AirBNB vs Rental

jamesthepeach

Pablo Eager Bus wrote: »

Still doesn't add up for me. Once the owner can move freely between around the house via internal doors there is absolutely no argument for seperate dwellings. There is no issue renting a granny flat either once it has an internal door as the internal door means it is integrated into the house. It's rooms in the house same as a bathroom and a bedroom is.

Well since it went to court shouldn't be too hard for him to provide a link and we can all read the ins and outs if it.

Claw Hammer

jamesthepeach wrote: »

Well since it went to court shouldn't be too hard for him to provide a link and we can all read the ins and outs if it.

It was in the circuit court. No written judgement available.

Claw Hammer

Pablo Eager Bus wrote: »

Still doesn't add up for me. Once the owner can move freely between around the house via internal doors there is absolutely no argument for seperate dwellings. There is no issue renting a granny flat either once it has an internal door as the internal door means it is integrated into the house. It's rooms in the house same as a bathroom and a bedroom is.

The fact the owner can move around isn't conclusive. Providing a second kitchen for the exclusive use of other people is the nub of it. It is not the same as bedrooms and bathroom. The kitchen is regarded as an indicator of a dwelling. The council make it a specific condition that a granny flat can't be rented once the granny goes.

jamesthepeach

Claw Hammer wrote: »

The fact the owner can move around isn't conclusive. Providing a second kitchen for the exclusive use of other people is the nub of it. It is not the same as bedrooms and bathroom. The kitchen is regarded as an indicator of a dwelling. The council make it a specific condition that a granny flat can't be rented once the granny goes.

Good thing the op isn't talking about a granny flat then.
But I could use my grannies flat after she goes, knock a door through the wall if there isn't already one and then let a room or two in the main part of the house and never go in there if I felt like it.

jamesthepeach

Claw Hammer wrote: »

It was in the circuit court. No written judgement available.

I thought that might be the answer alright.

Anything from the RTB.

Claw Hammer

Claw Hammer wrote: »

The fact the owner can move around isn't conclusive. Providing a second kitchen for the exclusive use of other people is the nub of it. It is not the same as bedrooms and bathroom. The kitchen is regarded as an indicator of a dwelling. The council make it a specific condition that a granny flat can't be rented once the granny goes.

Even if you are under the impression a granny flat can't be rented (which I don't agree with since there are loads of them being rented up and down the country). You rent them a room and they just happen to have use of a kitchen that is rarely used by the owner. Once there is an internal door a granny flat is just a figure of speech, in reality its just a collection of rooms the same as the upstairs of a house has bedrooms and a bathroom. Same in the ops situation, rent out rooms separately and they have shared use of the second kitchen with the owner, the owner just happens to only use it "now and again".

Its like when you rent a bedroom without an ensuite but where the other bedroom has an ensuite. The person without the ensuite is generally told that the bathroom is almost their's but not exclusively so and it will on occasion be used by others.

Claw Hammer

jamesthepeach wrote: »

I thought that might be the answer alright.

Anything from the RTB.

The RTB has nothing to do with planning. Nobody has yet defended a case in the RTB that even though they had 2 kitchens in the property, it was still one dwelling in which the landlord resided.
This case shows the attitude of the RTB
http://www.courts.ie/Judgments.nsf/0/C44D283B4830252680257DB700404B8D

jamesthepeach

Claw Hammer wrote: »

The RTB has nothing to do with planning. Nobody has yet defended a case in the RTB that even though they had 2 kitchens in the property, it was still one dwelling in which the landlord resided.
This case shows the attitude of the RTB
http://www.courts.ie/Judgments.nsf/0/C44D283B4830252680257DB700404B8D

Not doing it for me sorry.
Bold statement and absolutely nothing to back it up.

Claw Hammer

Claw Hammer wrote: »

The RTB has nothing to do with planning. Nobody has yet defended a case in the RTB that even though they had 2 kitchens in the property, it was still one dwelling in which the landlord resided.
This case shows the attitude of the RTB
http://www.courts.ie/Judgments.nsf/0/C44D283B4830252680257DB700404B8D

The RTB are are finding against the room renter in that link, so not sure how it's helping your argument.

