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Should I increase the rent?

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    #32
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    Michael D Not Higgins wrote: »
    How do PPR mortgages affect rental market rates? Where do all the people who had their homes repossessed live and how does that affect the market rate? How is it stealing if they still owe the debt?

    There are an enormous amount of people in 1 and 2br apartments who are refusing to pay their mortgage. They are stealing from the banks because they are withholding payments to them and that costs the banks money.

    Once these people are removed, then their old places can be put on the rental market. Sure, those people will need to go rent somewhere, but at least it will get the market moving. Many of those people will rent further away or go live with parents as they will be committed to paying debts so will likely not be able to afford rent.

    To stay on topic, I would suggest being very careful not to increase the rent to the current skewed market rate.


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    #33
    Bepolite
    Closed Accounts Posts: 2,737 ✭✭✭Bepolite


    lima wrote: »
    To stay on topic, I would suggest being very careful not to increase the rent to the current skewed market rate.

    Why?

    OP You've had some good suggestions here. Sit down and discuss it with your tenants. At the end of the day though this is a business and you should charge around the market rate minus an amount you feel its worth to keep good tenants.

    If in the future rents go down hopefully the tenants will feel you're approachable and do the same thing with you and you'll be in a position to reduce the rent.


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    #34
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    Bepolite wrote: »
    Why?

    OP You've had some good suggestions here. Sit down and discuss it with your tenants. At the end of the day though this is a business and you should charge around the market rate minus an amount you feel its worth to keep good tenants.

    If in the future rents go down hopefully the tenants will feel you're approachable and do the same thing with you and you'll be in a position to reduce the rent.

    Because you will cause resentment in your customers. The current skewed market is extremely volatile and this may expose the landlord as a 'chancer' and as such if/when the rental market reaches normal market levels (or worse, lower) then they will try chancing him/her.

    Personally, I rent (I can well afford to buy but I choose not to commit myself to the Irish economy at these extreme property price levels for personal reasons) and if my landlord put the price up by over 1k per year, I would move out of spite, even if I had to pay more rent. The world doesn't like chancers so I'm probably not the only one who'd do this.


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    #35
    mauraf
    Registered Users Posts: 191 ✭✭mauraf


    OP here - Getting some really great feedback here,All - thanks alot!

    I dont want to be unfair to the tenants to be honest - in spite of the current rental rates being 1200-1300, there is no way my conscience would allow me to attempt to hike to that level from 850....they are good tenants, mind the place - and I would like to keep them there..

    I would be very happy to settle for 1000 per month - still a good chunk under the market rate - still wouldnt cover my mortgage on the place - but thats my problem - not theirs.

    I dont think they will be overly surprised I approach them re a rent increase - but I still plan on giving them a good deal - if its a major issue for them to support the hike - I may just leave be....dont want anyone homeless on my conscience!

    Thanks again All - opened up alot of valid and interesting points to give me ideas!
    Maura


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    #36
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    lima wrote: »
    Because you will cause resentment in your customers. The current skewed market is extremely volatile and this may expose the landlord as a 'chancer' and as such if/when the rental market reaches normal market levels (or worse, lower) then they will try chancing him/her.

    Personally, I rent (I can well afford to buy but I choose not to commit myself to the Irish economy at these extreme property price levels for personal reasons) and if my landlord put the price up by over 1k per year, I would move out of spite, even if I had to pay more rent. The world doesn't like chancers so I'm probably not the only one who'd do this.

    The renters are more likely to get the full decrease to market rate, especially if they plead their case to the PRTB. The difference being they can walk to another place and get the market rate whereas in that situation it may be harder to fill the property. In the current market, the property could be empty for a few weeks (for minor repairs, showing the property, etc.) so let's say a month.

    1200/month for 11 months amounts to 13.2k.
    At 1000/month for 12 months it's 12k.
    Clearly the landlord is better off pushing for higher than 1000/month, in fact 1100 is the break even point. This keeps the tenants in place and nets the same as getting new tenants for 1200/month (ignoring costs for reletting).

    When you analyse it as a business decision, there's no hard feelings, no sob stories. The fact is that there are people willing to pay the so-called skewed market rate, so that's what the decision should be based off. Now, this landlord wants to be fair to their tenants, so a discount on market rate (or even their break even rate) would be around the 1000-1050 mark.

    Also, 1k a year is just over 80 a month. Are you saying if your rent went from 1000/month to 1100/month you'd spite them and move to a market rate rental at 1200/month? That clearly makes no sense for anyone involved.

