Are landlords selling up ?

handlemaster

Theres been alot said about Landlords selling up. I noticed alot more pre 63 properties going up for sale in Dublin. Is this the start of profit taking ? Or is there issues coming for the multi house split I. E. Pre 63s

MarkAnthony

Some of us have been creeping out of neg equity and want to get the hell out of dodge given the monumental pain in the arse it is to be a landlord in Ireland.

I'm on a tracker and if I look at what I'm losing vs. having the much lower accom costs and security for the ten years I was in the gaffe I can rationalise taking an absolute shafting on buying at the height of the boom... just... if I squint a bit and look at it sideways. I also have a few quid to pay off my current mortgage in the new house or extend etc.

Anecdotal but it's boards :pac:

Might aswell give you some figures:

Bought at 295K , 190K left on mortgage, property now at around €200K maybe a little more/less. If the property hits €250K before apartments crash again I'll be dancing all the way to the estate agent!

Michael D Not Higgins

rossmores, if you can't be civil please do not post

draiochtanois

This post has been deleted.

Hollister11

If they can. My parents are looking to sell the house we live in now. They bought it at 650K, its valued at around 500K. if they could get 550 we would sell it.

I suppose my parents are lucky that they have two other rented houses that pay the mortgage, and sold on in 2008 a few months before the crash which cleared a lot of the mortgages.

Sleepy

I'm 99% certain that the property we're sale agreed on was being rented and almost all of the properties we looked at were rentals rather than privately owned homes. That might just be at the end of the market we could afford in North County Dublin (220 - 250k) but it would certainly seem to me that many landlords are cashing out alright. Quite understandable when you read a lot of the issues landlords have on this forum...

draiochtanois

draiochtanois wrote: »

This post has been deleted.

A lot of people are waiting until they can cover the outstanding mortgage and fees in the achievable sale price alright. This element will be glad to walk away as long as they're left with no debt.

handlemaster

Sleepy wrote: »

I'm 99% certain that the property we're sale agreed on was being rented and almost all of the properties we looked at were rentals rather than privately owned homes. That might just be at the end of the market we could afford in North County Dublin (220 - 250k) but it would certainly seem to me that many landlords are cashing out alright. Quite understandable when you read a lot of the issues landlords have on this forum...

That's interesting. I wondered if it was the pre 63 s been sold for some reason

Rew

We see tonnes of ex-rentals in the ads we are trawling through. Some pre-63 stuff but mainly boom investments.

_Brian

We're accidental landlords and will (would) cash out once prices rebound a bit more. We're on our second tenants since 2008 both have been absolutely brilliant tenants but we have just no interest in the whole rubbish that goes along with it.
How anyone who bought as investments thought there would be profit in renting is beyond me. Fine if you had 20 profitable lets and it was your full time job. But I've no interest to be home from a long days work to get a call that the boiler isn't starting up.

First chance and were out !

Near us the numbers of rentals has crashed. We didn't advertise when our first tenants moved out, we had maybe five families asking could they rent next.

draiochtanois

This post has been deleted.

indie warrior

I have one property rented with ras, same tenants for last 8 years, no hassle with them at all and rent paid into my account every month which just covers the mortgage. The problem is paying almost 52% tax on the full rental income, absolutely killing us and not sustainable ( there is only so much you can write off) so yes will sell when we come out of negativity

handlemaster

The mood on here is to sell

Greenmachine

No profit taking to be had in the pre 63 muti occupancy units, as a general rule, the condition of some will be worse than others.

2-3 years ago a place went up for sales in Drumcondra that was split in 5 one bed units pre 63. Some time between that development and when it went up for sales possible in dribs and drabs, 5 units became 14. When you are dealing with a property like that, it is not economically viable to bring it up to code by any mean and can't be change internally other than returning to original build even then, it is a massive untertaking.

handlemaster

Greenmachine wrote: »

No profit taking to be had in the pre 63 muti occupancy units, as a general rule, the condition of some will be worse than others.

2-3 years ago a place went up for sales in Drumcondra that was split in 5 one bed units pre 63. Some time between that development and when it went up for sales possible in dribs and drabs, 5 units became 14. When you are dealing with a property like that, it is not economically viable to bring it up to code by any mean and can't be change internally other than returning to original build even then, it is a massive untertaking.

I thought pre 63 s were exempt from planning and you can do what you want with them?

Carlos Orange

_Brian wrote: »

How anyone who bought as investments thought there would be profit in renting is beyond me.

I always thought the point was the rent paid the mortgage and you basically got free property. Even if it doesn't quite cover it you end up owning something after only paying a fairly nominal portion of the cost.

whippet

Accidental landlord here ... As soon as it came out of NE and surplus covered legal fees and a decent family holiday I bailed.

