# Planning to rent out my apartment - TRS/Insurance/Tracker questions



## FunnyOnion (5 Jan 2012)

Hi everyone, 

My family is expanding so I'm hoping to buy a house this year and plan to rent out my duplex apartment to Dublin City Council for 5/10 years in the meantime.

I bought my apartment in 2006 so would've been going into year 7 with regards to the TRS credits and they would've finished this year anyway.  However, now that they've been extended until 2017 - if I buy a new house - can I transfer them to the new property or do I just lose them completely when I come to rent out my apartment? 

Also, my apartment is part of a management company so the building insurance is paid as part of my yearly service charges.  When people talk about taking out landlord's insurance - do they mean building insurance or contents insurance?

I also have a tracker with KBC and nothing is mentioned in my T&Cs about informing them if I decide to rent out my apartment or losing my tracker if I do this so I'm not going to tell them.  Has anyone else got a tracker with KBC and done this already or spoken to them about this?  All info much appreciated. Thanks!


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## looking (29 Jan 2012)

I don't have any answers but am in a very similar situation! Interested to hear if any answers!


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## serotoninsid (29 Jan 2012)

FunnyOnion said:


> I also have a tracker with KBC and nothing is mentioned in my T&Cs about informing them if I decide to rent out my apartment or losing my tracker if I do this so I'm not going to tell them.


Do the T&C's refer in any way to a "_Home_" Loan?


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## shesells (29 Jan 2012)

FunnyOnion said:


> Also, my apartment is part of a management company so the building insurance is paid as part of my yearly service charges.  When people talk about taking out landlord's insurance - do they mean building insurance or contents insurance?



Landlord insurance is different. There is a really good article http://www.irishlandlord.com/index.aspx?page=infocentre_article_view&id=6 that explains the intricacies of such insurance policies and requirements.


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## Bronte (30 Jan 2012)

When you rent out your apartment you are no longer entitled to TRS, instead you are entitled to deduct 75% of the interest paid from your rental income. You will have to register with the PRTB, pay the NPPR and new property tax. You have to have insurance that covers you as a landlord. You will pay tax on any profit and will have to make an annual return. Have a look at the landlord thread to get a feel for what's entailed. Becomming a landlord is not easy, don't underestimate the hard work. Not sure how easy it is to rent to Dublin council, what makes you think you are eligible for this. 

In relation to KBC, personally I wouldn't tell them anything, but have a read of your terms and conditions, a lot of the newer contracts mean that if you become a landlord you lose your 'tracker' / 'preferetiall home loans rates'

How do you know you will be able to get another mortgage?


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## FunnyOnion (2 Feb 2012)

Hi, thanks for the replies.  Just another question - I've seen people mention that if you rent your property you have to inform the bank so that they can change the insurance to an investment property (am I right in saying this?).  As I said, my building insurance is included in my management fees so I assume the bank wouldn't be aware of whether it's residential or investment...??

Since my last post I have applied to DCC to offer my apartment for the RAS scheme but they are currently not taking on any properties in my area at the moment, however they did say to check back with them in a few months time as they may have a requirement later on this year.  I won't be ready to move for another few months yet anyway, but I may have to investigate renting privately as opposed to DCC.

I've been doing some research into renting out a property and I think we should be able to make the figures add up.

Bronte, to answer your question, we have already gotten mortgage approval for a 90% loan and will probably be in a position to move by the summertime so over the next few months, we'll be saving the last bit of our deposit, solicitors fees etc.

Serotoninsid - I have to check my mortgage documents regarding the "homeloan" bit.  If it mentions a homeloan, is this sufficient evidence for the bank to remove my tracker? Has anyone lost their tracker with KBC when they rented out their property?


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## serotoninsid (2 Feb 2012)

FunnyOnion said:


> I've seen people mention that if you rent your property you have to inform the bank so that they can change the insurance to an investment property (am I right in saying this?).  As I said, my building insurance is included in my management fees so I assume the bank wouldn't be aware of whether it's residential or investment...??


My understanding is that you have to change your insurance - the insurance co. class it as a different type of risk - so you simply wouldn't have cover in place if it's not the appropriate cover.  I don't know who you bank with - but with NIB, they have rang me up each time I have changed insurer to request a copy of the policy.  The main aim of any bank in this regard is to ensure that they are noted as the 'lienholder'.  However, who's to say that they may have another agenda...might not even be now - but at a later stage - and use this info to dump people off the homeloan rates to investment rates??



FunnyOnion said:


> Serotoninsid - I have to check my mortgage documents regarding the "homeloan" bit.  If it mentions a homeloan, is this sufficient evidence for the bank to remove my tracker? Has anyone lost their tracker with KBC when they rented out their property?


I have to point out - I have absolutely no professional knowledge in this regard - but I am an avid reader of aam - and this has been brought up by others before.  One could only imagine that a "homeloan" differs from an investment product??  Get clarification on that before you act.


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## FunnyOnion (2 Feb 2012)

Thanks serotoninsid


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## Bronte (3 Feb 2012)

FunnyOnion said:


> we have already gotten mortgage approval for a 90% loan and will probably be in a position to move by the summertime so over the next few months, we'll be saving the last bit of our deposit, solicitors fees etc.


 
Mortgage approval now means nothing.  Rules are changing all the time.  

You need to change your house insurance to landlord insurance.  Personally I'd check my bank contract and if you see nothing, and even if you do do not inform the bank or they will try and take the tracker off you.  But you have a problem, is it the same bank you plan to get your new mortgage with?  

You do not need the bank to change your house insurance.  

In relation to renting, thinking the figures add up and them actually adding up are two different things.  

You have not posted up any figures so it is exceedingly difficult to see the full picture.


