Rent Increase thread

antoinolachtnai

ah. I think you are technically correct if you look at http://www.irishstatutebook.ie/2004/en/act/pub/0027/sec0020.html .

So you might actually be able to increase the rent in 28 days from now, but it is arguable.

Once you give notice of the rent increase before or around beginning of december (allowing 28 days before 1 january) then I don't see any problem with increasing it on January 1.

Am I understanding you correctly?

April 73

This is an interesting question. I reviewed a tenant's rent in Nov 2014, giving 56 days notice of an intended increase to apply from Jan 1st 2015, which was agreed.

So if this rent freeze becomes law & applies to retrospective increases - is the date of review & agreement relevant or just the date the actual increase took place & applied from?

The rent is currently at about 80% of the going rate in the area & I had intended to apply an increase to bring it to about 90% of the going rate from Jan 2016. My tenants are good, the house is well looked after & I have no interest in sqeezing the max possible out of the tenants. I have reduced the rent in the past when rates were falling, I haven't increased the rate as much as the market over the last number of years. If I am stuck until Jan 2017 I will be very significantly behind the market by then.

I cannot see rents being at a similar level to today in 12 months time. I think this rent freeze is going to have the exact opposite effect of its intention in the next 12 or 18 months. Pre-emptive increases now where LLs can raise rents & very significant rises in a year's time for anyone who whose rent freeze ends on Jan 1st 2017.

I suspect we will see the law of unintended consequences apply.

April 73

Rumour & speculation about what rent control would mean has spooked landlords.

Many who were charging below the market rate are worried that they would be handcuffed into a below-market rate for years to come. Some of those LLs are now increasing rents to bring them closer to market rates.
Others who are in a position to apply an increase may have been thinking of increasing by x for the next year. Now that it's two years before the next review they are increasing by x + another bit.
These increases will push up average rates in an area.

I think this rent freeze idea is only going to produce a spike in rents now & another spike in Jan 2017 when rents frozen from Jan 2015 can be increased.

rubberdiddies

April 73 wrote: »

Rumour & speculation about what rent control would mean has spooked landlords.

Many who were charging below the market rate are worried that they would be handcuffed into a below-market rate for years to come. Some of those LLs are now increasing rents to bring them closer to market rates.
Others who are in a position to apply an increase may have been thinking of increasing by x for the next year. Now that it's two years before the next review they are increasing by x + another bit.
These increases will push up average rates in an area.

I think this rent freeze idea is only going to produce a spike in rents now & another spike in Jan 2017 when rents frozen from Jan 2015 can be increased.

I feel this is exactly what will happen. I have been charging approximately 20% below market rate for the last number of years and had planned to keep it roughly the same this year.....due for renewal early December.

But now because I won't be able to increase it again until December 2017 I have sent a letter increasing the rent to slightly under (about 3% under) market value.

I feel Minister Kelly has forced me into this and don't apologise for doing so.

I'm sure many other landlords who were happy to keep below market value will now increase to market value.

I don't think Alan Kelly or his advisors thought this through very well.

I personally don't consider me being a landlord to be a business but of course many do. And so if being treated as a business, why aren't grocery price controls brought in just the same? Not a great example but I'm sure you get what I'm trying to say

guideanna

May i ask where you would find out a "market rate" of your property?
Is it just a case of looking at similar properties in the area on daft etc?

allibastor

guideanna wrote: »

May i ask where you would find out a "market rate" of your property?
Is it just a case of looking at similar properties in the area on daft etc?

Price of similar size and condition properties in your area is a good guess.

then up or down by a figure depending on how much you wish to charge.

catbear

April 73 wrote: »

I think this rent freeze idea is only going to produce a spike in rents now & another spike in Jan 2017 when rents frozen from Jan 2015 can be increased.

I reckon you're right about a rent spike now but by the time we get to 2017 I believe we'll be seeing a swing back in favour of renters. One of the main pushes of rents in the last two years has been investors trying to offload on the house price bounce.
Pain for the renter today but the two year rule will be a boon when the market swings.

allibastor

April 73 wrote: »

This is an interesting question. I reviewed a tenant's rent in Nov 2014, giving 56 days notice of an intended increase to apply from Jan 1st 2015, which was agreed.

So if this rent freeze becomes law & applies to retrospective increases - is the date of review & agreement relevant or just the date the actual increase took place & applied from?

The rent is currently at about 80% of the going rate in the area & I had intended to apply an increase to bring it to about 90% of the going rate from Jan 2016. My tenants are good, the house is well looked after & I have no interest in sqeezing the max possible out of the tenants. I have reduced the rent in the past when rates were falling, I haven't increased the rate as much as the market over the last number of years. If I am stuck until Jan 2017 I will be very significantly behind the market by then.

