1. Know Your Rights & Responsibilities.
If you are new to the rental game or thinking of investing, it is important that you are aware of your rights and obligations as a landlord. Many people are unaware that the sector is governed by the Residential Tenancies Act enforced by the Residential Tenancies Board (RTB). There are strict regulatHions in place and it is not possible to contract out of these obligations (i.e. the legislation overrides the terms of any tenancy agreement that you have with a tenant).
There can be fines, sanctions and even criminal convictions for landlords that do not comply, therefore do your homework and know what your rights and responsibilities are.
2. Registration With The RTB.
You must register your tenancy(s) with the RTB within one month of the start of the tenancy. It currently costs €90 to register and it is a legal requirement. Annual registrations will be in effect in 2020 at a cost of €40 per year.
Your tenancies must be registered in order to claim mortgage interest as an allowable expense against tax.
3. Self-Manage or Letting Agent?
Are you going 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? Do you have a realistic comprehension of what’s involved?
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 between 5 per cent and 8 per cent, plus VAT at 21 per cent. Agents will also charge you to renew a lease with an existing tenant.
4. Stage Your Property, Ready To Rent.
Get your property ready 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 be overly expensive, a well-presented property is easier to market, and good tenants are also likely to stay longer in nicely finished properties.
Good Tenants are worth there weight in gold!
5. 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 bog standard Home Insurance policy labelled for landlords, which is far from adequate. An investment property should be met with a Property Owners All Risks type cover which your Broker can arrange, once you stipulate your preference for this more comprehensive type cover.
Talk to the experts at S.A. Faughnan (Brokers) Ltd. for further information on Insurance @ safaughnan.ie or contact 824 5555
5. Robust Vetting and Selection Processes
A landlord cannot engage in discrimination when advertising or selecting a tenant.
Vetting tenants is one the most important part of managing your rental 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!
6. Importance Of A Good Inventory & Regular Inspection
Every landlord should have a detailed 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 before a tenant moves in. Everything from the state of the roof, walls and floor coverings to furniture and any white goods supplied is recorded.
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. You have to expect normal wear and tear during a tenancy but, if there is real damage to the property, you’re entitled to hold on to part or all of the deposit.
A detailed inventory can help to prevent disputes when tenants move out.
It is also important that you inspect your property every few months, at a time and day that is agreed with your tenant. Show your tenants you are present 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.
8. 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.
Members can access the IPOA Lease Agreement through the members section of the website – HERE
9. Be Hands On
Have good communication with your tenant, be responsive, you may need to 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, it will cost you more time and money in the long run if you do not respond.
10. 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.
Find Out More – Contact the IPOA Team Today 01-8276000