    OP, try to get 1050/month, you make 2.4k more a year, they pay 1.8k less than market rate and everyone's happy.


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    #37
    Tar.Aldarion
    Moderators, Science, Health & Environment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 60,097 Mod ✭✭✭✭Tar.Aldarion


    mauraf wrote: »
    OP here - Getting some really great feedback here,All - thanks alot!

    I dont want to be unfair to the tenants to be honest - in spite of the current rental rates being 1200-1300, there is no way my conscience would allow me to attempt to hike to that level from 850....they are good tenants, mind the place - and I would like to keep them there..

    I would be very happy to settle for 1000 per month - still a good chunk under the market rate - still wouldnt cover my mortgage on the place - but thats my problem - not theirs.

    I dont think they will be overly surprised I approach them re a rent increase - but I still plan on giving them a good deal - if its a major issue for them to support the hike - I may just leave be....dont want anyone homeless on my conscience!

    Thanks again All - opened up alot of valid and interesting points to give me ideas!
    Maura

    That is a good view to take, good luck. You can't just look at market rate if you have good tenants (and believe me there are a lot of bad tenants that just wreck a place and leave). A hike to market rent is a way to get people to just flat out leave, incremental is the way to go. Luckily my landlord thinks the same.


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    #38
    The Spider
    Registered Users Posts: 1,273 ✭✭✭The Spider


    We had good tenants and left them to it, but the rent was more than you have at the moment. When they moved out we pushed up the rent quite a bit, had no problem getting a tenant.

    Bit of advice if they do decide to move out, and how to avoid a period with no tenants, stay onside with them, sounds like you get on and arrange viewing before they move, our tenants had no problem with this.

    Arrange to have a painter in the weekend before the new tenants move in, works wonders.

    Do this and it'll be seamless.


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    #39
    kingtut
    Registered Users Posts: 6,487 ✭✭✭kingtut


    The Spider wrote: »
    We had good tenants and left them to it, but the rent was more than you have at the moment. When they moved out we pushed up the rent quite a bit, had no problem getting a tenant.

    Good observation, I'd imagine it's easier to get a new tenant to pay whatever you like than trying to get an existing tenant to pay more.


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    #40
    TimeToShine
    Registered Users Posts: 4,881 ✭✭✭TimeToShine


    The Spider wrote: »
    We had good tenants and left them to it, but the rent was more than you have at the moment. When they moved out we pushed up the rent quite a bit, had no problem getting a tenant.

    Bit of advice if they do decide to move out, and how to avoid a period with no tenants, stay onside with them, sounds like you get on and arrange viewing before they move, our tenants had no problem with this.

    Arrange to have a painter in the weekend before the new tenants move in, works wonders.

    Do this and it'll be seamless.

    All good advice but to be honest I'd be absolutely shocked if the current tenants left.


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    #41
    kingtut
    Registered Users Posts: 6,487 ✭✭✭kingtut


    TimeToShine wrote: »
    All good advice but to be honest I'd be absolutely shocked if the current tenants left.

    Probably depends on a lot of factors, are they close to their current work places, do they have cars, can they get a similar property in the area for their current price etc ...

    If they were to move but end up spending what they might save on rent on petrol / transport costs etc then naturally it makes sense to stay put ... at the end of the day I don't think anyone wants less money in their back pocket :D


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    #42
    wd42
    Registered Users Posts: 13 ✭wd42


    OP

    We are tenants in our current house. Landlord tried to increase rent back in March by €200. We didn't agree to the increase or any increase. Organized a meeting with the bank within 2 days of the text from the LL about a new mortgage and receive the keys to our new house tomorrow :-)

    I'll be ringing LL tomorrow to give notice.

    Please note that we also have an apartment that we rent out to a young couple and not once did I consider raising the rent as the original rent was fair and they look after the place.

    tbh you seem to be fair enough and not just looking for a quick buck but the current "market" is not realistic and upping the rent might come back and bite you on the ....


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    #43
    zef
    Closed Accounts Posts: 947 ✭✭✭zef


    A house facing mine was put up for rent in February for €1350. In April tenants moved I for 3 weeks and didn't leave it as they found it, they had to get a skip when they left. 3 bed semi d, D 15.
    So in May they put it back up at €1300. It was only taken off daft this week. So they lost up to 5 months rent and refurb costs.
    You sound like a decent and fair ll and your tenants sound the same. I think peace of mind is worth more than 1 or 2k per year.