Even though the rent was approx 130% of the mortgage payment it wasn't worth it due to the hassle, risk of dodgy tenants, tax etc.

MarkAnthony

psinno wrote: »

I always thought the point was the rent paid the mortgage and you basically got free property. Even if it doesn't quite cover it you end up owning something after only paying a fairly nominal portion of the cost.

In theory that's the way it's meant to work but I'd guesstimate that 50% of Dublin apartments are accidental LL like myself who did stupid things in the boom.

Smart LLs would have already got in at the trough in 2011/2012 (IIRC) and that would be very small numbers as very little property was on sale.

Many of us are waiting to take advantage of the young and stupid :Pac: cos you never lose on property! Small time property investment needs to come to and end for everyone's sake really.

Eugene Norman

draiochtanois wrote: »

I think accidental landlords are likely to charge lower rents because they want to avoid hassle.

Professional landlords are more likely to want to maximise return.

My experience is the opposite.

Gator88

In short no. Real landlords are in it for life and we make a good living at it. The blow ins from the cheltic tiger era may have to bail because they bought at the wrong time but those of us who do this for a living Will be here for a long time yet

whippet

Gator88 wrote: »

In short no. Real landlords are in it for life and we make a good living at it. The blow ins from the cheltic tiger era may have to bail because they bought at the wrong time but those of us who do this for a living Will be here for a long time yet

Nobody doubts that ... However I got out as the hassle wasn't worth it and the returns on my time didn't make it worthwhile. My real profession pays much better without the stress

Eugene Norman

Eugene Norman wrote: »

My experience is the opposite.

They're fools then, if they're accidental landlords then they're screwed if the tenant decides to muck them around, would take months to sort the situation out and in the meantime how are they going to make their mortgage payments?

Better to get a good tenant and keep them until they can afford to sell up.

A professional landlord with multiple properties, not over leveraged, can afford to ride out any problems like this and so should keep rents at market rates all the time.

psinno

psinno wrote: »

I always thought the point was the rent paid the mortgage and you basically got free property. Even if it doesn't quite cover it you end up owning something after only paying a fairly nominal portion of the cost.

The idea is to cover the mortgage and make a profit on top aswell, that would be my plan if I was doing it.

Unfortunately with the crazy taxes this is very difficult to do, having to pay 51% tax on rental profit when also paying a mortgage is madness.

I personally really like the idea of having a property or two rented out on the side, I'd enjoy dealing with it and would hope to make extra money at it.

Hollister11

Robert Loose Radius wrote: »

The idea is to cover the mortgage and make a profit on top aswell, that would be my plan if I was doing it.

Unfortunately with the crazy taxes this is very difficult to do, having to pay 51% tax on rental profit when also paying a mortgage is madness.

I personally really like the idea of having a property or two rented out on the side, I'd enjoy dealing with it and would hope to make extra money at it.

20-30% would be fairer. You may 33% on all other profit from a sale of an investment, why can't that be the fee on profit made during an investment.

Hollister11

Hollister11 wrote: »

20-30% would be fairer. You may 33% on all other profit from a sale of an investment, why can't that be the fee on profit made during an investment.

I personally think the mortgage should all be tax deductible and the tax should only be payable on the actual profit.

Hollister11

Robert Loose Radius wrote: »

I personally think the mortgage should all be tax deductible and the tax should only be payable on the actual profit.

Thats even better.

yqtwqxqm

Dont forget PRSI / USC and all the other "Taxes" on landlords.
I know a lot of property investors and at a guess i think about 90% of them are getting out asap.

Marcusm

handlemaster wrote: »

I thought pre 63 s were exempt from planning and you can do what you want with them?

Pre 63 is shorthand for saying it was split into units before 1October 1964 (yes1964 not 1963). After that date planning law was introduced and splitting up or changing use required permission. I have looked at buying a number of pre 63s. When first sold after 1964 the seller makes a declaration as to how many units were in existence. Basically that's your "proof" that you're not in breach of planning law. One of them said 5, then the next time it was sold it was 7 on the declaration and then 6 when I was looking at it. Basically indicating that there was a planning problem. Most of them were protected structures (ie listed) so there was no 7 year immunity. Caveat emptir!

Bob24

Deleted User wrote: »

They're fools then, if they're accidental landlords then they're screwed if the tenant decides to muck them around, would take months to sort the situation out and in the meantime how are they going to make their mortgage payments?

Better to get a good tenant and keep them until they can afford to sell up.

A professional landlord with multiple properties, not over leveraged, can afford to ride out any problems like this and so should keep rents at market rates all the time.

