Will rent controls effect the general quality of rentals in the long run

Graham

GGTrek wrote: »

A big list of common misconceptions wrote down by someone who has probably never managed property.

Hey GGTrek, would you mind fixing up the quote tags in your previous post please.

You're definitely not quoting me there

Murrisk

Look, there are things that can be done to to help landlords but even with those brought it, there are no guarantees of profit at all. And no, they are not the same as any other business, there is a lot less a landlord can do to grow their business, it is very much just dependent on supply and demand. You can't make tenants pay more than they need to in order for you to profit. If there are similar options out there for cheaper, they'll go for those.

Another poster seems to interpreted my viewpoint as me not wanting landlords to profit. That's not the case at all. If a landlord profits, jolly good. But I don't understand why people are getting so het up at the suggestion that profit is hard to come by as a landlord and less can be done about to remedy that lack of profit than in other types of businesses. Lack of profit is not just down to high rates of taxation and rent controls. At some point market rent will fall below the enforced rent controls.

And the rents that were being asked before the controls came in were an aberration, they couldn't and shouldn't stay like that forever. For landlords to continuously profit, rents would need to remain at a preposterous level. Obviously anyone who is a landlord would want them to remain at such a ridiculously high level but they are partial. Anyone else will want them to come done to a more sane level where people are handing over no more 25% of their salary in rent. People that I know who are on good salaries are finding it tough to pay the current rents in Dublin - there's something wrong about that. Dublin is not New York. What, so a landlord can't charge €800 per month for a bedroom in a shoebox apartment now? Cry me a river.

Graham

Murrisk wrote: »

And the rents that were being asked before the controls came in were an aberration, they couldn't and shouldn't stay like that forever. For landlords to continuously profit, rents would need to remain at a preposterous level. Obviously anyone who is a landlord would want them to remain at such a ridiculously high level but they are partial. Anyone else will want them to come done to a more sane level where people are handing over no more 25% of their salary in rent. People that I know who are on good salaries are finding it tough to pay the current rents in Dublin - there's something wrong about that. Dublin is not New York. What, so a landlord can't charge €800 per month for a bedroom in a shoebox apartment now? Cry me a river.

You're ignoring the fact that rents are high in part because of high property costs. When you legislate for low rents in a high-price property market the outcome is going to be less properties for rent.

Samuel T. Cogley

Murrisk wrote: »

Look, there are things that can be done to to help landlords but even with those brought it, there are no guarantees of profit at all.

Cry me a river.

None of us are asking for help. There are massive amounts of BTL debt in distress. Even the most ardent pro-landlord people would be tell someone with a distressed BTL it's their own fecking fault. What many of us object to is the constant cycle of hinder, blame, hinder, blame.

LL's have not caused this issue - Dublin's rental scene is a majority of individual sole traders paying HUGE amounts of tax into the system like no other business does. We're not looking for help, we're not looking to rent slums, we're looking for the government to simply get out of the way and stop messing about with the market and blaming US for not supplying social housing.

We've given you the fecking money in tax, we can't control where it's spent.

I love Sean nos

wordofwarning wrote: »

A lot of smart landlords, know that if you buy quality it lasts. A German made Bosch lasts twice as long as a cheap British machine for marginally more.

It does if its taken care of. The best care is normally given by the owner. The tenant isn't the owner.

Murrisk

Graham wrote: »

You're ignoring the fact that rents are high in part because of high property costs. When you legislate for low rents in a high-price property market the outcome is going to be less properties for rent.

I'd imagine there is a solution that doesn't involve charging €800 a month for a tiny room in a crappy apartment. And while that solution is being figured out, rent controls for all. Landlords won't be happy but everyone else will. You won't find many people who are sympathetic to a landlord who can't charge the above amount. Is that populism or just plain common sense?

Graham

Murrisk wrote: »

I'd imagine there is a solution that doesn't involve charging €800 a month for a tiny room in a crappy apartment. And while that solution is being figured out, rent controls for all. Landlords won't be happy but everyone else will. You won't find many people who are sympathetic to a landlord who can't charge the above amount. Is that populism or just plain common sense?

