Asking Flatmate for Rent Increase

GusherING

Howdy.

I'm an owner occupier of a 2 bed apartment in D4. I've owned the place about five years and have always had a live in tenant. My current tenant is with me almost three years and our agreeement comes up for renewal next month.

He's been a really good tenant and I like to think he's quite a good friend too - we have lived together for 3 years after all without any real rows/disputes.

All of our agreements have typically lasted twelve months and we have usually agreed he would pay a sum in rent and a flat rate for bills every month. It has worked out about 475 rent and 75 bills per month for the last two years, for what I feel is a decent place in Dublin 4.

I have always offered a pretty good rate for tenants mainly because I'm willing to offer a competitive rent in order to live with someone who is like myself and have an easy life. I still feel this way, though in the last year I have done up the kitchen and my tenant's bathroom to a pretty high standard in the last few months. I didn't increase the rent right after these works were done for two reasons - 1) we were mid contract; 2) I'm sure he had to put up with a bit of incovenience while the builders were in so thought I'd let him see out the agreement on the current terms.

However, with the coming cost of the property tax and a reduction in the amount I actually earn forthcoming ( I am changing career in the autumn and will be on a slightly lower salary than now), I've been doing the maths.

His rent will have to go up about 60e to take account for higher mortgage charges than a few years back and also to contribute to the property tax.

However, I have found the bills for running the house have escalated quite a bit despite regularly ensuring I'm on the best energy tariffs and use the cheapest broadband etc and I've realised I'm subsidising the day-to-day running costs to a much greater extent than when we first agreed the flat bill payment of 75e a month. Is it reasonable for a tenant to pay 180 a month in bills - that's 50/50 with me?

All in all, I'm gonna have to increase his rent and bills from 575 to 710 per month all in. Does this sound reasonable for Dublin 4? Any tips for telling someone their rent is going to jump a lot?!

Thanks for any replies in advance!

MagicMarker

GusherING wrote: »

Howdy.

I'm an owner occupier of a 2 bed apartment in D4. I've owned the place about five years and have always had a live in tenant. My current tenant is with me almost three years and our agreeement comes up for renewal next month.

He's been a really good tenant and I like to think he's quite a good friend too - we have lived together for 3 years after all without any real rows/disputes.

All of our agreements have typically lasted twelve months and we have usually agreed he would pay a sum in rent and a flat rate for bills every month. It has worked out about 475 rent and 75 bills per month for the last two years, for what I feel is a decent place in Dublin 4.

I have always offered a pretty good rate for tenants mainly because I'm willing to offer a competitive rent in order to live with someone who is like myself and have an easy life. I still feel this way, though in the last year I have done up the kitchen and my tenant's bathroom to a pretty high standard in the last few months. I didn't increase the rent right after these works were done for two reasons - 1) we were mid contract; 2) I'm sure he had to put up with a bit of incovenience while the builders were in so thought I'd let him see out the agreement on the current terms.

However, with the coming cost of the property tax and a reduction in the amount I actually earn forthcoming ( I am changing career in the autumn and will be on a slightly lower salary than now), I've been doing the maths.

His rent will have to go up about 60e to take account for higher mortgage charges than a few years back and also to contribute to the property tax.

However, I have found the bills for running the house have escalated quite a bit despite regularly ensuring I'm on the best energy tariffs and use the cheapest broadband etc and I've realised I'm subsidising the day-to-day running costs to a much greater extent than when we first agreed the flat bill payment of 75e a month. Is it reasonable for a tenant to pay 180 a month in bills - that's 50/50 with me?

All in all, I'm gonna have to increase his rent and bills from 575 to 710 per month all in. Does this sound reasonable for Dublin 4? Any tips for telling someone their rent is going to jump a lot?!

Thanks for any replies in advance!

Look on daft for other similar properties in the area, what are they charging?

€180 per MONTH in bills alone? That sounds pretty excessive tbh.

Trhiggy83

Be careful what you wish for here as everyone is on a tight budget the way things are and if you think you need to increase the rent that's your prerogative but renting is a very competitive market at the minute and it sounds like you found someone who you can live with.

Secondly in relation to the property tax, you should be passing this onto the other tenant fairly. 50/50 is reasonable to cover the property tax.

