Thursday 21 September 2017

Should I rent out my apartment on the QT?

I own a one-bedroom apartment in the city centre which I simply cannot afford any more. I've had no option but to move back in with my parents and rent it out. My friends suggest I do it on the QT but I would prefer to know my obligations to see how it works out financially.

I can't possibly advocate renting out an apartment without all the legal and financial responsibilities that go with it, so best keep it above board.

Many single people who bought in the boom as you did are finding increasing mortgage payments hard to keep up with. Moving back in with parents is not always palatable, but may be an important stop-gap.

John Leahy, of IrishLandlord.com explains the responsibilities you now have:

"You will be required by law to pay the Non-Principle Private Residence (NPPR) charge of €200 annually.

"You will be legally required to register a tenancy with the Private Residential Tenancies Board (PRTB) which costs €90. There are hefty penalties for non-compliance.

"A Building Energy Rating (BER) certificate will also be required for the property.

"Proper investment property insurance will be needed. An owner-occupier policy is not sufficient.

"As a landlord you will be required to file a tax return regardless of whether you make a profit on the property or not. 75pc of the interest on your mortgage is allowable against tax and not your actual mortgage payment.

"You will need to inform your lender if you rent out the apartment. If you are on a tracker mortgage you may lose it as it's now an "investment" property."

My home insurance renewal is in and has risen by over €200 which I can't afford. The company says premiums have increased for everyone. Is there anything I can do to reduce the bill?

Insurance premiums rose over 6pc between the first and second half of 2011 and continue to rise this year. Companies blame the increased cost of flooding in Dublin and Cork.

You can look at the level of insurance you have. Most people are apathetic about updating their cover and assume the same amounts every year.

Rebuilding costs have dropped significantly. The Chartered Surveyors have a great site to calculate how much it would actually cost -- check if you're over-insured.

www.scsi.ie/rebuild2012 or download their calculator App.

Do not automatically insure contents for a percentage of re-building.

Calculate how much you actually need to replace everything and use that.

Check if you qualify for discounts. Being over 50, fitting smoke and burglar alarms or being in the house during the day all qualify for discounts.

Check your "All Risks" section. It's expensive to have things individually insured. Keep it to valuables over the individual item claim figure in your policy (usually around €1,000).

If you've ditched the golf clubs or video camera, stop insuring them.

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