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    #44
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    wd42 wrote: »
    OP

    We are tenants in our current house. Landlord tried to increase rent back in March by €200. We didn't agree to the increase or any increase. Organized a meeting with the bank within 2 days of the text from the LL about a new mortgage and receive the keys to our new house tomorrow :-)

    Did you go through the PRTB process?


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    #45
    wd42
    Registered Users Posts: 13 ✭wd42


    Michael D Not Higgins wrote: »
    Did you go through the PRTB process?

    Why would I go through a PRTB process?? Because I refused to pay a rent increase?? Under no circumstances would I have paid any more. I wasn't going to sit on the property either and went straight to the bank to organize a mortgage and LL can now charge the next tenants whatever he wants.


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    #46
    drumswan
    Closed Accounts Posts: 2,592 ✭✭✭drumswan


    wd42 wrote: »
    I find the constant talk of renting as a "business" very disheartening, it's a very cold way of looking at someones home. With all the crap that has gone on in this country over the last few years it's sickening to see vultures trying to grab more money just for the sake of it.

    Are you serious? Of course its a business, what else would it be?

    OP, charge the market rent.


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    #47
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    wd42 wrote: »
    Why would I go through a PRTB process?? Because I refused to pay a rent increase?? Under no circumstances would I have paid any more. I wasn't going to sit on the property either and went straight to the bank to organize a mortgage and LL can now charge the next tenants whatever he wants.

    Because had the landlord known the law, the tenant can only dispute the increase through the PRTB. Had you just said no and kept paying the old rate (as it seems you have), they are within their rights to issue you notice of arrears for unpaid rent (14 days), then a notice of termination (28 days).

    In other words you could have been out on the street within a couple of months of not paying the increase, long before your mortgage came through on the house.


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    #48
    shalalala
    Closed Accounts Posts: 1,710 ✭✭✭shalalala


    My landlord could get a lot more for where I am but his thinking is that he likes the tenants and he wants to keep us. If he raised the rent even a little I would be forced to find elsewhere. OP I would discuss it with them.

    The problem is, they could have had pay decreases while the rents have gone up. Although this isn't specifically your problem, it could mean losing good tenants


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    #49
    ted1
    Registered Users Posts: 23,535 ✭✭✭✭ted1


    OP , charge the market rate


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    #50
    CIARAN_BOYLE
    Registered Users Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    In my opinion a settled tennant that you trust is probably worth somewhere between a month and a month and a half a year in rent.

    So if market rent is 1200 a month (14,400) a year then you should be looking at 1800 a year less or 1050 a month


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    #51
    wd42
    Registered Users Posts: 13 ✭wd42


    Michael D Not Higgins wrote: »
    Because had the landlord known the law, the tenant can only dispute the increase through the PRTB. Had you just said no and kept paying the old rate (as it seems you have), they are within their rights to issue you notice of arrears for unpaid rent (14 days), then a notice of termination (28 days).

    In other words you could have been out on the street within a couple of months of not paying the increase, long before your mortgage came through on the house.

    Are you for real?? Who exactly would have come to the house and put us out on the "street", the Guards?? You're having a laugh!

    A family with 3 children with not one missed rent payment put out on the street! If I'd wanted I could have dragged it on for years through the PRTB, local T.D.'s the courts etc..

    Unfortunately not enough people renting will just say NO to a rent increase


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    #52
    The_Morrigan
    Registered Users Posts: 9,368 ✭✭✭The_Morrigan


    wd42 wrote: »
    Are you for real?? Who exactly would have come to the house and put us out on the "street", the Guards?? You're having a laugh!

    A family with 3 children with not one missed rent payment put out on the street! If I'd wanted I could have dragged it on for years through the PRTB, local T.D.'s the courts etc..

    Unfortunately not enough people renting will just say NO to a rent increase

    Could you take this to pm please, it is not relevant to the OP's query.


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    #53
    Dredd_J
    Registered Users Posts: 202 ✭✭Dredd_J


    Theres a thread on irish landlords where they are saying that you are doing yourself no favours by not charging the market rent.

    Things like add it up over a year and see what you are losing out on.

    Saying that if you gathered that €1200 or so at the end of the year and set fire to it, its the same thing as letting the tenants off the market rent.

    Or you could replace the flooring in a year for that, or new furniture etc.

    Or have your mortgage paid off 5 years early or whatever the overpayments would work out at for you.

    Or that if you increase it to the market rent you can afford to just hand the whole thing off to an agent and never have to worry about dealing with tenants again. It think it cost about 5% after all is done and dusted to do this.