I know of a situation where the property tax was being used as an excuse to increase the rent but the increase actually paid the landlords property tax twice over. Be sure you can logically explain the increases or your housemate might think you are looking to cash in and you may also lose a friend.

testicle

If it were me, I'd tell you to go stuff yourself on the property tax, it's your responsibility not theirs.

wexie

GusherING wrote: »

However, with the coming cost of the property tax and a reduction in the amount I actually earn forthcoming ( I am changing career in the autumn and will be on a slightly lower salary than now), I've been doing the maths.
!

You sound like a reasonable enough guy, but....if I was your roommate, friend or not, I wouldn't really accept that as a reason why MY rent would have to go up.

135e a month is quite an increase. I'd be happy to re-asses the bills and go halves on them, even pay half the property tax, although I don't believe tenants really need or should do this. However it'd stop at that.

Hope you manage to work it out, would be a shame to loose a friend, people that you can live with without major drama aren't easy to come by.

smellslikeshoes

It really comes down to if the extra money is worth the possibility that you will have to find a new tenant.

Have you a breakdown of where that 360 euro in bills is actually going? It seems astronomical for a 2 bed flat.

camel jockey

He currently pays 550 not 575. So you want to increase the total from 550 that to 715 - that's a 30% increase!

I hope you plan to give a better breakdown of the 180 in bills than you did above. I'm curious to know what else you are including in there such as insurance, service charges etc.

NinjaTruncs

How are you coming up with 360 in total bills that seems crazy high, are you including maintenance fees in you bills, as the above poster said you will need to furnish a better breakdown for your lodger than you have provided to us.

moc moc a moc

GusherING wrote: »

180 a month in bills - that's 50/50 with me?

Check your calculations - there's something wrong here.

Tigger

30% lol

Expect to need a new tenant soon

the_syco

GusherING wrote: »

Is it reasonable for a tenant to pay 180 a month in bills - that's 50/50 with me?

Sounds like the tenant has an electric heater?

=-=

Next tenant do bills and rent separately, as it sounds like the current one has an electric heater on full whack, knowing that they won't be charged extra for it.

GrumPy

GusherING wrote: »

Does this sound reasonable for Dublin 4?

No. You're missing something crucial here - What's important is that the accommodation is worth the cost, based on several factors. I understand your situation, but you cannot expect him to even consider this price hike.

GusherING wrote: »

Any tips for telling someone their rent is going to jump a lot?!

Yeah, make sure you have a replacement lined up for when he rejects the offer and moves out.
Sorry to be blunt, but my just two cents. I'm sure you are both good people and hopefully can work something out, I echo a previous posters comments - good, reasonable & friendly folk to share living space with, are not easy to find!

valleyoftheunos

If you are talking about a 30% increase either you are significantly undercharging now or will be significantly overcharging with the increase, either way you can expect him to balk at the increase and probably leave.

Think of it this way, you likely wouldn't tolerate a 15% increase from any of your service providers and would go elsewhere, its likely any tenant would do the same should the rent increase by that amount let alone double that.

Tar.Aldarion

180 in bills, what. Why have a flat rate, why not just split the bills and have a bit of a rent increase?

JustAThought

E475 rent is v reasonable - I'm assuming it's a double ; maybe ensure?
The bills is where you can gain without making an enemy of your friend ! I don't think you can charge him/her for the tax without really alienating them, but can you do a breakdown of the bills & see what the costs are. E75 -is that per month or per bill cycle . Broadband, phone (?), landline, tV, lx, gas, bins tags, bin annual charges.

I'm sure if you add them up you may find you are subsidising him to an eye-watering degree.

If s/he see this & realises the costs of moving elsewhere & paying the full whack ocriss all bills they might accept a rise quicker.

Problem is ; & I'd do my local research before I proposed it, many people are feeling the pinch and are prepared to undercut and include sll bills to get any money in .

You don't want to find yourself with someone you can't stand, or who is problematic or unreliable or who smokes or wants to move in their other half... Just for e40 or so extra a month..

Look to evaluate & share bills 50:50 - but do your local area price /sharing research first!!!

The_Morrigan

OP, I'm an owner occupier and I have a two bed apt outside the city and I charge my tenant a flat rate of 360 a month - notwithstanding the location difference in pricing, how can you justify that amount in utilities?

I have all the mod cons and my bills are never more than 180 a month - that is utilities only - UPC, Gas, Electric. You cannot expect your tenant to pay towards property tax, management fees, insurance costs etc - it is not something they should incur.

