Increasing rent in RPZ

L

Logo

Registered User
Messages
287
Hi. I've a house rented for the last 7 years and only increased the rent once as the tenants were starting out with a young family. Rent is currently €900/ month. Recently the area has come within the rent pressure zone and can only be increased by 4% a year - and is now connected to inflation. I plan to sell the house in three years time but now realise that the rent history will have a serious impact on the sale. In these post-pandemic times, and inflation running at 1.6% - can I reluctantly give the tenants notice to leave, or at least increase the rent in the meantime? I realise that I'm going to be peanalised for not increasing the rent during the tenancy and any info is welcome. Thanks
 
can I reluctantly give the tenants notice to leave
Click to expand...
Are there renovations that you can do that would allow you bring the rent up to market value? Can you afford to leave the property unrented for two years? Perhaps you or a family member could live in it?

Failing all the above, I would consider selling it now with vacant possession while you can.
 
Logo said:
can I reluctantly give the tenants notice to leave
Click to expand...
Yes, but on very strict grounds like needing to move in yourself, major renovations, or planning to sell.

Logo said:
or at least increase the rent in the meantime?
Click to expand...
Yes, using the rent calculator here. If the rent was set exactly seven years ago the increase allowed is no more than the HICP of 4.5%. There is no point in waiting.
Logo said:
I realise that I'm going to be peanalised for not increasing the rent during the tenancy
Click to expand...
Maybe, maybe not. Anecdotally, buyers of rental houses going on the market are all owner occupiers. The previous rent won't be relevant to them. Almost no landlords are buying houses at the moment. Maybe a bit different for apartments.
 
Indefinite tenancies to come in now before the end of the year.
You make be stuck renting it forever, and with no rent increases.
 
OMG_OMG said:
You would be taking a substantial haircut on the open market price then.
Click to expand...
Possibly, but there's a shortage of rental accommodation so maybe not.
You could always buy the tenant out of their rental agreement. If you'll make €50k more for an empty house offer the tenant €10k to move out.
 
Purple said:
Possibly, but there's a shortage of rental accommodation so maybe not.
You could always buy the tenant out of their rental agreement. If you'll make €50k more for an empty house offer the tenant €10k to move out.
Click to expand...

When your market is restricted to only investors happy to buy with the rent at the level you are capped at, a sitting tenant might decide that €10k is cheap to cooperate and up their price to €25k or even higher. There is no scenario where selling with a sitting tenant is better than selling with vacant possession. Selling with a sitting tenant is going to substantially reduce your available market and the sharks will be circling.
I know of one that is going on now.
Where the house is sale agreed. The tenant is supposed to move out in January after being given the required notice. The tenant has said they will be appealing with the RTB now and are looking for (not an insignificant amount) money to drop it and move out on that date. Im sure once the buyer finds out this is happening they will pull out, because you just never know where it will end.
 
Yep, it's a mess. If tenants have that sort of security them landlords should have it as well. A 10 year least with a 5 year break clause and penalties for a tenant that moves out sooner... the thing is that such an agreement would be hard to enforce and it's not an equal relationship. For the landlord it's a business, a revenue stream. For the tenant it's their home. It's a much bigger deal to lose your home.
 
You must log in or register to reply here.
Menu
Log in
Register