The latest Central Statistics Office figures suggest house prices in Dublin are up 25% in the past year but there are still a large number of homeowners stuck in the negative equity trap since the collapse in 2007.

If you are on the wrong side of 38 and like so many bought your first home over ten years ago, which was a two-bed apartment, you are now most likely one of Ireland’s wave of 'reluctant landlords'.

Things were different in 2004 when you stepped onto the ladder; the property boom was in full swing and your new home was going to be a 3-4 year investment until you decided to sell it to the next eager batch of investors/first time buyers for about 50% more than you bought it.

After that, you had your eye on that house just outside the postcode where you grew up but would have been perfect for another few years. At that point, you would enough equity to move onto a road near your folks... Well that was the plan anyway.

Now it’s 2014 and the situation is decidedly different to your initial blueprint; the handy two-bed with the designated parking space is asking 40% less than what you paid. You’re recently married with one child and are contemplating a second home. However, things are a little cramped what with your new lodger's toys and you’d love a garden for the 3-week Irish summer…

Whilst prices in some areas have remained considerably low since the crash, there’s still no real liquidity in the Irish market. Even if you could get a loan you still have that big grey-brick elephant – along with a €550k mortgage – in your living room.

So you decide to jump ship, let your property and rent a house instead. How hard can it be…?

Well, you might want to consider the following six factors before you make your next move:

1. Can you do this yourself?

It’s at this stage you need to sit down and decide if you have the time, knowledge and patience to let/manage the property yourself or will you get a letting/managing agent to do the work for you? Do some research on any companies out there and ask your friends for their recommendations.

Fees will vary depending on who you talk to but traditionally you should anticipate paying between 5-7% of the annual rent for a letting-only service and between 6-10% for full management; these figures will also be subject to VAT. However service fees can be offset against your annual income tax. You will also now be liable for additional tax as any rent you receive is now classed as additional income. These cases vary so talk to your accountant for specific details.

These fees may seem high at first but it’s worth weighing up the service an agent provides – especially if you don’t fancy getting a phone call about a burst pipe in the middle of the night.

2. Prepare the property

Firstly you need to step back and decide what you’re going to bring with you and what you’re willing to leave for your tenant. Remember, that hand-carved Buddha you got on your honeymoon may seem cool and quirky to you but your tenant may not agree. If there is anything you have any emotional attachment to, take it out.

The house should be professionally cleaned and if required painted, preferably a neutral colour. Professional cleaners are always a good idea for the sake of €100 – they will pay close attention to the oven, extractor fans, fridges and bathrooms – the traditional areas tenants overlook when handing back a property. 

You are also legally required to have a BER cert, (Building Energy Rating) for the property to let or sell – prices vary but you should get an average three-bed house done for as little as €150.

3. Mortgage provider/home insurance

You are obliged to notify your lender that you will be renting out the property as technically your home is now a RIP (Residential Investment Property).

Likewise you should notify your insurance company and transfer your home contents as you will not be liable for the personal possessions of the tenants and they should be made aware of this in their lease.

4. Reference, Reference, Reference!

As you hold viewings you will meet a selection of people who will have an interest in your property, apart from the initial meeting and brief chat with whom can seem the right person, you should also request references and lots of them…

• Landlord reference – If they’re renting there should be no reason why you can’t get a written reference with a contact number, plus don’t be afraid to ask why they’re leaving their current property.
• Employer reference – Ideally your prospective tenants are in full time employment and should have no issue obtaining a written reference with contact details from their employer.
• Photographic ID – This should either be a passport or driver's license and in colour, don’t be afraid to ask to see the originals on receipt too.
• Bank statements / reference – This should be from whoever’s account the rent will be paid from. You should also be prepared as some tenants may have an issue with providing you with a copy of their bank statement. The reason you wish to see these is so you are clear there is a regular mandated salary coming into the account and the account is not constantly overdrawn as this could signify rent payment issues later.
• PPS / email/ contact no – All of this information will be required for the lease and for your PRTB registration

5. Lease

If you have decided to look after the property yourself, I’d strongly advise going to your solicitor for a current lease. It’s the bones of the tenancy and should there be any issues in the future it will be the first thing the PRTB will refer to. The number of people that look for help after a tenancy is gone wrong only to discover a photocopy of an out-of-date lease ‘a friend of a friend gave them’ is common.

6. Occupancy

On the day the tenant takes possession you should meet them at the property and run through it with them before you sign the lease. Note the condition of the oven, fridge, back garden etc., so everyone knows where they stand from the get-go.

All parties will sign the lease and you should have the tenant sign a standing order form for the rent, at this stage you will also receive the first month’s rent to go with the security deposit – the deposit should be lodged into a secure unused account as this will be returned to the tenant once all is ok when they decide to vacate.

So, before you set sail for pastures new be sure you have all of the above covered, otherwise if you want to play landlord you might just want to stick to the monopoly board.

Richard Farrell is letting / managing agent with Haden Properties.