1. Self-Manage or Letting Agent?
Are you going to manage the property yourself or use a letting agent/property manager/ digital solution?
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? The RTB and IPOA are great as a resource if you do need advice and decide to manage your property yourself. We as a team at PropertyPA post regular blogs on how to do and advice for landlords and will allow you to manage your property digitally on our platform if you are restricted by time or distance.
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 and to source tenants so be prepared.
2. Registration With The RTB.
You must register your tenancy(s) with the RTB within one month of the start of the tenancy.
Landlords constantly ask us here at PropertyPA if registering their property is essential. We have previously discussed when registration is a legal requirement here. In short, 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. 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 regulations 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. Here you will see the rights and responsibilities of being a landlord.
4. Choose the right tenants in the selection process
A landlord cannot engage in discrimination when advertising or selecting a tenant.
Vetting tenants is one of the most important parts 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 here for tribunal or adjudications that applicants may have been involved in previously. If you want to go a step further you can always check where your tenant works, if they disappear owing you money, you’ll want to try and find them.
5. Get 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. You can find the list of minimum standards acceptable here.
Good tenants are also likely to stay longer in nicely finished properties.
6. Have a Comprehensive Lease Agreement
A comprehensive lease agreement is the backbone to effectively managing your rental. 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. Many landlords ask how it would be advised to get a tenant removed from the premises, well start with a good lease agreement would be the response.
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. At PropertyPA we will give landlords access to various rental agreements.
7. 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. This is very important as accidental or first time landlords are not aware of this.
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.
8. Importance Of A Good Inventory & Regular Inspection
Every landlord should have a detailed inventory for each of their properties. An inventory is a 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. 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. At PropertyPA we provide digital inspections of your property which can be requested via the platform.
9. Have Good Communication with your Tenants
Have good communication with your tenant, be responsive. Within PropertyPA you will be able to have a simple form of communication with your tenant if you require. 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.
On PropertyPA you can track your rental payments to ensure they are paid and not late. 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.