Renting my House out to Council

JohnnyTodd

Hi all,

I'm leaving the country permanently in April next year. I had some discussions with bank and due to negative equity (approx 50k)the bank will not let me sell my house.

I have told them that if I dont relocate I will lose my job and won't be able to meet my mortgage commitments. I even asked to take on a 50k personal loan if i could sell the house.

I do have another property which is not in negative equity but probably not gained any value. That I intend to keep.

So my only option it appears is to rent. The other alternative someone told me today was to rent house to council. I know I have to agree to let for 10 years but that sounds great.

Has anyone any experience of this? Surely its not that simple?

I dont mind renting, but I wont be able to fly home often if theres problems with house, tenents moving out, etc

Any advice I would really be grateful. I know people who just left without any agreement with bank but I know that will come back to bite them in the arse.

One other point is I have a property secured in new location so while I would rather keep my credit intact I will if necesary be prepared to damage it.

TouchingVirus

JohnnyTodd wrote: »

I dont mind renting, but I wont be able to fly home often if theres problems with house, tenents moving out, etc

It's called the Rental Accommodation Scheme and the main benefit is that it's pretty much guaranteed rent. The downside is that you're still responsible for maintenance however you could engage a property manager like my current landlord has done. The property manager takes care of everything maintenance wise and drops the landlord emails when stuff arises (e.g. stuff that'll cost the landlord money like a broken boiler or something).

There are usually minimum terms for agreements, for instance Dublin City council only makes agreements of 4 years or more -
http://www.dublincity.ie/Housing/RAS/Pages/HowRASWorks.aspx

JohnnyTodd

mikemac1 wrote: »

Not sure where you heard that number, I heard four years

Approach your council and ask about RAS scheme
Here is a link:
http://www.environ.ie/en/DevelopmentHousing/Housing/SocialHousingSupport/RentalAccomodationScheme/

Now you will be inspected and you may have to upgrade, sturdy doors and windows, smoke alarms and other issues.

You and the council work out a rent so get your negotiating hat on.
Haggle like a cattle dealer

The council selects the tenant

Now while there are long waiting lists, the councils are also broke so it'll possible you'll get turned down.
But approach them anyway and see how you get on

Seemingly they are looking out. Advertising at the moment. House should be ok. Its only 2 years old. Alarmed, smoke alarms in kitchen, and both living rooms, hall and landing. We did lots to it also when we moved in. Nice big back garden too which I busted my ass doing!

JohnnyTodd

Yes I think I will do it on Monday. Was hoping maybe some landlords could share their experiences for me. Pros and Cons to this versus renting directly

the_syco

You don't get to pick who lives there. Not sure if you can kick people out, but I doubt it.

NIMAN

I always thought that if you got into RAS then the Council looked after any maintenance?

I thought they paid the money into your account and you had no dealings with them until the lease was up. You didn't know the tenants or ever got to meet/choose them. It was basically the councils house.

There's RAS and then there are other, slightly different Leasing Arrangements.

Though the details vary a bit from Local Authority to Local Authority, with RAS you'd likely be looking at something like a 4 year lease where the Council nominates tenants, you retain all landlord reponsibilities- if the tenant leaves you still get paid, but will have to get the place ready again etc (though you can claim above normal wear-and-tear costs up to a month's rent back from the council). They'll negotiate a reduction from market rent based on guaranteed rent, tho it's debatable if the lack of say over tenants and the retained responsibilities don't cancel that out tbph. (I should note that you also retain normal landlord rights under the act to issue warnings and serve notice if the upkeep of the property or tenant behaviour merit it)

The Long-term leasing is a different matter- in return for a *significantly* reduced level of rent you hand the property over for c.10 years, with the council in charge of maintenance etc- in ten years the property must be returned to you in the condition it was handed over, less fair wear-and-tear.

Not all authorities are running the latter option, though they should all be compiling lists of available properties, as far as I know.

Obviously, depending on the levels of rent available under each option you might find one or the other a better fit for what you're seeking.

Note that if you're moving abroad, you'll be hit with an upfront tax of 20% on the rent that you then have to chase up with revenue- no idea if this is writeable against expenses like maintenance, mortgage or other costs, sorry- This may or may not be avoidable by the nomination of an Irish-based agent to receive payment on your behalf- which may make it as well to do this to look after the property if considering the first option.

There are a few other variable under RAS, so be sure to make sure they are talking about the guaranteed-payment contract where voids are covered, if discussing this with your council.