These cases don't end up in front of the RTB to be "defended" as people are not in the habit of fighting cases they are guaranteed to lose. If you are renting under the same roof as the property owner and he can freely enter all parts of the property you are a licensee no matter much you say they are a tenant it won't change this fact. Why do you feel so strongly that a person who is a guest in another persons home should have tenancy rights, it's madness.

Claw Hammer

Pablo Eager Bus wrote: »

The RTB are are finding against the room renter in that link, so not sure how it's helping your argument.

These cases don't end up in front of the RTB to be "defended" as people are not in the habit of fighting cases they are guaranteed to lose. If you are renting under the same roof as the property owner and he can freely enter all parts of the property you are a licensee no matter much you say they are a tenant it won't change this fact. Why do you feel so strongly that a person who is a guest in another persons home should have tenancy rights, it's madness.

The judgement refers to a case where the RTB found against a landlord who let a room. The case shows the principles which will be considered. Note the emphasis on the fact that the landlord used the same kitchen as the tenant which the RTB said was most important. That is the crucial issue in all of this.

Claw Hammer

Claw Hammer wrote: »

The judgement refers to a case where the RTB found against a landlord who let a room. The case shows the principles which will be considered. Note the emphasis on the fact that the landlord used the same kitchen as the tenant which the RTB said was most important. That is the crucial issue in all of this.

The case being referred to is a well known one and if you read it you would see that's it's of absolutely no relevance whatsoever to the type of setup being discussed in this thread.

James 007

Guys all good points raised here. Any tips on how to convert the bedrooms and the kitchen. Ideally he would like to make one of the rooms for 4 and the other for 2 persons, but would like to make the rooms comfortable with proper study area and seating area. There would be only one shower so this would limit tenant no.s

davindub

James 007 wrote: »

Guys all good points raised here. Any tips on how to convert the bedrooms and the kitchen. Ideally he would like to make one of the rooms for 4 and the other for 2 persons, but would like to make the rooms comfortable with proper study area and seating area. There would be only one shower so this would limit tenant no.s

Ignoring the legal status...

Do not place a kitchen above the main entrance/ exit / stairs, it is very hard to make an upstairs room like this acceptable from a fire safety point of view anyway, but an advanced fire above the stairs / exit will block all exit from the building for those upstairs. You tend to get smoke risk from other rooms, but there is a flame risk from kitchens, can spread very quickly out the door, through the floor, through the ceiling, once a hole appears to feed the flames in such a small area = no one is getting out, the heat alone will kill. Ideally you would place it over the existing kitchen (that is why the bathroom is normally located over the existing kitchen).

Utility machines/ extractor units upstairs will also be an issue, the noise levels need to be considered for the unit below and the other half of the semi d (resonance can carry quite far).

You cannot plug two * two hob units into a standard circuit, there is a reason 4 hob units do not have plugs on them, a standard circuit upstairs will handle 1 hoover and some lamps, etc. So you will need to run 6 sq cable and additional circuits for the kitchen unit alone. You will need an electrician for this.

Overall, do not DIY this, get professionals to design and complete. Also you will be running a business, which requires a lot more in terms of health and safety - you should follow the same guidelines as b&b's.

Would you consider allowing the residents to use the kitchen downstairs? You can keep a sitting room for yourself, the bedroom, etc. And make something like a tv room upstairs. If it doesn't work, it's easy to change back.

James 007

davindub wrote: »

Ignoring the legal status...

Do not place a kitchen above the main entrance/ exit / stairs, it is very hard to make an upstairs room like this acceptable from a fire safety point of view anyway, but an advanced fire above the stairs / exit will block all exit from the building for those upstairs. You tend to get smoke risk from other rooms, but there is a flame risk from kitchens, can spread very quickly out the door, through the floor, through the ceiling, once a hole appears to feed the flames in such a small area = no one is getting out, the heat alone will kill. Ideally you would place it over the existing kitchen (that is why the bathroom is normally located over the existing kitchen).

