Buy to Let (from abroad) and tenants rights questions

KissMeArse · 07-02-2022 12:54am #1

Hi all,

First time posting or even looking at this forum so apologies if something like this been asked to death as I'm sure it has. Was just looking for anyone that has done similar and any advice that could be offered.

Currently live abroad and planning on returning back to Ireland permanently in the next 2 years. Wife and I have a site with planning full permission so it'll be our ultimate intention to build. However, we're interested in buying a house right now for a few reasons - a) we have saved up a good bit the last few years, can easily get an ex-pat mortgage and afford to throw down the 30% deposit on something say around the E250k mark whilst also still leaving us plenty in savings, b) we could buy it now and rent it out until we came home with the option of being able to move into it straight away and live there until we settle in jobs, sort mortgage for self build, get house built etc. That whole process could take 12-18 months and we're not too keen on moving back in with parents for that length with all due respect, we'd need our own space! After that we'd have the option to either sell the house or go back to leasing it out. And finally c) we just have our savings in a "high" interest savings account earning us very little so I feel our money could do a bit more for us.

I know some might suggest just waiting until we came home to buy but the reality is prices will likely have gone up by then, hence why I'd be interested in buying now. We've seen one or two places that look decent and would be interested in.

I've read some good threads of whether to manage tenants yourself or go through an agent and the costs involved there so I'm fairly comfortable with that.

Another thing I wanted to ask was around tenants rights. I've browsed this forum and read people referencing situations where tenants can pretty much go without paying rent but you can't kick them out. Is this just something that was just related to the pandemic, where people unfortunately lost their jobs and weren't in a position to pay rent and the government stepped in to ensure people weren't left homeless? Are there other situations where this could be the case? I'm just trying to pre-empt a situation whereby we got a house, got tenants and they turned out to be a nightmare and stopped paying rent for whatever reason and what my rights would be here.

Thanks in advance.

Effects · 07-02-2022 1:07am

Where are you planning to buy?

How are you going to manage the tenancy yourself from abroad?

KissMeArse · 07-02-2022 1:28am

https://www.boards.ie/discussion/comment/118593272#Comment_118593272

South East area.

Will most likely have to go through an agency but from reading other threads would consider doing the tenant application review process myself, if it were possible from abroad.

Effects · 07-02-2022 2:30am

How far abroad are you? Sounds like you'll have to do a lot of travelling.

KissMeArse · 07-02-2022 4:01am

https://www.boards.ie/discussion/comment/118593419#Comment_118593419

Other side of the world pretty much! Apologies, I probably wrongly assumed something could be done over Skype calls etc so it sounds like I would have to outsource this to an agent.

3DataModem · 07-02-2022 6:56am

My advice: get a good agent. In my experience the local smaller agents are by far the better agents, they will do viewing more readily, and also small businesses know the value of maintaining the space well and finding tenants who are a good fit for the place (less work for them).

Also, there is a risk of a tenant overholding and spoiling your return plan, but that is always a risk with property investment. You seem to have a cash buffer to weather this if it happens. In my opinion a good agent is much better at spotting the risks of this, provided they are incentivised properly (I wouldn't touch an agent ever again who charged per-tenancy).

Also, don't invest in property over a 1-2 year horizon. If you can keep it after moving to your self-build, fine, but if there's a good chance you'll sell after 2 years then I wouldn't touch a property.

Packrat · 07-02-2022 7:19am

I wouldn't with the % of rentals where there's issues with damage, non-payment, or tenants who won't vacate.

I was thinking the other day that if I had a few bob to spare myself (I don't) that what is buy to appreciate and rent out is an industrial unit..

I know it's no good to you to live in but less issues with tenants long term.

kirving · 07-02-2022 7:44am

https://www.boards.ie/discussion/comment/118593526#Comment_118593526

What is the percentage of rentals have issues with damage, non-payment or overholding?

Grumpypants · 07-02-2022 7:56am

By the time you have finished buying a house ( presumably unseen, unless you plan to fly home to view houses) you would do well to close in 6 months.

At a time when prices are inflated so you will likely get into a bidding war and over pay.

You would prob have to put money into it to get ready to rent. Furniture etc. On top of paying solicitors and estate agents you are easy looking at 5-10k.

Then you run the risk of the tenant not paying rent (unlikely but still a risk) more likely is when It comes time for them to move out and they can't find anything else and end up overstaying. It takes ages to get them out 18+ months in some cases.

So you would spend a lot, increase your risk, and end up in a stressful situation trying to buy, trying to rent, moving country, trying to get them out, trying to move in, trying to self build , trying to sell just to try and hedge against house prices going up over the next two years.

Packrat · 07-02-2022 8:28am

https://www.boards.ie/discussion/comment/118593537#Comment_118593537

Sorry, not biting today.

I've no interest in getting into any discussion of this topic, merely offering an opinion to the OP.

