# House share or Airbnb? Pros & cons



## Julius (15 Dec 2014)

I'm living alone in my own 2 bed townhouse in Sandymount which I've owned for last 26 years. I only ever had a tenant in the first couple of years after I bought it. Unfortunately I'm now in the position where I feel I need to supplement my low earnings. The house is in excellent condition. I've recently transferred from Jobseekers Allowance to Back to Work Enterprise Scheme and am trying to get a sole trader business up and running. 
*I would appreciate any advice re taking in a tenant on a house share arrangement or Airbnb. *
Under the BTWES I will not have to pay tax on earnings for the next two years as I will definitely not earn enough even if income from tenant or Airbnb is taken into account.
If I go the house share/tenant option then would it be better to have an informal agreement or a formal landlord/tenant contract?
Any other advice regarding pitfalls and how to avoid them would be great.
Julius


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## Thirsty (16 Dec 2014)

You won't have to pay tax under the Rent-a-Room scheme as long as the total rent is €12,000 per annum or less.

I don't know how the Air BnB scheme is treated for tax purposes.

Personally I'd rent out the room to a sharer.  If it doesn't work out you can always ask them to leave.


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## kmick (16 Dec 2014)

I would go rent a room as mentioned. AiRBnB earnings would be taxable and would require you to fill out a Form12 for reveneue regardless.
Standard lease here
[broken link removed]


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## Julius (16 Dec 2014)

Thanks Thirsty – I didn’t know about the Rent-a-Room Scheme so I’ll read up on it today. Under the Back To Work Enterprise Scheme that I’ve recently been approved for, I wouldn’t have to pay tax on the rental income for next couple of years anyway because I won’t earn beyond the €40k p.a. threshold – my business is tour guiding and if I earned €15k from it in year 1 I’d been doing very well. However, I’m an actor as well, so in the unlikely event that I get some properly paid acting work, I think it would be better for me to register for the Rent-a-Room Scheme. 
A quick read through the Rent-a-Room link has been very useful – I’ll read through the other links on that page later - so thanks again.


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## Julius (16 Dec 2014)

Thanks Kmick – The Topfloor lease will be useful if I decide not to register for the Rent-a-Room Scheme. Since my reply to Thirsty above, I’ve noticed the following stipulation under the Rent-a-Room Scheme.
_If you are getting a means-tested social assistance payment from the Department of Social Protection, any rental income you get will be assessed as means and may affect your payment._
I need to check with Social Welfare if the payment I get from them under the BTWES is a social assistance payment and if so will a rental income under the Rent-a-Room Scheme result in that payment being reduced and if so, by how much.


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## facetious (16 Dec 2014)

Julius said:


> Thanks Kmick – The Topfloor lease will be useful if I decide not to register for the Rent-a-Room Scheme. Since my reply to Thirsty above, I’ve noticed the following stipulation under the Rent-a-Room Scheme.
> _If you are getting a means-tested social assistance payment from the Department of Social Protection, any rental income you get will be assessed as means and may affect your payment._
> I need to check with Social Welfare if the payment I get from them under the BTWES is a social assistance payment and if so will a rental income under the Rent-a-Room Scheme result in that payment being reduced and if so, by how much.


Just a few things that come quickly to mind:

You will not have a tenant but a licensee or lodger. Thus you cannot have a lease agreement. If you have a written agreement (which is very rare for licensees) you will have a Licence Agreement.

Most people renting out a room in their home just have a set of simple rules which could include: smoking, visitors and overnight stays (sleepovers), house cleaning, deposit, notice period (usually agreed as the same as the rent period) etc.

Of course, as the home owner, you may introduce new rules if you see fit and you may also ask an antisocial lodger to leave immediately if you feel threatened, intimidated or the lodger is a risk to the structure of the property.


