Landlord increased rent 50% after we moved out

Wailin

GGTrek wrote: »

No, the OP is of the envious and vindictive type. He/she will probably gain absolutely nothing.

Nope. He is an upstanding citizen reporting a parasitic landlord.

Most get away with this crap. Well done op, report it.

RCSATELLITES

Why don't we punish the insurance companies for increasing motorists premiums by upto 70% and why don't we punish the developers looking for more than double since 2013. You will day that's competition well so is renting. This law on curbing rent increases is actually illegal.

Also let's punish the banks for charging 3 times interest rates in Ireland compared to the rest of Europe.

The government will say they can't, cause they are afraid of banks, insurance companies and developers but the small time landlords let's get them that's easy.

rgace

RCSATELLITES wrote: »

The government should not be restricting rents it has nothing to do with them, what they should be doing is reducing the 50% tax they charge the landlords so they don't have to charge so much to make a decent profit.

Surely landlords will keep charging the highest possible rent they can achieve irrespective of their rate of tax.

AlmightyCushion

rgace wrote: »

Surely landlords will keep charging the highest possible rent they can achieve irrespective of their rate of tax.

This. If the government slashed taxes on rent and removed rent controls, I can't see many landlords giving rent reductions. It would be quite the opposite if anything.

Bob24

rgace wrote: »

Surely landlords will keep charging the highest possible rent they can achieve irrespective of their rate of tax.

Yes in a tense market such as the one we are in today it is quite clear that prices are not set by landlords' cost of running their business, but rather by high demand. So any tax cut will end in the landlords pockets and not benefit tenants.

It doesn't mean that a tax cut is necessarily a bad idea, but as you said it would be naive to think it would result in rents reduction.

A possible negative side-effect also is that it would possibly push-up property purchase prices in easy to rent areas as investors would see higher net rental yields - which might be counter productive if the idea is to help people move from rental properties into their own properties.

mickoneill31

rgace wrote: »

Surely landlords will keep charging the highest possible rent they can achieve irrespective of their rate of tax.

Of course. But maybe more landlords would exist rather than leaving in droves. That'd increase competition.
I looked at investing in a rental property a couple of years ago. There are much better and less risky returns elsewhere. Anybody who buys a property to rent out now is somebody who isn't that great in maths.

The_Conductor

rgace wrote: »

Surely landlords will keep charging the highest possible rent they can achieve irrespective of their rate of tax.

There are various models for structuring the treatment of rental income in different EU countries. The manner in which its structured- has a strong correlation with rent levels. This could be managed by many different methods- such as the rent-a-room scheme model for PPRs in Ireland- to the 2% rule in Germany (2% of the value of property is considered a tax free allowance for rental income for residential property).

In Ireland- we have a two tier system- we don't tax the REITs (at all)- and we slaughter small landlords. If there was a straight tax (25% or whatever) on gross rental income- across the board- and the sums generated were ring fenced and ploughed back into social housing/local authority housing- I think we could have a system that everyone would be reasonably happy with.

The current system perpetuates inequalities- and actively promotes and financially incentivises REITs and large scale landlords- at a cost to both tenants and other landlords- while simultaneously punishes any landlords who had decent tenants who voluntarily did not increases their rent in recognition of the good relationship they had with their tenants- they put a price on the goodwill associated with these tenants- and this 'goodwill' is now being demanded as a right by those who did not earn it.

If we were to be fair- there would be a rating system for good tenants- and they could carry their goodwill with them to subsequent tenancies- whereas new tenants would have to earn goodwill over time. Its like the new products on the market- you get different rates on car loans, credit cards or other financial transactions- based on ICB rating- which you carry with you as you buy services elsewhere (and it can go up or down depending on your history.

The current system- does not work.
Landlords are actively leaving the sector.
The only reason it was bumped up in 2016- was with the inclusion of the housing associations as individual new landlords.
The housing associations were an off-book exercise- to keep their borrowings off the national debt. This has failed (on the same grounds as Irish Water failed- they are majority funded by the exchequer)- and the Irish government has been told they are to be included in the central returns going forward.