Go have a victimfest with someone else.

kirving · 07-02-2022 11:04am

https://www.boards.ie/discussion/comment/118593562#Comment_118593562

It's a very simple question, and tbh is fairly routine when you talk about percentages.

You were happy to have a discussion until you don't have any data to back it up, and instead imply I'm a troll, and call me a victim without any hint of irony. How about you sticking to facts rather than implications, as I did?

It's very valuable information for the OP in assessing their options. 5% of tenants not getting their deposit back, is a totally different scenario to 20% overholding for 6 months. Both are of course problematic, but different risks.

For what it's worth though, with a plan to move home, I wouldn't be letting out a house either.

07-02-2022 2:11pm

Don’t do it!

The rules regarding tenancy rights can change with very little notice An idea that’s been thrown around lately is removing the automatic right to take back possession of your property for family reasons or if you want to sell.

The control over decisions you and your wife make could very well be taken away from you

Caranica · 07-02-2022 2:34pm

I'm another vote for "don't do it". Being a landlord is stressful, thankless and can be a massive financial drain. Find a way to make your money work better for you.

AnRothar · 07-02-2022 2:55pm

Not a landlord but watching oireachtas tv where they were debating.housing.

Plan from 2024(?) Is that after 6 months all tennancies will become "of indefinite duration".

Tread carefully..

Effects · 07-02-2022 3:08pm

https://www.boards.ie/discussion/comment/118593972#Comment_118593972

I'd say the figure would be high enough, above 50%.

I've dealt with it myself on a couple of occasions, one really bad.

And I know a good few people that have been really badly burned by terrible tenants.

The_Conductor · 07-02-2022 9:57pm

No-one has any idea what the percentages are- for the simple reason, so few landlords bother bringing the cases to the RTB (as they are viewed as being solely there for tenants). Anecdotally, of the number of cases that are reported to the RTB- according to the RTB annual report, overholding is the single largest complaint by any party, to the organisation.

In light of the proposals to further dilute ownership rights, it would be exceptionally prudent if the OP were to go ahead with their proposal, to involve a decent property management company from the outset- and ensure that their interests are protected insofar as is practicable.

Wholly aside from the stupid property prices in Ireland at the moment- you would be exceptionally brave to consider becoming a landlord here- much less an absentee landlord.

Personally- I think that anyone who suggests to you that this is a good idea- does not have your best interests at heart and/or may be deliberately offering you malicious advice.

silver2020 · 07-02-2022 10:09pm

Not worth it

House prices are close to record levels. Building activity is ramping up hugely.

In excess of 40,000 homes will be completed this year. (They are saying 33,000, but that's a huge underestimation)

Prices are at unaffordable levels in some areas. And whilst there might be a small rise this year, I'd be forecasting a drop next year due to increasing supply and probable interest rate moves.

I just see no "profit" at current levels

KissMeArse · 08-02-2022 4:39am

OP here, thanks very much for all your replies and insights lads, it's very much appreciated.

Just some questions on some of the posts from above (apologies, not sure how to multiquote parts of posts):

As I understand it, tenant overholding is when a tenants lease is up but they stay in the property going week-to-week/month-to-month etc? Thus leaving the landlord in a position of not knowing if the tenant is going to stay or move anytime soon? Just trying to get my head around what the issue/risk is here. If this all seems correct, what are a landlords options here? I'm guessing they can't kick out the tenant to try get in a tenant who is tied to a lease? Or have it written into the contract beforehand that there is no overholding (if this is even legal? Apologies not sure of the laws around this) and at the end of the lease period they either sign another one or move out?

Furnished properties - how common is it in Ireland to offer a property that isn't furnished? To be honest, we hadn't planned on furnishing it. Where I currently live, it's much more common for rentals to be unfurnished so maybe that factors into my thinking and probably assumed this was the case in Ireland too.

Then you run the risk of the tenant not paying rent (unlikely but still a risk) more likely is when It comes time for them to move out and they can't find anything else and end up overstaying. It takes ages to get them out 18+ months in some cases.

On the above part by Grumpypants, how can it be the case that a tenant can stay in a property if their lease is up and you've made it known to them (in advance) that you want the property back? Surely this isn't breaking any laws and as a landlord who owns the property, you're well within your rights to demand this? In other words, how would it be the problem of the landlord if the tenant can't find something else?

I'm still trying to understand how a tenant can go without paying rent and the landlord is unable to remove them. I don't mean to sound naive in saying that but I just feel it's mad to think there may be some people brazen enough to do this. Surely if the tenant plays the poor mouth or sob story of losing their job or some other unfortunate life event (even if it is true) the landlord still has the right to evict, no?

Once again thanks for the responses guys. As mentioned previously I'm just trying to pre-empt certain situations and what options/risks/issues there are (on both sides).

Caranica · 08-02-2022 4:55am

Forcible evictions are pretty universally illegal without years of legal proceedings, or massive fines.

Yes a tenant can stop paying rent, change the locks, wreck the house and there's not a whole lot a landlord can do about it.