    All sound like good arguments, unless you are the one renting :)


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    #54
    Tar.Aldarion
    Moderators, Science, Health & Environment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 60,097 Mod ✭✭✭✭Tar.Aldarion


    Countered by people living in a place for years with no trouble and likely to continue doing so if it is increased in two increments and chances of vacant apartment/bad tenants. I'd probably value a good tenants at something like 2 months rent and increase the rent to market rate over 2 increments, increasing it to market rent in a year or more. You have to take in the difference in what it is now and market rate if you want to keep the tenants.


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    #55
    mauraf
    Registered Users Posts: 191 ✭✭mauraf


    Hi
    OP here - I know alot of people had opinions and good advice when it came to my original post re whether or what I should increase the rent on my rented property to...
    Current rent 850e for a large 2 bed - in an area that now commands (as per myhome.ie) 1200e per month for a similar size dwelling. Decided on a modest increase of 50e per month....which the tenants agreed to...Anything more, and I think I may have forced them to leave an area which is close to their places of work...
    Figured it was better all round, to have tenants who respect your property & respect you as a landlord....
    Thanks for all the advice given on this earlier
    Maura


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    #56
    Santa Cruz
    Banned (with Prison Access) Posts: 3,126 ✭✭✭Santa Cruz


    mauraf wrote: »
    Hi
    OP here - I know alot of people had opinions and good advice when it came to my original post re whether or what I should increase the rent on my rented property to...
    Current rent 850e for a large 2 bed - in an area that now commands (as per myhome.ie) 1200e per month for a similar size dwelling. Decided on a modest increase of 50e per month....which the tenants agreed to...Anything more, and I think I may have forced them to leave an area which is close to their places of work...
    Figured it was better all round, to have tenants who respect your property & respect you as a landlord....
    Thanks for all the advice given on this earlier
    Maura

    Often too when you change tenants and increase the rent you will incur refurbishment costs, maybe a missed month and get landed with tenants who
    act the thug in your property.A little bit of flexibility on each part and not being greedy is the best approach


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    #57
    Tiger Mcilroy
    Registered Users Posts: 1,562 ✭✭✭Tiger Mcilroy


    Santa Cruz wrote: »
    Often too when you change tenants and increase the rent you will incur refurbishment costs, maybe a missed month and get landed with tenants who
    act the thug in your property.A little bit of flexibility on each part and not being greedy is the best approach

    I was in a similar situation with our apartment and decided to raise the rent to somewhere in between the current rate and the market. The tenants took some time to look around and realised we were being fair with them and could have asked for an extra 150 per month so they decided to stay.

    Its common sense that landlords should seek to maximise the rent but a bit of give and take goes a long way.


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    #58
    shalalala
    Closed Accounts Posts: 1,710 ✭✭✭shalalala


    Op I think you did the fair and clever thing! Glad it worked out well


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    #59
    Gael23
    Registered Users Posts: 12,113 ✭✭✭✭Gael23


    Yes you have done a fair and correct thing. You sound like a fair and reasonable landlord and as a result you have tenants that respect you and more importantly, you property.


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    #60
    Alicano
    Registered Users Posts: 444 ✭✭Alicano


    Wow OP! If that works for you then well done and fair play for being so reasonable. I doubt any of us watching or advising would have expected that outcome?
    We move back in with my parents next week after 8 years renting due to increases. In our current place just under 5 years. Have it like a museum! Even nicer than how we received it. Sent LL maybe 5 emails and 5 texts over the whole duration. Rent was 1100 at first. Dropped to 1000 for the next year. Then back to 1100 for 2 years and new asking was 1300. Which has us out. How I wish you were our LL!
    My point. Well done for covering your costs, being fair and going against the trend of greed.


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    #61
    quadrifoglio verde
    Registered Users Posts: 3,670 ✭✭✭quadrifoglio verde


    Alicano wrote: »
    Wow OP! If that works for you then well done and fair play for being so reasonable. I doubt any of us watching or advising would have expected that outcome?
    We move back in with my parents next week after 8 years renting due to increases. In our current place just under 5 years. Have it like a museum! Even nicer than how we received it. Sent LL maybe 5 emails and 5 texts over the whole duration. Rent was 1100 at first. Dropped to 1000 for the next year. Then back to 1100 for 2 years and new asking was 1300. Which has us out. How I wish you were our LL!
    My point. Well done for covering your costs, being fair and going against the trend of greed.

    And could it not be argued that you were greedy looking for the reduction for 3 years.
    Or just the fact that you took advantage of the market then and your landlord is taking the advantage of the market now.
    Also I'd be surprised if the property hasn't risen by more than 300 in asking in the last 3 years.


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