I cannot see rents being at a similar level to today in 12 months time. I think this rent freeze is going to have the exact opposite effect of its intention in the next 12 or 18 months. Pre-emptive increases now where LLs can raise rents & very significant rises in a year's time for anyone who whose rent freeze ends on Jan 1st 2017.

I suspect we will see the law of unintended consequences apply.

Just to point out as MANY have said here, if you have good tenants and are not at risk of losing money on your property, leave the rent alone. having a good tenant is worth the extra few quid a week.

I had a post going about wanting to become a LL. A conversation I had last night with a friend of mine who rents 2 apartments in Dublin. All I can say is holy crap!! He said one tenant when they left the house knew he wasnt getting his deposit back so drilled holes in the wall with a 2" core drill. He was a direct debit paying worker in a large web based company in Dublin, so not a RA head the ball.

All I can say is I was shocked by his stories.

Dinarius

We have tenants who renewed their lease in September for a second year.

The rent is the same as it was in year one.

Under Kelly's Law, when it comes to renewal time again in September 2016, will we be barred from increasing the rent (because it will be only a year, or so, since he introduced it) or will we be able to increase the rent because they will have had two years at the current price?

Secondly, if they don't renew and move out, will we be able to set the rent for the new tenants at the higher rate?

Thanks.

D.

Butters1979

allibastor wrote: »

Just to point out as MANY have said here, if you have good tenants and are not at risk of losing money on your property, leave the rent alone. having a good tenant is worth the extra few quid a week.

I had a post going about wanting to become a LL. A conversation I had last night with a friend of mine who rents 2 apartments in Dublin. All I can say is holy crap!! He said one tenant when they left the house knew he wasnt getting his deposit back so drilled holes in the wall with a 2" core drill. He was a direct debit paying worker in a large web based company in Dublin, so not a RA head the ball.

All I can say is I was shocked by his stories.

What's this got to do with the OP's question?
He is perfectly within his right to increase rents in line with market rates, and threats about tenants destroying his property should not scare a LL into leaving rents alone.

To OP, from what I can tell, when the new rules kick in , it's form when the last increase took affected (not when it was given notice). But I find it hard to clarify that.

allibastor

Butters1979 wrote: »

What's this got to do with the OP's question?
He is perfectly within his right to increase rents in line with market rates, and threats about tenants destroying his property should not scare a LL into leaving rents alone.

To OP, from what I can tell, when the new rules kick in , it's form when the last increase took affected (not when it was given notice). But I find it hard to clarify that.

It is more advice than anything. I wouldnt really worry about what to increase a rent to if he is covered and has a hassle free tenant.

Butters1979

The law is you cannot increase the rent until two years after the last increase or from the original lease. So come next September it will be 2 years since any increase and therefore you are able to increase the rent.

If they move out the lease is finished and has no affect on any new lease with different people, you can then put the property on the market for whatever price you want.

allibastor

Butters1979 wrote: »

What's this got to do with the OP's question?
He is perfectly within his right to increase rents in line with market rates, and threats about tenants destroying his property should not scare a LL into leaving rents alone.

To OP, from what I can tell, when the new rules kick in , it's form when the last increase took affected (not when it was given notice). But I find it hard to clarify that.

And in asnwer to the OP's question, that is the problem with this new "law" No one actually knows what the situation is, hence why there is a panic in the rental increase.

Dinarius

Butters1979 wrote: »

The law is you cannot increase the rent until two years after the last increase or from the original lease. So come next September it will be 2 years since any increase and therefore you are able to increase the rent.

If they move out the lease is finished and has no affect on any new lease with different people, you can then put the property on the market for whatever price you want.

Makes sense and what I'd hoped.

Many thanks.

D.

allibastor

catbear wrote: »

I reckon you're right about a rent spike now but by the time we get to 2017 I believe we'll be seeing a swing back in favour of renters. One of the main pushes of rents in the last two years has been investors trying to offload on the house price bounce.
Pain for the renter today but the two year rule will be a boon when the market swings.

No, we wont. If the price in an area is increased and people will pay this due to lack of supply. This will become the norm for that area.

In 2017 when rents have been at this norm for a while it will only take 1 or 2 greedy LL to advertise for more rent again and this will push the level to a new higher rate.

Unfortunately for all renters this law will not make it easier for renters. The only thing to do is increase supply of rental accommodation and make it more attractive to be a LL.

Lux23

Because some are greedy profiteering louts. The highest rents in 7 or 8 years yet they are still somehow the victims.

aido79

allibastor wrote: »

No, we wont. If the price in an area is increased and people will pay this due to lack of supply. This will become the norm for that area.

In 2017 when rents have been at this norm for a while it will only take 1 or 2 greedy LL to advertise for more rent again and this will push the level to a new higher rate.

Unfortunately for all renters this law will not make it easier for renters. The only thing to do is increase supply of rental accommodation and make it more attractive to be a LL.