That's been my experience with single property landlords. Once they can see you are paying the rent every month, sorting out issues yourself as much as possible rather than calling them with silly problems, and not causing any trouble, they tend to keep the rent low so that you stay in their property as long as possible.

It only works if both the landlord and the tenant are decent people though.

CollyFlower

I find It astonishing that 75% of Irish landlords are "accendital" landlords.

Uriel.

Another accidental LL here. Probably close to being out of negative equity but still at a loss of circa 80k. Won't be selling up until (if) that gap closes. Wouldn't be making any sort of profit. After tax I'm probably covering a little more than the remaining 25% of the interest plus about half the capital repayment.

It's all OK until you get a bad tenant and so far I've been lucky but if things went wrong I doubt I'd ever recover the "investment". Can't wait to get out of it

MarkAnthony

CollyFlower wrote: »

I find It astonishing that 75% of Irish landlords are "accendital" landlords.

Why? It's a terrible (okay that's over stating it) ROI compared to many safer alternatives. As Gator has pointed out you'd have to go back prior to the Celtic tiger to find sensible LL's in it for the return. The rest will be Post 2011 in Dublin and then probably only until the CGT exemptions ran out.

It's an iterative process - we'll get out from under (hopefully!) then it'll crash again, then the next lot will get out from under each taking a smaller and smaller loss. We might have something approaching a properly functioning market by about 2050 if we're lucky.

CollyFlower

MarkAnthony wrote: »

Why? It's a terrible (okay that's over stating it) ROI compared to many safer alternatives. As Gator has pointed out you'd have to go back prior to the Celtic tiger to find sensible LL's in it for the return. The rest will be Post 2011 in Dublin and then probably only until the CGT exemptions ran out.

It's an iterative process - we'll get out from under (hopefully!) then it'll crash again, then the next lot will get out from under each taking a smaller and smaller loss. We might have something approaching a properly functioning market by about 2050 if we're lucky.

The reason why I find it astonishing is because in my day landlords were renting and running a business and renting their property for less than a mortgage would costs... I guess a lot of landlords are changing sky-high prices now is because they know most renters have no hope of saving for a deposit.

MarkAnthony

CollyFlower wrote: »

The reason why I find it astonishing is because in my day landlords were renting and running a business and renting their property for less than a mortgage would costs... I guess a lot of landlords are changing sky-high prices now is because they know most renters have no hope of saving for a deposit.

Most LLs now regardless of how they came to be LLs are charging Sky high rents because it's basic supply and demand. The government are the ones screwing renters as it's the only way to keep the country running. Upto 50% of rental payments go to the exchequer in tax, it's the only way to effectively tax property at the rate needed to keep essential services running. That's not going to change anytime soon, the only hope is that during the next apartment price crash people are able to buy into property themselves and avoid this ridiculous tax burden.

Of course as soon as the scales tip something akin to the Council tax will have to be introduced to make up the shortfall.

CollyFlower

That's another thing I don't get, over 50% of rental income going on tax, that's just outrageous!

MarkAnthony

CollyFlower wrote: »

That's another thing I don't get, over 50% of rental income going on tax, that's just outrageous!

With one or two off LLs it's less of course and presumably people like Gator have incorporated to take advantage of tax breaks there. It doesn't diminish the fact that a huge portion of the country's bills are being borne, disproportionately, by renters.

athtrasna

CollyFlower wrote: »

That's another thing I don't get, over 50% of rental income going on tax, that's just outrageous!

Like with any other income, the more you earn the more you pay. The over 50% figure relates to people whose total income is taxable at the highest rate. Why should rental income be treated differently. Sure there are costs associated with being a landlord but there are costs associated with working too?

Former accidental landlord here. One of the happiest days of my life was when we evicted the last set of tenants and could get in to start to undo the damage they did.

Carlos Orange

CollyFlower wrote: »

That's another thing I don't get, over 50% of rental income going on tax, that's just outrageous!

I presume rental income is just being treated the same as other income and is liable to income tax and prsi.

MarkAnthony

athtrasna wrote: »

Like with any other income, the more you earn the more you pay. The over 50% figure relates to people whose total income is taxable at the highest rate. Why should rental income be treated differently. Sure there are costs associated with being a landlord but there are costs associated with working too?

Former accidental landlord here. One of the happiest days of my life was when we evicted the last set of tenants and could get in to start to undo the damage they did.

To be fair any other service provider, and I'm very fond of saying LL's should treat their businesses as such, can avail of lower tax rates by incorporation. I must admit to my discredit I spent much more time mentally undressing my Revenue Law lecturer than actually listening to what she was saying so I'm open to correction.