Awesome, do you want to share the solution to high property costs when tenants want low rents?

Here's a hint. Forcing landlords into an economically unsustainable business model is not going to be doing tenants any favours.

Samuel T. Cogley

Murrisk wrote: »

I'd imagine there is a solution that doesn't involve charging €800 a month for a tiny room in a crappy apartment. And while that solution is being figured out, rent controls for all. Landlords won't be happy but everyone else will. You won't find many people who are sympathetic to a landlord who can't charge the above amount. Is that populism or just plain common sense?

This is just plain rubbish. LLs simply exit the market and supply dwindles even further. I started very anti-airBnB oh how things change with even the smallest amount of experience.

Electric Sheep

http://www.independent.ie/business/personal-finance/property-mortgages/charlie-weston-it-may-not-be-a-bubble-yet-but-make-no-mistake-there-is-trouble-ahead-35682554.html
"Some 20,000 buyers, both first-timers and a small number of investors, were given the green light to borrow over the last year.
Around 18,500 houses will be built this year, according to calculations by Goodbody Stockbrokers economist Dermot O'Leary.

But most these are set to be self-builds that will not be available for new buyers and movers desperate to make a down-payment on a new home.
That means only about 10,000 new properties will be available for potential new buyers"
Sounds like landlords leaving the business in droves will be very good news for some of those 20,000.

athtrasna

A reminder that this thread is about the quality of rentals and the effect of the rent control law on them. There's a general property market thread for property market chat

Mod

Murrisk

Graham wrote: »

Awesome, do you want to share the solution to high property costs when tenants want low rents?

Here's a hint. Forcing landlords into an economically unsustainable business model is not going to be doing tenants any favours.

Samuel T. Cogley wrote: »

This is just plain rubbish. LLs simply exit the market and supply dwindles even further. I started very anti-airBnB oh how things change with even the smallest amount of experience.

How much higher do you want rents to go? They are already at farcical levels. A short-term measure was needed and we have it.

Rents should not be as high as they are. What did landlords do when rents were much lower? Isn't there something wrong when rents needs to be so high for landlords to profit? Does that tell you that there is something wrong? Lowering taxation would be something that would help an awful lot. A few other things people have mentioned to. But, as said, even with all these measures brought in, landlord are at the mercy of the state of the economy and the attendant effect on supply and demand. If landlord throw their toys out of the pram and leave the market because they are not profitting, they didn't do their homework. Property rental has never given a guarantee of profits, why would any entering into it expect that?

Property rental has been compared to other businesses in this thread. Well, let me ask you this - how many people who buy an investment property do up a detailed business plan for this business? A feasability study? I'd imagine very few. I'd imagine if they did, they would realise that it is not an area that guarantees profit a lot of time. I'm afraid this thread confirms to me that many who own property have unrealistic expectation about thw returns they will get and become indignant when anyone suggests they are dreaming. And it's not as if there are no benefits to renting out a home if you don't make a profit. You need to put up capital at the start but unless you are very unlucky, you will recoup that if you decide to sell. On top of that, you get a helping hand towards your mortgage payments. So when you sell up, you will be in the black compared with what you contributed towards mortgage payments in times of not breaking even. You will indeed have made money from the property but it is a long-term investment. You want to make money on selling AND also profit? OK but that's not a guarantee at all and luckily many landlords seem to recognise this. I will never feel sympathy for a landlord not being to charge extornionate rent on a small room in a shabby houseshare. You'd be hard-pressed to find anyone who would really. Why do you think that is?

The plan hopefully seems to be to increase housing supply so that there is more property for people to buy to either live in or rent out. This will cause rents to drop and probably to lower levels than they are at now. Good news for anyone buying a rental property at the time the supply increases. But what of the property owners who are currently complaining that they can't charge crazy rents? How will they manage when the rents are so much lower? Maybe if you can't profit currently, you should sell up. That would increase housing stock available to buy which would help to lower house prices which would mean less people renting which will help lower rents. And the person selling gets a good price for their house and, amazing as it seems, will see a return on their investment. Imagine! Seeing a benefit to owning an investment property that doesn't involve monthly profit!

