The key to being a first-time landlord

Rentals have soared, with much of the supply coming from property owners who have failed to sell. Here's some advice for new landlords, writes Orna Mulcahy.

AS THE property slowdown intensifies, would-be sellers are turning increasingly to the letting market to meet the mortgage repayments.

There has been a dramatic increase in the number of rental properties coming on the market, with the leading letting website daft.ie reporting an unprecedented increase.

According to Daft's Naoise McNally, the website now has 14,500 houses and apartments for rent, compared to just 6,000 at the same time last year.

The increased choice has been due in part to developers putting entire blocks to rent, after failing to sell them. In some cases this is making it even more difficult for private owners to rent out their properties, because of the lower rents being sought by the builders. Despite the widely reported slowdown in the economy, 46 per cent of the overall residential lettings in Dublin still go to overseas workers.

However, the local market is brisk, too, as would-be buyers opt to rent rather than buy, as they wait for even lower new homes prices, so the rental sector has never been stronger.

Several of the large estate agency chains have transferred staff from residential sales into lettings as the slowdown continues.

Lisney reports brisk business, particularly at the lower end of the market, with a strong demand for well located one and two-bedroom apartments renting from €1,200 to €1,400 per month, but say that owners have to be realistic. "They are willing to come down in price to get them rented. A few months ago, some landlords might have been holding out on price. Now it's 'get it rented, and get some money coming in'," says Caroline McArdle of Lisney's lettings department.

Eileen Sheehy, managing director of Sherry FitzGerald's Lettings, says that they have upped their staff by 30 per cent to cope with the increased level of enquiries.

Many of the company's new customers are first-time landlords, who have been forced into renting out a property they have failed to sell. With them it's a matter of "managing expectations" says Eileen Sheehy, which really means you may not get the rent you expect, and you may be surprised by what it takes to get a property ready for letting.

They may also be unaware of some of the pitfalls involved in becoming a landlord. We asked some seasoned landlords for their advice to newcomers to the market.

• Get your property ready to rent. The days of collapsing sofas and wonky appliances are over. If you want to rent well, then your apartment or house has to look good, and be pristine. It's worth calling in professional cleaners to scour kitchen and bathroom floors and windows. Some property owners get new beds and suites of furniture between lettings. Not all rentals have to be furnished and there's a growing demand for empty houses and apartments, particularly from people who have sold off, and want to rent for a while before they buy.

• Trust your instinct when letting an apartment. Everyone wants a nice professional with a steady job but don't be blinded by corporate achievements.

A colleague had the misfortune of letting a city pad last year to a 30-year-old overseas lawyer after his appointment to one of the top legal firms. For all his impressive qualifications and aristocratic family background, he turned out to be bad news, leaving the sofa covered in burns from smoking pot and 144 empty wine bottles in the tiny kitchen. The bathroom and shower were filthy as were the floors. It took a full two weeks to clean, fumigate and repaint the apartment before it could be reused.

On reflection my colleague believes he should have let the city centre apartment to his first callers, two attractive young eastern European women who assured him that even though they did not have jobs "we will definitely make the rent for you". They were obviously in the thriving entertainment business.

• Sign up with a letting agent or two. A good agency will find you a tenant, and check their ID. They will ask for an employment reference, a bank reference and a reference from a previous landlord. Also, they will transfer the electricity or gas bills to the tenant, set up a standing order for rent, and filter requests. For this, you can expect to be charged a letting fee of between 5 per cent and 7 per cent, plus VAT at 21 per cent. This can work out at a month's rent or more. Agents will also charge you to renew a lease with an existing tenant.

• Or you could let it yourself. Websites like Daft, Gumtree and Myhome.ie have been a Godsend for landlords. Post up a notice and you could get an instant result or wait for the calls. You'll need to screen candidates over the phone, and then set up viewings. With so much supply out there, you're unlikely to have to deal with a queue of people down the stairs. Act like an agent and ask for a reference.

• Don't expect an instant result, unless your property is in a top location, or a very good deal to rent. According to Eileen Sheehy, city centre apartments are taking two to four weeks to rent, while suburban houses can take three to eight weeks. "It could take a month in Stillorgan, or a week in Bray, it just depends on the level of supply and demand in the area." In neighbourhoods with lots of apartments, like Sandyford, the letting times are even longer.

• Draw up a lease. You can download a sample lease from myhome2let.ie and fill in the blanks.

• Make an inventory of the contents and take a deposit of a month's rent. This is refundable to the tenant at the end of the lease. You have to expect normal wear and tear during a tenancy but, if there is real damage to the property, you're entitled to hold on to part or all of the deposit. Make sure that the tenant does not see the deposit as their final month's rent cheque.

• If you have a good tenant, nurture them. Even if they are paying you less than the market rate, a solid reliable tenant is worth a lot. If you want to put up the rent and they want a new sofa, then meet them halfway. It doesn't mean Christmas cards and bottles of wine, it just means being flexible. Not everyone wants a lease from the first to the last day of the month. Be prepared to write a lease that suits the tenant. With corporate rentals, it helps to include utilities in the lease.

• Broadband is vital and while usually a tenant's responsibility, you should know if it is available in your area. Allow tenants make themselves comfortable in your property. If they want to change the furniture around, fine. If they want to bring their own bed, remove your bed. It is their home, after all. Your tenant may turn out to be your friend - who knows, you may end up at a Baltic wedding someday. On balance though it's better to keep things fairly businesslike.

• Still, check your bank balance on a monthly basis to make sure that the rent is going through. It's amazing how many people discover halfway through the year that their tenant is paying erratically or not at all. Keep records: it's a business and should be treated as such.

• Buy a pair of rubber gloves, a plunger and a set of rods . . . unless your cousin's a plumber, or you can afford to pay someone else to handle maintenance for you. Be prepared to be hands on: your tenant won't be slow to call you when the washing machine breaks down, the central heating goes wild or the toilet backs up. Often in the middle of the night.

• Don't act the absentee landlord: if you are an owner in an apartment development or a housing scheme where owners are responsible for common maintenance, share in the responsibilities. If the common areas get rundown or facilities won't work because people aren't paying maintenance charges, the property and your rents will suffer.

• Do register with the Private Residential Tenancies Board (PRTB). It's the law and could be useful if you and your tenant fall out.

• Know your way around a lease. Pay tax on rental income. They (the Revenue) know where you live and in the long run trying to sidestep the law will cause you grief. The board's website, www.prtb.ie, has a lot of useful information for both landlords and tenants.

• Know where your tenant works. Okay, it sounds paranoid, but if they do a midnight flit owing you money, you'll want to try and find them. And if you don't have a clue where to look, you have no comeback.

• And finally, the good landlord thanks God and all the saints for the tenant (and they exist I promise) who lives live a church mouse, pays on time and never asks for anything that wasn't there in the first place.