Godge

CollyFlower wrote: »

That's another thing I don't get, over 50% of rental income going on tax, that's just outrageous!

Why? The top rate of income tax plus USC is over 50%. Why shouldn't landlords with rental income not pay that on top of their regular income?

CollyFlower

Godge wrote: »

Why? The top rate of income tax plus USC is over 50%. Why shouldn't landlords with rental income not pay that on top of their regular income?

I don't know if you're being sarcastic or not, Godge.. 'reluctant landlords ' should be tax free, they're not in the profession to make a profit they're just trying to survive.

athtrasna

CollyFlower wrote: »

I don't know if you're being sarcastic or not, Godge.. 'reluctant landlords ' should be tax free, they're not in the profession to make a profit they're just trying to survive.

Maybe take that one to the taxation forum if you want to argue for such an exploitable loophole.

MarkAnthony

CollyFlower wrote: »

I don't know if you're being sarcastic or not, Godge.. 'reluctant landlords ' should be tax free, they're not in the profession to make a profit they're just trying to survive.

I'm not sure they should be tax free, I'm more than happy to pay my way but 100% interest relief would be a start, other business expenses get it.

We've seen the government take a decision that rent a room should be tax free so before you're flamed to a crisp it's not the most bonkers suggestion in the world. That said it has shown that people will still be greedy which is why I personally support renters being able to seek relief from tax on rental payments.

the_syco

handlemaster wrote: »

Is this the start of profit taking ?

IMO it's a general "f**k you" to the government who is screwing over the landlords. I'd wonder if having to accept anyone was the straw that broke the camel's back?

Deleted User wrote: »

They're fools then, if they're accidental landlords then they're screwed if the tenant decides to muck them around, would take months to sort the situation out and in the meantime how are they going to make their mortgage payments?

I doubt a lot of the accidental landlords will have enough experience to tell the difference.

Deleted User wrote: »

A professional landlord with multiple properties, not over leveraged, can afford to ride out any problems like this and so should keep rents at market rates all the time.

IMO, you only become a "professional landlord" when you don't owe money on the house you are renting.

CollyFlower wrote: »

I guess a lot of landlords are changing sky-high prices now is because they know most renters have no hope of saving for a deposit.

IMO, it's because they hope to cover the mortgage with the rent.

the_syco

CollyFlower wrote: »

'reluctant landlords ' should be tax free, they're not in the profession to make a profit they're just trying to survive.

Either they want to make a profit, or they make a loss. They sell now, they make a loss. They stay in the game to make a profit. And if they stay in the game, why should they do so without getting taxed?

CollyFlower

athtrasna wrote: »

Maybe take that one to the taxation forum if you want to argue for such an exploitable loophole.

I'm not Slab Murphy, I don't know anything about tax evasion or loopholes, I'm just saying I think reluctant landlords are being unfairly treated..

Eugene Norman

[Deleted User] wrote: »

They're fools then, if they're accidental landlords then they're screwed if the tenant decides to muck them around, would take months to sort the situation out and in the meantime how are they going to make their mortgage payments?

Better to get a good tenant and keep them until they can afford to sell up.

A professional landlord with multiple properties, not over leveraged, can afford to ride out any problems like this and so should keep rents at market rates all the time.

A professional landlord with multiple properties can afford some properties to be below market as he's making money anyway and a bad tenant could cost more in repairs. An amateur landlord needs to pay the mortgage.

Hopeful2016

CollyFlower wrote: »

I don't know if you're being sarcastic or not, Godge.. 'reluctant landlords ' should be tax free, they're not in the profession to make a profit they're just trying to survive.

Troll? Or an eejit?

CollyFlower

Hopeful2016 wrote: »

Troll? Or an eejit?

Banker or ****

Hopeful2016

CollyFlower wrote: »

Banker or ****

Definitely eejit!

ongarboy

Is the general consensus here that if you have a hefty mortgage on your investment property, that the preference would be to exit being a LL asap once you get out of negative equity?..... but that if you owned the property outright, remaining as a LL would be prudent (despite the 51% tax on all rent received)?

Reason I ask is that I'm in a position where I have savings sitting stagnant in bank accounts earning almost zero interest and I'm strongly considering purchasing an investment property (which I could buy outright) to rent out but my worst fear is nightmare tenants (especially when you read about all the horror stories on this forum). As you can gather I'm pretty risk averse, so the stock market is not something I want to indulge in either. So many friends and family tell me I'm mad for not buying property (I have my own principal residence) but when I read about threads like this with landlords selling up, maybe investment property isn't the be all end all?

Would all the acccidental LLs here continue on as such if they hadn't got mortgages on said properties?