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## FunnyOnion (3 Feb 2012)

Bronte, I'm well aware that mortgage approval is only that - approval - and many things may change between now and when I actually request the finance to purchase a new property. However, as I have already stated, I am not moving immediately and am in the process of doing as much research as I can, before putting the wheels in motion. The mortgage approval is certainly a positive indication for my plans for the future - I know it's not a certainty - but I have to proceed (albeit cautiously) on the basis that I will get financing until I hear otherwise.

The bank that has approved a mortgage for us, is not the same bank that we hold our current mortgage with. We have no loans, no credit card debt, no bad credit history, some savings, joint yearly income of 100k and I am a public sector worker so my job is reasonably secure. The properties we are looking to purchase are in the region of about 200k so the mortgage will be similar to what we are currently paying (when you take into account a much higher interest rate etc).

I don't want or need to post my rental figures as I have calculated it all myself and can see that the figures will add up for me. This board has been a great source of information with regards to that and I really appreciate all the feedback.

I'm not naive about the problems that landlords encounter when renting out a property, however when weighing up the pros and cons, I believe it is worth it for a number of years anyway, until the time come to sell my current apartment. I won't be renting my apartment and making a profit every month, however I should be able to break even or withstand a small loss for a sustained period. For me it is worth it, as to sell my apartment now (if I could even manage to sell it), would incurr a much greater loss.


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## iggy11 (16 Feb 2012)

Bronte said:


> When you rent out your apartment you are no longer entitled to TRS, instead you are entitled to deduct 75% of the interest paid from your rental income. You will have to register with the PRTB, pay the NPPR and new property tax. You have to have insurance that covers you as a landlord. You will pay tax on any profit and will have to make an annual return. Have a look at the landlord thread to get a feel for what's entailed. Becomming a landlord is not easy, don't underestimate the hard work. Not sure how easy it is to rent to Dublin council, what makes you think you are eligible for this.
> 
> In relation to KBC, personally I wouldn't tell them anything, but have a read of your terms and conditions, a lot of the newer contracts mean that if you become a landlord you lose your 'tracker' / 'preferetiall home loans rates'
> 
> ...




Hi
I'm in same situation .
I'm going to be renting out my apt.
I know I have to inform the bank that I won't be able to get TRS anymore but if I do this will they then take away my tracker ?


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## mandelbrot (17 Feb 2012)

FunnyOnion said:


> Hi everyone,
> 
> My family is expanding so I'm hoping to buy a house this year and plan to rent out my duplex apartment to Dublin City Council for 5/10 years in the meantime.
> 
> ...





Bronte said:


> *When you rent out your apartment you are no longer entitled to TRS*, instead you are entitled to deduct 75% of the interest paid from your rental income. You will have to register with the PRTB, pay the NPPR and new property tax. You have to have insurance that covers you as a landlord. You will pay tax on any profit and will have to make an annual return. Have a look at the landlord thread to get a feel for what's entailed. Becomming a landlord is not easy, don't underestimate the hard work. Not sure how easy it is to rent to Dublin council, what makes you think you are eligible for this.
> 
> In relation to KBC, personally I wouldn't tell them anything, but have a read of your terms and conditions, a lot of the newer contracts mean that if you become a landlord you lose your 'tracker' / 'preferetiall home loans rates'
> 
> How do you know you will be able to get another mortgage?





iggy11 said:


> Hi
> I'm in same situation .
> I'm going to be renting out my apt.
> I know I have to inform the bank that I won't be able to get TRS anymore but if I do this will they then take away my tracker ?



Just to clarify a fairly important point here; the OP will be entitled to claim TRS on the interest on the mortgage on their new home.

Bronte is quite right that there will be no more TRS on the original loan once it is no longer the OP's PPR, but that doesn't mean they can never get TRS again on any mortgage.

Iggy you don't say whether you are buying elsewhere at the same time as letting your apt, but if so then my point about TRS on any new loan in 2012 applies to you...


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## FunnyOnion (30 Mar 2012)

Mandelbrot,

If I buy a new property this year which will be my PPR - do I qualify for a new rate of TRS credits as announced in the last budget?


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## Bronte (2 Apr 2012)

iggy11 said:


> I know I have to inform the bank that I won't be able to get TRS anymore but if I do this will they then take away my tracker ?


 
You don't have to inform the bank about TRS, you should inform revenue, who will inform the bank.


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## Sunset (17 Apr 2012)

Hi Im in a similar situation, I actually rang the Bank I have my mortgage with Ulster Bank I originally had it with First Active. I asked if I rented out my apartment would I lose my Tracker and the answer was a definite NO. I was told that no institute could take my Tracker unless I sign something to agree to it. In terms of TRS I too would have naturally come to an end with it this year but with budget changes I would be entitled to it until 2017. Obviously I won't be entitled to it if I rent it out and will have to inform Revenue, at the moment it is only €53 so its not a huge hit. My next step is to learn the tax return game and what I have to do with regards to Revenue.


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## serotoninsid (17 Apr 2012)

Sunset said:


> Hi Im in a similar situation, I actually rang the Bank I have my mortgage with Ulster Bank I originally had it with First Active. I asked if I rented out my apartment would I lose my Tracker and the answer was a definite NO.


I would be looking for written confirmation of that.  On another issue, I contacted my bank about something and they told me that what I had in mind would have no effect on my mortgage with  them.  I confirmed the conversation back via email - and at that point, he came back and said he had checked the mortgage agreement and that I would be in breach of the T&C's of the mortgage .  This was a total turn-around to what I was told on the phone.  

I would imagine that you were told this as whomever you spoke to believed that to be the case.  However, when you check out the difference between homeloan rates and investment loan rates, it's well worthwhile having it in writing - and well and truly bolted down.  That way, you can be assured that nothing is going to come back and bite you at some future point.


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