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Cash or bank for rent for future loan applications?

  • 24-11-2016 11:26am
    #1
    cormie
    Registered Users, Registered Users 2 Posts: 20,836 ✭✭✭✭


    Hey folks,
    My friend is considering renting out 2 rooms with an expected annual additional income of around €8,500, so well below the €14,000 tax free band for the rent a room scheme.

    They were saying it would be better to get the money in cash so then it looks like they are still well capable of managing their money, paying mortgage and all the rest with their work salary and can still save X amount per month so lenders would look more favourably on it.

    I was saying that it'd be much better to get paid direct into the bank account and have another income source coming in where it is obvious it's for rent and that this can be viewed as a long term income source to repay loans so would be more favourable to lenders and they'd still be saving the same amount from their salary, but also have the additional income from rent, but they were dismissive of the idea and didn't want to listen.

    Is there any disadvantages at all of getting rent direct to the bank if they won't be paying any tax on it? If they want to appear more attractive to lenders in future, is there any advantage to getting rent in cash and having no trace in the account?

    Any feedback would be appreciated :)


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