What exactly is the breakdown of your bills per month that you are arriving at this figure?

djimi

Whatever way you paint it, if you up a tenants (/licensees) rent by nearly 30% from €550 to €710 a month I dont see any way that you wont find yourself looking for a new tenant.

Marcin_diy

I'd say that money is only one of few factors. Is it worth for you to get rid of a tenant who lives with you for 3 years? Can you easily find new tenant?
Can you find a tenant that will not play against you, or empty your house, but can find somebody who will be like your friend?


If I was told about 30% increase I would move out.

Ps.
It is not teenant fault that you will be earning less, so I don't see a point for sharing this information with us.

valleyoftheunos

In fairness the purpose of private Landlords such as the OP isn't to provide housing, it is to make a profit. If the Landlord's costs go up (and that includes property tax, service charges, Mortgage interest etc) its entirely fair enough that the rent increase as well (when not otherwise contracted of course). If there is no profit the Landlord cannot provide the housing and why would they.

Of course the flip side of that is that the Tenant is under no obligation to stay and pay the increased rent. As I have said, for the increase proposed I would expect the tenant to walk so it depends how much the OP wants to retain his tenant as opposed to how much he needs to increase the rent.

Balmed Out

valleyoftheunos wrote: »

In fairness the purpose of private Landlords such as the OP isn't to provide housing, it is to make a profit. If the Landlord's costs go up (and that includes property tax, service charges, Mortgage interest etc) its entirely fair enough that the rent increase as well (when not otherwise contracted of course). If there is no profit the Landlord cannot provide the housing and why would they.

Of course the flip side of that is that the Tenant is under no obligation to stay and pay the increased rent. As I have said, for the increase proposed I would expect the tenant to walk so it depends how much the OP wants to retain his tenant as opposed to how much he needs to increase the rent.

He is a live in landlord. The purpose of that is to reduce his costs. Renting with the owner living there is a no no for many and I would expect the cost to be less then the market rate.

ProudDUB

If the monthly household bills (broadband, bins, electricity etc etc ) have gone up, I don't think it unfair to expect your tenant to pay his fair share, even if it means he has to pay more per month. I'd sit him down, show him the current bills over the past years and show him where the costs are going up and why he now has to pay more. Invite him to give input on where you could save money. For example, he may know of a friend of a friend who got a kick ass deal at UPC that you have to know about to get. Or he may suggest not having the immersion come on for as long as it does in the morning, as he showers at the gym instead.

If he is a friend that you like, and a tenant that you respect and want to keep, I think that he is deserving of of that courtesy, instead of telling him the rent is going up and he has to like it or lump it. He may even know of good ways to save money. Even if he doesn't, surely a rational adult can grasp the fact that the prices of things don't remain the same forever.

On renovating the rooms, no one made you do all that. That was your decision. It's not fair to now pass the expense of it on to him. If you had told him back when you were having it done, that you may have to increase the rent to recoup your expenses, that would have been wise. To just dump that decision in his lap now seems a bit unfair. If your own earning situation has changed, its also not unfair to expect your tenant to make it up in rent. Look at it the other way around. If he was earning less, would it fair of him to expect you to give him a reduction in his rent? This is the same thing.

It's up to you, there is no black and white answer to what you should do, but how you approach it and him could make a world of a difference. Most rational people would understand rent going up if their landlord had additional unavoidable expenses that are specifically related to the house, AND were not of their own making, such as the property tax & utility bills going up. They may not like it, but they'd understand without getting the hump. But when you add in the other stuff, and it is a friend you are dealing with, the odds of you getting what you want, and being able to maintain the friendship are lessened considerably imo. If it were me, I'd keep all landlord and tenant relationships on a strictly business footing in future. It removes a lot of the grey areas like these.

The_Morrigan

ProudDUB wrote: »

...Most rational people would understand rent going up if their landlord had additional unavoidable expenses that are specifically related to the house, AND were not of their own making, such as the property tax & utility bills going up. They may not like it, but they'd understand without getting the hump...

Property tax is not the responsibilty of any tenant or lodger - it's wholly unfair to pass this cost onto them. Utility bills yes, but not all costs associated with owning a property should be included in the rent/bills owed.

djimi

The_Morrigan wrote: »

Property tax is not the responsibilty of any tenant or lodger - it's wholly unfair to pass this cost onto them. Utility bills yes, but not all costs associated with owning a property should be included in the rent/bills owed.