Utility machines/ extractor units upstairs will also be an issue, the noise levels need to be considered for the unit below and the other half of the semi d (resonance can carry quite far).

You cannot plug two * two hob units into a standard circuit, there is a reason 4 hob units do not have plugs on them, a standard circuit upstairs will handle 1 hoover and some lamps, etc. So you will need to run 6 sq cable and additional circuits for the kitchen unit alone. You will need an electrician for this.

Overall, do not DIY this, get professionals to design and complete. Also you will be running a business, which requires a lot more in terms of health and safety - you should follow the same guidelines as b&b's.

Would you consider allowing the residents to use the kitchen downstairs? You can keep a sitting room for yourself, the bedroom, etc. And make something like a tv room upstairs. If it doesn't work, it's easy to change back.

Thanks for this. No one is ignoring legal status here. All very good points though. I think the neighbouring house is divided into 2 flats so I might ask him to see if he could look at this to get any ideas.

davindub

davindub wrote: »

Overall, do not DIY this, get professionals to design and complete. Also you will be running a business, which requires a lot more in terms of health and safety - you should follow the same guidelines as b&b's.

Would you consider allowing the residents to use the kitchen downstairs? You can keep a sitting room for yourself, the bedroom, etc. And make something like a tv room upstairs. If it doesn't work, it's easy to change back.

While I agree that it's not a DIY job he won't be operating a business either any more than a family renting a spare room to a student are. He won't even have to pay any tax once he keeps the rent for all rooms to 14k or less.

davindub

Pablo Eager Bus wrote: »

While I agree that it's not a DIY job he won't be operating a business either any more than a family renting a spare room to a student are. He won't even have to pay any tax once he keeps the rent for all rooms to 14k or less.

The OP was asking about airbnb as well, which is what I was referring to.

If he goes the airbnb/ offer accommodation services route, it's a trade.

Tax is schedule D case 1 rather than case 5 which is not exempt under rent a room (requires annual accounts to be submitted as well). It also will affect the capital gains PPR exemption on the property (capital gains tax).

There is good reason for the health and safety guidelines, where guests are short term, exit routes need to be clearly marked, etc.

StupidLikeAFox

James 007 wrote: »

Guys all good points raised here. Any tips on how to convert the bedrooms and the kitchen. Ideally he would like to make one of the rooms for 4 and the other for 2 persons, but would like to make the rooms comfortable with proper study area and seating area. There would be only one shower so this would limit tenant no.s

How much is he planning on charging? If he is aiming to stay within the 14k limit he is prob better off just getting 1 person in each room, much less hassle all round.

6 people in two rooms is pretty cramped, although he could easily make over 50k out of it if they were all paying 750 p/m. I'd say it would get v messy though

jamesthepeach

Agreed. The less people you let to to hit your target the better.
I would get quotes off interior designers.
They really will have good ideas and will have done this before. And will have builders on tap that can do the job to building regs if needed.
Even if you don't go with them they will give you great ideas.

4ensic15

StupidLikeAFox wrote: »

H

6 people in two rooms is pretty cramped, although he could easily make over 50k out of it if they were all paying 750 p/m. I'd say it would get v messy though

Given that single rooms in houseshares can be got for €500-€600 pm, the only market for bunk beds is backpackers. To get €750 would require full occupancy at €25 per bed per night. That is utterly unrealistic, besides the fact that VAT would have to be charged at that level of income.

The_Conductor

I agree- 50k is a pipe dream.
The OP would be far better off getting two decent occupants- at 650-700 a month- than 6 people. If nothing else- the single shower would mitigate against the dormitory type accommodation the OP is proposing- can you see 6 people queuing up for a shower in the morning- it would be mayhem.