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## Julius (16 Dec 2014)

Thanks for that Facetious. The Citizens Advice website says the following:
_Before you arrange to rent out a room in your home, it is strongly recommended that you and the tenant agree some ground rules and put them in writing. If you and your tenant each sign and keep a copy of this agreement, you can both refer to its terms in the event of confusion or disagreement. These ground rules might include:

How long is the tenancy going to last?
How much notice will you or your tenant have to give if either of you chooses to end the tenancy?
How much rent will the tenant pay and how often (for example, weekly, monthly)?
How will this rent be paid (cash, cheque, standing order etc.)?
When will the rent be reviewed and how much notice will you give the tenant of a rent review?
How are utility bills (electricity, gas, phone) to be divided between you and the tenant?
Will the tenant be expected to contribute towards service charges, such as water and refuse charges?
Can the tenant have visitors to stay overnight?
Are there any restrictions regarding noise levels?_


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## serotoninsid (16 Dec 2014)

Plenty will tell you that you are only likely to disadvantage yourself by having any sort of written agreement.  Any rules are better communicated as part of a conversation from the outset.  As occupier, you have as much rights as you need without any written agreement.  Ultimately, if there's an issue, you can end the arrangement.  The usual format would be for either party to give notice equal to the duration of time they pay for i.e. if rent paid weekly, then 1 weeks notice.  If there is something very wrong (any type of security problem for the property, your possessions or yourself), then that can be sufficient to bring things to an abrupt close.


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## Julius (17 Dec 2014)

Thanks Serotoninsid – I agree, a verbal agreement is my preference. From the replies I’ve received to my post I will take in a tenant under the Rent-a-Room Scheme. A local estate agent that manages rentals for people is coming to view my house this afternoon. I believe their fee is the first months rent but I’ll find out more from them today. I’m sure you will all think that I should find a tenant myself through Daft or whatever but I feel that a professional that has lots of experience will reduce the risk of getting a problem tenant. However, the estate agent is coming to view with the understanding that I’ve made no commitment to them. 
If anyone has any thoughts on the best way to go about finding a good tenant for the house share I’d be grateful.


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## facetious (17 Dec 2014)

Julius said:


> Thanks for that Facetious. The Citizens Advice website says the following:
> _Before you arrange to rent out a room in your home, it is strongly recommended that you and the tenant agree some ground rules and put them in writing. If you and your tenant each sign and keep a copy of this agreement, you can both refer to its terms in the event of confusion or disagreement. These ground rules might include:
> 
> How long is the tenancy going to last?
> ...


_
The Citizens advice (Information) do have errors on their website as you have just proved and this is a prime example. Tenants reading this will think that it applies to them while licensees/lodgers get the idea that they are tenants and have all the rights offered to tenants under the Residential Tenancies Act 2004, which is not the case._


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## facetious (17 Dec 2014)

Julius said:


> Thanks for that Facetious. The Citizens Advice website says the following:
> _These ground rules might include:
> 
> How long is the tenancy going to last? _Not normally used for licensees_
> ...


 A valid point to be advised to the licensee before occupancy.

You should spend some time thinking about what may upset you, disturb your own lifestyle and write these into a set of house rules so that the licensee as ample warning as to what to expect living in your home. Have these in written form and discuss them with any prospective licensee, item by item if necessary. 

In the last house in which I rented a room, the landlord required a deposit, one month's rent in advance and one month's notice before leaving. I asked about smoking (as I don't) and was told that it had to be outside. All utilities were included so I knew exactly what and when to pay.

In the end, it is your property and home; it is the licensee's temporary home and what you say goes.


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## serotoninsid (17 Dec 2014)

Julius said:


> A local estate agent that manages rentals for people is coming to view my house this afternoon. I believe their fee is the first months rent but I’ll find out more from them today. I’m sure you will all think that I should find a tenant myself through Daft or whatever but I feel that a professional that has lots of experience will reduce the risk of getting a problem tenant. However, the estate agent is coming to view with the understanding that I’ve made no commitment to them.
> If anyone has any thoughts on the best way to go about finding a good tenant for the house share I’d be grateful.


I think you should reconsider that option asap.  This is something *you *should do.  Remember, you are talking about someone who will share the house with you.  The definition of a 'good' tenant in this scenario is someone who you can get along with.  
The only one who is positioned to get an idea of that is you.  Don't waste your money!



Julius said:


> If anyone has any thoughts on the best way to go about finding a good tenant for the house share I’d be grateful.


Put an ad up for houseshare on daft.ie - its free.

I'd also strongly recommend you run a search on the accomodation & property section of boards.ie using "lodger" as keyword - read some of the key threads on the subject and get up to speed on the potential conflicts and problems that may arise as part of an owner occupier renting out a room.


