expect to be charged a letting fee of typically between 5 per cent and 8 per cent, plus VAT at 21 per cent. Agents may also charge you to renew a lease with an existing tenant.
- Get Your Property Ready To Rent/Stage Your Property
Stage your property for the tenant you would like to attract. Your rental property must be in good order and meet the minimum standards for rental accommodation. A good fit-out does not have to break your purse strings, a well-presented property is easier to market, and good tenants are also likely to stay longer in nicely finished property.
- Ensure That You Are Insured
Ensure you arrange the right insurance cover for your investment property as the insurance risks associated with letting residential investment properties can be very high and are completely different to that of owner-occupied risks. Some landlords make the mistake of arranging a normal household policy which is far from adequate. An investment property requires specific investment / buy to let insurance.
- Robust Vetting and Selection Processes
A landlord must not engage in discrimination when advertising or selecting a tenant.
Vetting tenants is one the most important part of managing your rental. Having a good tenant is worth its weight in gold, so don’t rush this process. You do not want to rush the decision and engage bad tenants who may end up costing you thousands in the long run.
Ensure that you have conducted a thorough background/reference check. Check the RTB website for tribunal or adjudications that applicants may have been involved in previously. Know where your tenant works, if they disappear owing you money, you’ll want to try and find them and know where to start looking!
- Have A Good Inventory
Every landlord should have a detailed written and pictured inventory for each of their properties. An inventory is record of the condition of the fabric of the property as well as its contents, noted before a tenant moves in. Everything from the state of the roof, walls and floor coverings to furniture and any white goods supplied is documented.
The inventory outlines not only what is in the property, but also what condition the contents are in at the time of letting. Have your tenant sign the inventory. If there is damage above normal wear and tear then you may be entitled to hold on to part or all of the deposit.
A detailed inventory can help to prevent disputes when tenants move out.
- A Comprehensive Lease Agreement
A comprehensive lease agreement is the backbone to effectively managing your rental. Leases can be incredibly complex, and many landlords can find themselves falling foul of clauses which they either didn’t know existed or didn’t fully appreciate their importance. The lease agreement forms the basis for the landlord /tenant relationship for your property.
A good lease agreement puts everything important to the landlord down in writing and it helps to avoid disputes and disagreements during the course of the tenancy. Ensure that your tenants understand the contents of the lease agreement, it would be advisable not to let a tenant into a property without a signed lease agreement.
- Be Hands On
Ensure that you have good communication with your tenant, be responsive and invest in a toolbox and a pair of rubber gloves … unless you pay someone to maintain the property for you.
Your tenant will call you when something goes wrong, don’t be the absentee landlord, ensure you deal with any issue promptly – it will cost you more time and money in the long run.
- Inspect Inspect Inspect
It is important that you inspect your property every few months, at a time and date that is agreed with your tenant. Show your tenants you are professional and maintain a good relationship, use an inspection to check who is residing in the property and to check for any maintenance issues. If an issue needs addressing deal with it immediately, putting things on the long finger can often lead to larger costs.
Finally ……..
- Be On Top of Your Finances
Open a separate bank account for your rental property income and out-goings.
Check the bank balance (regularly) on a monthly basis to make sure that the rent is going through. Keep records of income and expenditure: it’s a business and should be treated in that manner.
It is advisable to build up a rainy-day fund to assist with unexpected maintenance issues.
Know your tax obligations, you are required to pay tax on rental income, but you can offset certain expenses against it.