A reasonable and realistic approach has to be taken- opening a youth hostel- is *not* the way to go.

davindub

davindub wrote: »

The OP was asking about airbnb as well, which is what I was referring to.

Fair enough I was thinking of it from a rent a room point of view. That being said while tax would be due if using Airbnb I wouldn't be so sure that it's a business but still just having invited guests. Also once he remains living there not sure why it would impact on CGT any more than rent a room would.

Personally I'd be staying away from Airbnb and instead stay under the rent a room scheme and aim to take in the max 14k per year tax free. It will be much less work than doing Airbnb and the people renting the rooms will all be licensees so he doesn't need to worry about issues with a person as they can be kicked out and replaced easily, same with no worries about over holding.

Airbnb makes more sense if he didn't live there at all and wanted to retain control of his property by not entering into long term leases.

Michael D Not Higgins

Pablo Eager Bus wrote: »

Fair enough I was thinking of it from a rent a room point of view. That being said while tax would be due if using Airbnb I wouldn't be so sure that it's a business but still just having invited guests. Also once he remains living there not sure why it would impact on CGT any more than rent a room would.

Personally I'd be staying away from Airbnb and instead stay under the rent a room scheme and aim to take in the max 14k per year tax free. It will be much less work than doing Airbnb and the people renting the rooms will all be licensees so he doesn't need to worry about issues with a person as they can be kicked out and replaced easily, same with no worries about over holding.

Airbnb makes more sense if he didn't live there at all and wanted to retain control of his property by not entering into long term leases.

"But the Revenue Commissioners said that if all or part of the property had been used for business purposes, including short-term rental accommodation prior to a sale, then a capital gains tax liability would arise on the portion of the property that was used for business purposes."

http://www.independent.ie/irish-news/airbnb-landlords-warned-over-tax-liability-31130972.html

There's two reasons you'd get AirBnB rather than rent-a-room. The return is higher (potentially) and they tend to be tourists and won't be hanging around the house much.

pilly

The_Conductor wrote: »

I agree- 50k is a pipe dream.
The OP would be far better off getting two decent occupants- at 650-700 a month- than 6 people. If nothing else- the single shower would mitigate against the dormitory type accommodation the OP is proposing- can you see 6 people queuing up for a shower in the morning- it would be mayhem.

A reasonable and realistic approach has to be taken- opening a youth hostel- is *not* the way to go.

Totally agree, this starting to sound more or more like someone just taking the complete piss and trying to make as much money as possible for as little hassle. Have to be honest OP, it's going to far to have 6 people to one shower and possibly a kitchenette type situation.

4ensic15

The_Conductor wrote: »

I agree- 50k is a pipe dream.
The OP would be far better off getting two decent occupants- at 650-700 a month- than 6 people. If nothing else- the single shower would mitigate against the dormitory type accommodation the OP is proposing- can you see 6 people queuing up for a shower in the morning- it would be mayhem.

A reasonable and realistic approach has to be taken- opening a youth hostel- is *not* the way to go.

^50 to 750 a month would put the o/p over the 14 k limit. The whole lot would then be taxable.

James 007

Yes, it needs to be taught out. Having 6 might be too much. Also the layout will need to be looked at, as do the showers. Ideally if the bathroom could be coverted into 2 shower rooms, but alot has to be taught and fleshed out. Ideally the place needs to be as comfortable as possible too.

4ensic15

James 007 wrote: »

Yes, it needs to be taught out. Having 6 might be too much. Also the layout will need to be looked at, as do the showers. Ideally if the bathroom could be coverted into 2 shower rooms, but alot has to be taught and fleshed out. Ideally the place needs to be as comfortable as possible too.

It is not just showers. What about toilets?

Graham

4ensic15 wrote: »

^50 to 750 a month would put the o/p over the 14 k limit. The whole lot would then be taxable.

+1

sounds like an awful lot of hassle and additional expense for a fairly marginal additional return after tax. Add in the risk factor that the additional return could abruptly stop and I can't see how it would make sense at all.