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## Julius (17 Dec 2014)

Point taken Facetious – I will not use the term tenant again. 
Regarding the term of house share, I will not refer to any fixed period. However, I think I’ll mention a trial period of say 3 months but with the clear understanding that either party can end the arrangement prior to that at a months notice.
I agree with you that an all-in-rent covering utility & service charges is better.
As to sleepovers, I’d feel that to impose restrictions on someone paying a good rent would be unfair. However, your point about thinking about what would upset me – certainly this is one area that could be upsetting if abused – but as you and Serotoninsid have said, I can bring the arrangement to an end.

Serotoninsid – yes I will search boards.ie as you suggest. Thanks.


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## Macbookair (17 Dec 2014)

My understanding is Revenue will now treat all Air BnB providers as if they are operating a small Bed and Breakfast business.


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## putsch (17 Dec 2014)

Macbookair said:


> My understanding is Revenue will now treat all Air BnB providers as if they are operating a small Bed and Breakfast business.



Could you explain what your understanding is based on? My reading of the rent a room scheme provisions indicate it applies to airbnb provided you are actually sharing your home with the guest.


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## facetious (17 Dec 2014)

Julius said:


> Point taken Facetious – I will not use the term tenant again.
> Regarding the term of house share, I will not refer to any fixed period. However, I think I’ll mention a trial period of say 3 months but with the clear understanding that either party can end the arrangement prior to that at a months notice.
> I agree with you that an all-in-rent covering utility & service charges is better.
> As to sleepovers, I’d feel that to impose restrictions on someone paying a good rent would be unfair. However, your point about thinking about what would upset me – certainly this is one area that could be upsetting if abused – but as you and Serotoninsid have said, I can bring the arrangement to an end.
> ...


If either party can end the arrangement during the first three months then why mention it at all. Just ask for one month's notice before leaving.

In that case you may find that a lodger may be inclined to have his/her partner stay over, for free, on a more or less permanent basis. This has cropped up on several occasions as to how long is too long for sleepovers. IMHO, you should say no more than, say 5 nights per month. If the person wants sleepovers more often, let them rent somewhere on their own where their visitors can stay as long as they want.


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## Julius (18 Dec 2014)

Macbookair and Putsch – I spoke to Revenue just now and they confirm that Airbnb income is treated like earnings from a B&B business. I had already taken the decision not to go the Airbnb option because it’s not covered by the Rent-a-Room Scheme under the terms of which scheme, my BTWEA would not be impacted and earnings from the house share would not be taxable.

Facetious – you’re absolutely right, it makes no sense to have a trial period of 3 months when you have agreement to a months notice. What I was trying to address was the situation where one person (either me or lodger) realised early on that it was not going to work out. I think I meant to write a weeks notice during the 3 month trial period, rather than a months notice. However, I think I’m overcomplicating matters. 
Keep it simple – deposit of one months rent plus one months rent in advance and one months notice by either party.
Also, on sleepovers – I think you’re right – the issue should be discussed. From looking at boards.ie as suggested by Serotoninsid, sleepovers is a potential area of stress and conflict.
Thanks All


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## T McGibney (18 Dec 2014)

Julius said:


> Macbookair and Putsch – I spoke to Revenue just now and they confirm that Airbnb income is treated like earnings from a B&B business. I had already taken the decision not to go the Airbnb option because it’s not covered by the Rent-a-Room Scheme under the terms of which scheme, my BTWEA would not be impacted and earnings from the house share would not be taxable.



There's no guarantee that this particular Revenue policy is legal or watertight, but on the other hand if the Airbnb activity closely resembles a B&B (multiple customers typically staying for 1/2 nights or similarly short periods) then expect it to be taxed like a B&B.


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## MoTown (28 Mar 2015)

Julius said:


> I had already taken the decision not to go the Airbnb option because it’s not covered by the Rent-a-Room Scheme under the terms of which scheme, my BTWEA would not be impacted and earnings from the house share would not be taxable.


Hi Julius, 
I'm curious to what revenue said about the Airbnb income and your BTWEA?


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## Newbie-employee (28 Mar 2015)

Revenue have actually issued guidance in the last two weeks saying they will tax rentals received from AirBNB.  You could argue it until the cows come home but I would consider it hassle and more trouble than its worth (stranger after stranger, not the Revenue being the cause of trouble)

If giving a room to someone, this person isn't your tenant - although this is the phrase commonly used.  The person will not have usual tenant rights.


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