Murrisk

Electric Sheep wrote: »

http://www.independent.ie/business/personal-finance/property-mortgages/charlie-weston-it-may-not-be-a-bubble-yet-but-make-no-mistake-there-is-trouble-ahead-35682554.html
"Some 20,000 buyers, both first-timers and a small number of investors, were given the green light to borrow over the last year.
Around 18,500 houses will be built this year, according to calculations by Goodbody Stockbrokers economist Dermot O'Leary.

But most these are set to be self-builds that will not be available for new buyers and movers desperate to make a down-payment on a new home.
That means only about 10,000 new properties will be available for potential new buyers"
Sounds like landlords leaving the business in droves will be very good news for some of those 20,000.

Exactly! Landlords leaving in their droves in not exactly a bad thing, it means less people need to rent, there is more housing stock available for purchase.

4ensic15

Murrisk wrote: »

How much higher do you want rents to go? They are already at farcical levels. A short-term measure was needed and we have it.

Rents should not be as high as they are. What did landlords do when rents were much lower? Isn't there something wrong when rents needs to be so high for landlords to profit? Does that tell you that there is something wrong?

High rents are a symptom not a problem. If rents are too high the solution is to do something about supply. back when Ireland had its own currency, the central bank intervened in the currency markets from time to time to keep interest rates from moving erratically.
the same should happen with the housing supply. The rent cap is a symptom masking exercise which will not work.

The_Conductor

The government are making soothing noises about assisting with supply- however, this 'supply'- is years down the road- when both tenants and landlords are crying for supply right here, right now- today (landlords want supply- as there will no longer be any excuse for market interventions by the government- even if it does mean rents falling- its preferable to have falling rents, than the quite remarkable intervention we have today- however, there is of course a presumption that proper safeguards against overholding etc- are introduced- hopefully alongside tax reforms.........

Rent controls- are of course affecting the general quality of rentals- getting back to the title of the thread- alongside stiffling the absolute number of units in the rental sector.

The CSO says there are now 20,000 people with mortgage approval, chasing 10,000 properties. Ok- rent controls may boost this supply a little- but in the scale of things, its marginal- and of zero interest to first-time-buyers.

Murrisk

Murrisk wrote: »

And as I said above, it is not a business like the one someone runs day-to-day and works hard at to make successful. It's sitting on your hoop hoping income is higher than costs.

That is utter nonsense, there is lots of work in running a rental business of one house, never mind professional LL with 10's or 100's or properties.

There are also plenty of other bunsinees where people don't have to do much, for a start successful business just pay staff to do the work.

Also you said in another post "rents are sky high" but the market is dictating this is where they should be so you cannot say "they are not where they should be". Rents are exactly where they should be, well except they are too low for LL caught short by the new rental laws or very foolish LL who didn't always keep their rent at the max.

Samuel T. Cogley

Murrisk wrote: »

Exactly! Landlords leaving in their droves in not exactly a bad thing, it means less people need to rent, there is more housing stock available for purchase.

People will always need to rent for a myriad of reasons. If what you're suggesting above was the case then there is a simple solution simply buy now a mortgage is likely to be much lower than rent.

As for how high do we want rents to go that's not down to LLs that's down to the market, what about this do you not understand? What did LLs do before? Did you miss the part about how much distressed BTL debt out there?

You simply have not thought this through. Parking all of that, it's private property, the only other right that gets a double constitutional protection is the person. The most basic law of the land says private property should not be interfered with. How would you like it if it was decided that your laptop/car or bike is needed more by someone else and arbitrarily taken away for a few weeks, you'd be rightly pissed off.

Murrisk

Kehlani Greasy Ringworm wrote: »

That is utter nonsense, there is lots of work in running a rental business of one house, never mind professional LL with 10's or 100's or properties.

There are also plenty of other bunsinees where people don't have to do much, for a start successful business just pay staff to do the work.

Also you said in another post "rents are sky high" but the market is dictating this is where they should be so you cannot say "they are not where they should be". Rents are exactly where they should be, well except they are too low for LL caught short by the new rental laws or very foolish LL who didn't always keep their rent at the max.

