Setting Rent for the First Time in RPZ - Opinions?

J

justme

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So.... I don't want to charge as much as I can get away with. I'd rather charge less but I want to future proof my investment so I'm not stuck at a lower rent in the future when they move out or my circumstances change. So I'm thinking, I will advertise rent at €Figure A, but, I will offer a reduced rent or refund or whatever you want to call it of X amount each month as long as the rent is paid on time as an incentive.
That way, on the RTB the rent is the higher figure, but in reality i'm charging a lower figure. Just throwing it out there here to see people's opinions and to troubleshoot. Do you think this is a work-around for the issue?
 
Sarenco said:
Why not?

It's a business arrangement, you are not running a charity.
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Call me a sucker, I like to try balance the act in between :)
So aside from the fact it is not a wise business move to charge less than I can, I'd like to troubleshoot the validity of my approach.
 
It doesn't make sense at this point.

There is a case for a one month rent rebate if the tenant is going to take on a task for you.

I have done it in the past where for example the garden had become overgrown.

Your tenant is obliged to pay the rent on time; offering a discount for timely payment is working on the assumption that it will be late otherwise & that's not a sensible way to go.

Set the rate per market; no good reason to do anything else at this stage.
 
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Charge whatever the market will bear to the class of tenant you are happy with.

If you are feeling generous to good tenants just reward them with better furniture or minor renovations. These are tax deductible and will enhance the value of the property.
 
I appreciate your replies people, but you're ignoring my question. I have been clear that I do not want to charge full market value and I will not charge full market value.

However, I want to have the ability to increase the rent to market value in the future should I decide to do so. With that in mind, I intend to have it registered with RTB at x amount but I will explain the situation to the tenant and tell him I'll accept a lesser amount each month based on rent being paid on time, i need to tie it to something like that to justify taking less than indicated on with the RTB.

Do you think that holds up?
 
Sarenco said:
No.

The rent is whatever you agree with your tenant and not some other made up figure.
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Appreciate your opinion but I dont think its correct. The rent is what you submit to the RTB, that's what I'll be held to account for. What you agree with and receive from your tenant each month can vary.

Nevertheless, I'm here to get opposing points of view so it's welcome.
 
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You could set the rent at market rate but include some extras you know they’ll need like broadband, TV, bins, gas/electricity (bit risky), annual window clean, annual painting.
 

justme said:
The rent is what you submit to the RTB.
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Suppose you set a fake rent of €2,000 and tell the RTB that and then collect only €1,500 from the tenant.

What will you tell Revenue when they ask you why you’re only declaring tax on the €1,500? They could infer tenant is paying you €500 in cash so you can evade tax.

There are all sorts of contractual, regulatory, and tax implications of having a fake rent and you would be wise to steer incredibly well clear of doing so.
 
Zenith63 said:
You could set the rent at market rate but include some extras you know they’ll need like broadband, TV, bins, gas/electricity (bit risky), annual window clean, annual painting.
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Yes that might be a better approach actually. Gas and electricity are prepay. I could just keep those topped up to the tune of the refund each month. Along with bins and broadband included, that would cover it.

Dr Strangelove said:
Suppose you set a fake rent of €2,000 and tell the RTB that and then collect only €1,500 from the tenant.

What will you tell Revenue when they ask you why you’re only declaring tax on the €1,500? They could infer tenant is paying you €500 in cash so you can evade tax.

There are all sorts of contractual, regulatory, and tax implications of having a fake rent and you would be wise to steer incredibly well clear of doing so.
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Yes, you're right. It brings the potential of too much trouble. I think Zeniths suggestion above works though. Charge full rate, but pay for bins and broadband and I can log into the prepaypower account each month and top it up with the remainder. Revenue would be none the wiser. Much better idea.

Thanks folks.
 
justme said:
pay for bins and broadband and I can log into the prepaypower account each month and top it up with the remainder.
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If you're going down that road, you'll need to ensure you'll definitely be eligible to claim those costs as tax deductions before you file your first tax return.

I'm not sure you will be.
 
You are obliged to inform the RTB of the actual rent, not a notional figure you make up for your convenience.
 
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