Im not really sure why property tax wouldnt be the responsibility of the tenant/lodger tbh. If the tenant was renting the property in its entirety they would end up paying the property tax, so why wouldnt a lodger expect their rent to increase somewhat to cover a portion of the tax?

The_Morrigan

djimi wrote: »

Im not really sure why property tax wouldnt be the responsibility of the tenant/lodger tbh. If the tenant was renting the property in its entirety they would end up paying the property tax, so why wouldnt a lodger expect their rent to increase somewhat to cover a portion of the tax?

because it's a tax for the owner of the property not anyone else.

djimi

The_Morrigan wrote: »

because it's a tax for the owner of the property not anyone else.

Its a property tax; a property in which the tenant/lodger is living. Its not like the landlord is asking the tenant/lodger to cover an increase in their PRSI charges. I think its naive in the extreme to think that a charge like that will be enforced on a property and that those who are renting the property, be it in its entirety or as a lodger, will not end up paying all or at least some of that charge.

The_Morrigan

djimi wrote: »

Its a property tax; a property in which the tenant/lodger is living. Its not like the landlord is asking the tenant/lodger to cover an increase in their PRSI charges. I think its naive in the extreme to think that a charge like that will be enforced on a property and that those who are renting the property, be it in its entirety or as a lodger, will not end up paying all or at least some of that charge.

Well I haven't pushed it onto my lodger - naive maybe, but I have always held the belief when I was renting that rent should be market rate, not market rate plus whatever the landlord can skim off the top to pay off their landlord expenses.
The revenue are not looking for the residents of any of the properties, they are seeking the owners to pay. I have no intention on pushing my tax obligations on any lodger that resides in my house.

valleyoftheunos

The_Morrigan wrote: »

Property tax is not the responsibilty of any tenant or lodger - it's wholly unfair to pass this cost onto them. Utility bills yes, but not all costs associated with owning a property should be included in the rent/bills owed.

It is a cost to the Owner so when it comes time to review the rent there is no reason why it ought not be factored in the new rent. an increase in the landlord's insurance would be exactly the same.

Not pushed onto tenants but included as a cost in the provision of the housing when agreeing and setting rents.

Pawwed Rig

Property tax is a red herring.

What the OP should be doing is looking at the rent price for a similar room locally and pricing as appropriate recognising the fact that an owner occupier situation is different from a standard lease arrangement. I would say look at the market rent and reduce by 10%.
The flat rate bill idea is not a good idea. You should split the utility bills evenly with the tenant.
If the market warrants a 30% increase then go for it.

valleyoftheunos

Balmed Out wrote: »

He is a live in landlord. The purpose of that is to reduce his costs. Renting with the owner living there is a no no for many and I would expect the cost to be less then the market rate.

If its a no no for someone then they don't have to live there, I don't think you're entitled to a reduction for it. Whether a live in land lord gives you one as an inducement is another thing.

djimi

The_Morrigan wrote: »

Well I haven't pushed it onto my lodger - naive maybe, but I have always held the belief when I was renting that rent should be market rate, not market rate plus whatever the landlord can skim off the top to pay off their landlord expenses.
The revenue are not looking for the residents of any of the properties, they are seeking the owners to pay. I have no intention on pushing my tax obligations on any lodger that resides in my house.

More power to you, but you will be in the minority. Market rate is not a set number; you could add probably €50 a month to rents to cover a €600 property tax bill and still fall within market rate. Also, its quite likely that rents will rise across the board as landlords pass this cost onto tenants.

I say all of this as a tenant, and Im just being realistic about it. You can say that the charge belongs to the landlord all you want; the reality is the cost of renting the property has gone up for the landlord and there is no way that the majority are not going to try and push that cost onto their tenants. In this case, where the tenant is actually a lodger, they would obviously not expect to pay the entire charge, but they live in a property that now has another cost associated with it, and that cost will be taken into account when calculating the rent amount.

The_Morrigan

Pawwed Rig wrote: »

Property tax is a red herring.

What the OP should be doing is looking at the rent price for a similar room locally and pricing as appropriate recognising the fact that an owner occupier situation is different from a standard lease arrangement. I would say look at the market rent and reduce by 10%.
The flat rate bill idea is not a good idea. You should split the utility bills evenly with the tenant.
If the market warrants a 30% increase then go for it.

Paww that makes it a b*tch to declare on your tax returns if you don't have a fixed sum every month.