No, rents should be at a level where the average worker needs to hand over no more than 25% of their income for a roof over their head. Rents are where they should be? Are you joking? Of course anyone who is a landlord wants it higher than that but it's not what shoud be striven for. Other countries manage to keep rent at a sane level, we need to figure out how that is done.

Murrisk

Samuel T. Cogley wrote: »

How would you like it if it was decided that your laptop/car or bike is needed more by someone else and arbitrarily taken away for a few weeks, you'd be rightly pissed off.

Who is taking away your property?

mrslancaster

Murrisk wrote: »

Other countries manage to keep rent at a sane level, we need to figure out how that is done.

maybe unfurnished, a six months bond, speedy resolution to deal with over holding or rent arrears or damage..?

that would seem to be the model in other countries...:)

rsynnott

mrslancaster wrote: »

well how nice it would be to have my home kitted out with top of the range appliances & furniture & then let someone else have the headache of replacing or repairing them when they break through careless usage...

it would be great to be able to phone someone & have anything that's wrong sorted at no cost whether it was a smart or not so smart landlord..!

people buying their own home & paying a huge mortgage do not have that luxury - they have high monthly bills & have to take care of all repairs or replacements as well.

don't get me wrong , people make those decisions freely but it gets very annoying when tenants have this victim or 'poor me' attitude. its very one sided IMO & i' m sorry we just didn't rent in a controlled area, it seems it would be a much better option all round, no worries except pay the monthly rent when its due, happy days

You may have missed the context. I was responding to a post claiming that smart landlords bought high quality appliances because they in principle have lower long-term costs. This does on the face of it make sense; the cheap ones seem to be practically disposable items. It doesn't seem to actually happen much, though. You can calm the righteous indignation.

Graham

Murrisk wrote: »

No, rents should be at a level where the average worker needs to hand over no more than 25% of their income for a roof over their head.

You keep missing the point. That's not decided by landlords, it's largely determined by supply of property for sale at a price point to support your figures.

Murrisk

4ensic15 wrote: »

High rents are a symptom not a problem. If rents are too high the solution is to do something about supply. back when Ireland had its own currency, the central bank intervened in the currency markets from time to time to keep interest rates from moving erratically.
the same should happen with the housing supply. The rent cap is a symptom masking exercise which will not work.

It will work for the renters who don't have to pony up extortionate rent. It is seriously effecting people's ability to save currently. And as someone else said up-thread, the standard of rental properties in Ireland is poor as it is. From my experience, most landlords do the bare minimum anyway. How much worse can it get? Dramatic pronouncements from landlords on here sound like little more than foot-stamping. Lads, rentals aren't generally in good nick anyways, to do less to them would mean letting them fall into abject disrepair which seems counterproductive. And there are things that you are required to provide, you won't be able to weasle out of those obligations.

And leaving the market? In that case, an LL will either sell, releasing the house to the property market OR just leave it empty, in which case they have questionable business skills. Not getting enough in rent, so lets take in NO rent? Yeah, yeah, AirBnB. That will soon require planning permission and might already actually. And even if it didn't, a mass exodus to AirBnB would mean reduced business for everyone who does it. I would think there is not endless business to go around on AirBnB.

Samuel T. Cogley

Murrisk wrote: »

Who is taking away your property?

This legislation takes away my profit which is interfering with my property rights. A similar measure in the 80's IIRC was found to violate a person's right to private property by the Supreme Court.

It's no different than saying to someone that €15K is too much for a car and they have to sell it at €11K. It's not different from saying Murrisk we've decided you need your computer less than this lad we're giving it to him for a bit.

I'm in the relatively happy position (touch wood) of having good tenants and a property which just about breaks even. How do you think it's fair that I should not be allowed to make a profit on it if that what the market dictates? Will you be there to pick up the tab when the market circles around and it's loss making time again? Or if I have a tenant in there who doesn't pay for a year while I spend €20K getting them out and repairing the damage?

Murrisk

Graham wrote: »

You keep missing the point. That's not decided by landlords, it's largely determined by supply of property for sale at a price point to support your figures.

Well, all those landlords leaving the market because they can't charge extortionate rents will free up some housing stock for potential buyers who don't want to be renting. Sweet!

