The landlord game: worth the hassle or time to get out of it?
GETTING a call from your tenants about a leaky lean-to roof is the last thing you want when your sick toddler’s temperature has spiked to almost 40 degrees Celsius and you’re rushing panic-stricken to Caredoc. So too is a call to replace a fridge freezer — when you’ve already replaced the fridge for the same tenants four times in the space of two months but for some bizarre reason, their brand new fridges keep breaking down.
These are exactly the kind of calls I dealt with when I rented out a property for four years. My husband and I decided to rent out our first home after we moved house during the recession. The property market was in a downturn at a time, so rather than sell that property at a loss, we figured it would be better to rent it out — until the market recovered. The four years that we rented out that property coincided with some of the busiest years of our lives. We had very young children — one of whom was regularly sick, a new home which was turning into a constant renovation project, jobs to hold down, and a daily commute which we had underestimated.
Our tenants were reliable, always paid their rent on time and never damaged the property. We did the best job that we could as landlords and always dealt with any problems which our tenants brought up.
However we had enough on our plate without managing tenants and the upkeep of a second property, so we sold that property as soon as prices recovered — and it was a huge personal, as well as, financial relief. We never made any money as landlords. In fact, we made a loss: although the rent covered the mortgage repayments, it didn’t cover the cost of the property upkeep and rental income tax bill.
The only advantage of renting out our first property was that doing so allowed us to sell that property when the market recovered.
The Government’s plans for tougher sanctions on landlords — including fines of up to €15,000 plus legal costs — make me even more relieved to be out of the landlord game.
I was never a ‘rogue’ landlord and while I agree that action should be taken against unscrupulous landlords, I also understand how small-time landlords might unwittingly break the rules around renting. Landlords already could have to pay up to €20,000 in damages for breaching their obligations. Had I been hit with such a bill, I would not have had a chance in hell of paying it — I don’t have that kind of spare cash and neither do many small-time landlords.
“The problem for all landlords is the complexity of the legislation [around renting out property] — it is confusing, intricate and difficult for professionals who abide by it on a daily basis, so it is absolutely horrendous for the 92pc of landlords who own less than three properties,” said Stephen Faughnan, chairman of the Irish Property Owners Association (IPOA), which represents landlords.
Of course, the soaring rents of the last few years means it is possible to make a lot of money from renting out property. So when does it make sense to stay in the landlord game — and when does it not?