Regarding furnishings, there's a legal list of items you are required to provide in a rented property, it makes unfurnished properties next to impossible. Google will bring you to a list.

I'm a former landlord, had overholding tenants who did 5 figures worth of damage to the house and the only way we could get them to leave was to pay them off. I wouldn't recommend being a small time landlord to my worst enemy. The day we sold that house was one of the happiest days of my life.

08-02-2022 10:23am

@KissMeArse

For example we’ll say you have one tenant and the agreement is that rent of 1000 euro is due on the 1st of each month.

1st Jan - rent due but not paid

2nd Jan - serve written notice of arrears which gives tenant 28 days to pay. Can only be posted, handed to tenant or put through letterbox. Send copy to RTB

3rd Jan - 28 days period starts

30th Jan - arrears due by end of this day

31st Jan - serve written 28 day notice to evict for failure to pay rent. Send copy to RTB

1st Feb - This months rent due but doesn’t pay. 28 day eviction clock starts. Tenant has 28 days to dispute notice. Rent arrears now 2000 euro

2nd Feb - serve written notice of new arrears which gives tenant 28 days to pay. Can only be posted, handed to tenant or put through letterbox. Send copy to RTB

3rd Feb - 28 days to pay Feb arrears starts.

15th Feb - tenant contacts you saying oven not working. You are legally obliged to repair regardless of rent and eviction notices.

28th Feb - tenant has full 24 hours to have vacated property. Tenant doesn’t leave but opens a dispute with RTB.

1st March - Rent due, doesn’t pay. Outstanding now 3000 euros.

The process now is with The RTB due to dispute of notice. I’m unsure how quickly a case is heard but bear in mind it can be appealed. Also note that an RTB can only order a tenant to leave, that don’t enforce it. For that you need to apply to the courts. Tenant can still appeal this and it’s only the sheriff who can legally remove the tenant and their belongings from the property. You cannot personally remove them!

This is worst case but once it goes to RTB and courts, the wheels turn slowly and the months and 1000 euros mount up. YOU WILL NOT GET ANY MONEY BACK.

Claw Hammer · 08-02-2022 1:24pm

https://www.independent.ie/irish-news/were-at-our-wits-end-couple-left-27000-out-of-pocket-as-tenant-hasnt-paid-rent-in-two-years-40278913.html

https://www.irishtimes.com/news/social-affairs/landlord-at-wits-end-two-years-after-serving-notice-on-tenant-1.4760230

08-02-2022 1:57pm

Just some determination orders from RTB. Remember, the only way they can be enforced is through the courts

Rent arrears & Overholding Eviction notice served in Feb 21, Hearing Oct 21, Determination Order Dec 21 Money Owed nearly 10 grand

https://www.rtb.ie/downloads/determination-order/D.O_._0721-71148_.pdf

Overholding Dispute - notice to evict letter given in March 2020. Determination order Dec 21 allowing them a further 84 days to vacate

https://www.rtb.ie/downloads/determination-order/D.O_._0721-70985_.pdf

actually, here’s the link to orders made in 2020

https://www.rtb.ie/search-results/listing/eyJyZXN1bHRfcGFnZSI6InNlYXJjaC1yZXN1bHRzXC9saXN0aW5nIiwieWVhciI6IjIwMjEiLCJjb2xsZWN0aW9uIjoiYWRqdWRpY2F0aW9uX29yZGVyc3x0cmlidW5hbF9vcmRlcnMifQ

pc7 · 08-02-2022 2:03pm

Another in the 'don't do it camp'. I'm a landlord (not by choice), have been burnt once by tenants, that's with me living here. They had been model tenants up to the point the disappeared without paying and left the place empty. Better than some experiences others have had. I'm lucky with the tenant the last few years, but there can be issues that pop up that you'd really need someone you trust to deal with. Maybe an agent can do that for you, but it'll likely still be you getting a call New Years Day to say drains blocked, heating broken etc. etc. If my current tenant leaves I'll sell up as should be in a better position now to do so, couldn't do it before now without taking a big hit.

Also you may not get them out if you and the wife need the place on your return, I think you'd be mad to get into it.

DFB-D · 08-02-2022 2:11pm

I don't think advice that suggests this is a good idea is malicious.

Property has been an excellent investment in the past in terms of returns, in that sense it is a good idea.

However, there are unique risks which you don't have in other investments, but property is very unlikely to collapse in price altogether.

Rents may continue to climb or fall, plan accordingly and allow for periods of no rent. Hence purchasing by mortgage means you should be able to afford the repayments without rental income.

Doing it from abroad means additional agents fees for management and maintenance, its too hard to manage otherwise.

If you can handle all the above, and you believe property prices and rent will continue to rise, I believe property is probably the best return to risk. But as always, property should not be your entire investment portfolio, make sure you have pension, etc first.

Buy to Let (from abroad) and tenants rights questions

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