Exactly. Aren't landlords always going to be thinking 2 years ahead every time they rent out a property to a new tenant? More laws to deal with problem tenants who give other tenants a bad name is a better option as it encourages landlords to stay in the market. More landlords = more properties for rent. Landlords leaving the market and selling up = less properties for rent. In the current market with property values not likely to rise to the extent that they did in the past buy to let would be a poor investment compared to other investments so coming up with ways to keep landlords or potential landlords interested should be more important than trying to implement rent controls which have already been proven to be ineffective in the past.

housetypeb

Lux23 wrote: »

Because some are greedy profiteering louts. The highest rents in 7 or 8 years yet they are still somehow the victims.

Landlords are not charities, they are a business. They are entitled,like all business's, to charge as much as the market will bear at any given time.

catbear

allibastor wrote: »

No, we wont. If the price in an area is increased and people will pay this due to lack of supply.

The years of prices drops meant that there was a pent up cohort of buyers with cash who held off. They've reentered and prices increased.
Others see this as a chance to bail out of property sell up too.

If there was real and not just pent up demand then banks would be lending to developers too. They're not.

I'm looking at the same bank owned empty houses in my neighbourhood for years now. House prices have risen but there's no shortage of empty houses for sale, including houses that had been rented out during the bust phase.

whiskeyman

I havent seen this answered anywhere:
Can rents be brought down within the 2 years once locked in?
Is it 'fixed', or just that it can't be reviewed upwards?

April 73

Lux23 wrote: »

Because some are greedy profiteering louts. The highest rents in 7 or 8 years yet they are still somehow the victims.

Without a doubt some are shysters who haven't a clue about tenancy laws.


Most landlords had to lower rents from 2007 to 2013/2014. The market dictates prices & the swing is upward at the moment.

Supply will make a difference to prices but if the two year freeze does apply from the 1st Jan 2015, then Jan 2017 is when new increases will apply & supply will not be massively increased by then.

Landlords have a bad name in Ireland as if everyone would live in a housing utopia if it weren't for greedy profiteering landlords. But not everyone wants to commit to a mortgage or an area to live in forever. Renting suits many people.

The flip side of the two year freeze hasn't been mentioned. What about tenants who sign a new lease at a fixed price when the pendulum swings & rents start to fall. Are they locked in to two year tenancies and fixed rents?

littlevillage

I think its pure madness ... the Government messing about in the private rented sector. Where supply and demand should be the sole arbitrator of the price of rent.

All this is going to do is send the whole market into spasm

catbear

April 73 wrote: »

The flip side of the two year freeze hasn't been mentioned. What about tenants who sign a new lease at a fixed price when the pendulum swings & rents start to fall. Are they locked in to two year tenancies and fixed rents?

That's why landlords should get behind longer leases.
I've been in other markets with different term contracts. One contract when rents were high was 18 months long but in that 18 month period rents dropped.

When renewal came around I switched to a month to month contract, got a rent reduction just to stay.

Now where I am rents aren't dropping but supply of rentals is increasing, it's only a matter of time before rents fall to meet demand.

Selik

Butters1979 wrote: »

What's this got to do with the OP's question?
He is perfectly within his right to increase rents in line with market rates, and threats about tenants destroying his property should not scare a LL into leaving rents alone.

To OP, from what I can tell, when the new rules kick in , it's form when the last increase took affected (not when it was given notice). But I find it hard to clarify that.

So in that case then theoretically as the last actual increase kicked in Jan 2015 then in Jan 2017 I could review again? I would my tenants would be better of locking in the rent now for 2 years rather than reviewing again in just over a year.

Paulw

I am merging all the other threads about the current situation and rent increases.

Lux23

Lux23 wrote: »

Because some are greedy profiteering louts. The highest rents in 7 or 8 years yet they are still somehow the victims.

Imagine, businesses trying to maximize their profits. What an alien concept.

It seems to me that rents will go up and supply will begin to fall. If we want to reduce rents we need more Landlords. Do this by reducing the cost to be a landlord and induce more into the market and then supply will bring price down. My landlord is thinking now he might sell.

pc7

Ive a good tenant a number of years now, never touched the rent as he was no hassle at all. I repaired, replaced and maintained everything he requested.
All the governments messing and talk of rents made me take a look, the rent is 50% below the market rate. I've just done up a notice that I'm increasing it by 20% from the new year, that it will stand at that for two years and that it is fair as it is still leaving it 30% below the market rate.
They should have left well enough alone and I wouldn't have even looked.

pc7

Deleted User wrote: »

My landlord is thinking now he might sell.

Id sell if I could even get close to breaking even, its just a headache, being a landlord is not something I ever wanted to do/be.

murphaph

Lux23 wrote: »

Because some are greedy profiteering louts. The highest rents in 7 or 8 years yet they are still somehow the victims.

Did you keep paying your LL the 2007 rate after the sh!t hit the fan or did you expect your rent to fall as demand for rental properties reduced?