Graham

Murrisk wrote: »

Well, all those landlords leaving the market because they can't charge extortionate rents will free up some housing stock.

That's going to screw the remaining renters further, that whole lack of supply thing that you just can't seam to get.

Murrisk

Samuel T. Cogley wrote: »

How do you think it's fair that I should not be allowed to make a profit on it if that what the market dictates? Will you be there to pick up the tab when the market circles around and it's loss making time again? Or if I have a tenant in there who doesn't pay for a year while I spend €20K getting them out and repairing the damage?

Well, I have no problem with better mechanisms to deal with problem tenants. But do I feel sorry for someone not being able to charge €1600 a month for a crappy two bed apartment? Not even a little bit.

Graham

Murrisk wrote: »

It is seriously effecting people's ability to save currently.

??

This is getting absurd. Should we also force local butchers to sell below cost in case it prevents people saving?

Murrisk

Murrisk wrote: »

No, rents should be at a level where the average worker needs to hand over no more than 25% of their income for a roof over their head. Rents are where they should be? Are you joking? Of course anyone who is a landlord wants it higher than that but it's not what shoud be striven for. Other countries manage to keep rent at a sane level, we need to figure out how that is done.

House prices are high so rents have to be high. A monthly rent should always be more (considerably so) that a mortgage repayment. This has to be the case to make letting property viable. Do you think a shop can stay in existence if they are selling their goods at less than they paid for them? No of course not so why should it be different for a property.

Yes rents are where they are becuse the market has dictated this. High property prices, low supply, tenants having too much power, losses to be recouped from the recession etc have decided the market price should be where it is. Except of course for where LLs are being robbed of the market rate by the rent caps.

Murrisk

Graham wrote: »

That's going to screw the remaining renters further, that whole lack of supply thing that you just can't seam to get.

You are talking like the supply issue will never be addressed. I believe it will. And if some renters leave the market because they can buy, that would mean the amount of supply per renter would remain pretty much static. Property leaves the rental sector but so do renters. Less properties but less renters to compete for property. So, it doesn't really change anything for the worst for renters.

Samuel T. Cogley

Murrisk wrote: »

It will work for the renters who don't have to pony up extortionate rent. It is seriously effecting people's ability to save currently.

Then allow 100% mortgages - just one potential solution that doesn't involve hitting LL's twice for money AND then blaming them for the situation which is not their fault.

Murrisk wrote: »

And as someone else said up-thread, the standard of rental properties in Ireland is poor as it is. From my experience, most landlords do the bare minimum anyway.

That might be your experience, I can assure it's not the experience of my tenants.

Murrisk wrote: »

How much worse can it get? Dramatic pronouncements from landlords on here sound like little more than foot-stamping.

Some of us get quite passionate about this because people like you get to vote. You keep perpetuating this nonsense because of your own begrudge and surface level understanding of the problem. Yes we should seize the means of production comrade, but one bowl of gruel at a time is not the way to do it. Deal with the root of the issue, supply and social housing policy. The market will deal with slumlords.

Murrisk wrote: »

Lads, rentals aren't generally in good nick anyways, to do less to them would mean letting them fall into abject disrepair which seems counterproductive. And there are things that you are required to provide, you won't be able to weasle out of those obligations.

See the begrudgery point.

Murrisk wrote: »

And leaving the market? In that case, an LL will either sell, releasing the house to the property market OR just leave it empty, in which case they have questionable business skills. Not getting enough in rent, so lets take in NO rent? Yeah, yeah, AirBnB. That will soon require planning permission and might already actually. And even if it didn't, a mass exodus to AirBnB would mean reduced business for everyone who does it. I would think there is not endless business to go around on AirBnB.

I'm banging my head against a brick wall here clearly. What part of there being property to buy right now is passing you by? What part of it being cheaper than renting ergo there are a cohort of people that either can't or shouldn't or don't want to buy is a mystery?

As for AirBnB, the short term market is in as much of a mess as the medium term and purchasing market. There is plenty of scope for thousands of units to be turned over to AirBnB and there still be more needed at peak time.