We have played mind games with our national finances- and been caught out.

Treshold and others- wanted REITs- well, they have them now- but they don't like the rent levels they're charging- we were told the rent levels would be lower for new tenants- because of the favourable tax treatment for the REITs- well, the REITs have proven to be far more mercenary than the previous generation of landlords- who were willing to offer discounts to decent tenants- the current crowd are a take-it-or-leave-it bunch of faceless entities- who you can't bargain with.

The rent-control/rent-certainty was a mechanism to tame rent in the sector.
Its lead to tenants vastly increasing their average length of tenancies- which if it were a natural occurence, would be great- but its keeping a lot of people in units- purely because they're terrified to move elsewhere. It also means there are a large cohort of landlords out there- who have decent relationships with pre-existing tenants- who are supposed to offer these terms to new tenants- with whom they have no relationship whatsoever. Like what?

The Minister himself has said the rent-certainty measures are unfair- and the basis of any taxation or controlled market- is it has to be viewed as equally applicable and equitable to all providers or consumers in a sector (its actually one of the pillars of taxation- it has to be viewed as equitable- or at least not so vastly inequitable- that it fails). The experiment in the housing sector- has failed- primarily because the pendulum has swung entirely in one direction. Its all well and good saying- well, terminate the tenancy of a tenant who doesn't pay rent- but if they have no-where else to go, and the local authority housing officers- and threshold are both telling them to overhold- its entirely meaningless. Yet- they'll still end up on the street- if the landlord doesn't pay the mortgage or the other bills.

We want a social housing scenario in Ireland (apparently)- but the public sector do not want to provide it, accept the risk associated with it- or, pay for it. Its the ultimate have your cake and eat it.

We *need* more housing units in direct local authority control. We need to close off the sale of local authority housing units- in the same manner that Scotland did last year (we copied the Scottish system bringing our own system on stream originally- but its now been seen to be an abject failure)- we need to get vast quantities of new units into public ownership- and we need to treat all tenants and landlords equitably.

It suited the Irish government to abdicate its responsibility to house those incapable of housing themselves- to the private sector. Well- it hasn't worked. We need to accept it hasn't worked- and be grown up about it- and try something else. Some aspects of the current system are useful and do work. Keep them- but marry them to aspects of the system of public ownership- that have also been shown to work. We started down this road- with the housing associations- but didn't bring it to central control/ownership- which we're now getting foisted on us anyway- so perhaps its an opportunity to embrace change?

Bob24

The_Conductor wrote: »

In Ireland- we have a two tier system- we don't tax the REITs (at all)- and we slaughter small landlords.

That is a different matter than just reducing taxation for individual landlords as discussed before in the thread, and I completely agree with you it doesn’t make sense and should be addressed.

I don’t believe reducing the overal taxation level on rental money in the country would do any good, but I would definitly be in a favour of rebalancing it and transafering some of the burden from individual landlords to REITs.

Andrew Beef

I’m no fan of the REITs, but if we start moving the goalposts and changing the rules once they’re here, we risk permanently damaging Ireland’s reputation as a place to do business. That jeopardises further inflows. Lest we forget, the REITs invested in Ireland when nobody else would. Now they’re coining it, people are jumping up and down about it.

TheChizler

The_Conductor wrote: »

In Ireland- we have a two tier system- we don't tax the REITs (at all)- and we slaughter small landlords. If there was a straight tax (25% or whatever) on gross rental income- across the board- and the sums generated were ring fenced and ploughed back into social housing/local authority housing- I think we could have a system that everyone would be reasonably happy with.

The shareholders of the REIT certainly wouldn't be happy. While a REIT might not be subject corporation tax on rental income itself, 85% of the net rental income must be paid back to shareholders as dividends, who are then subject to the exact same tax as any other investor. While it might work out more expensive for a single property landlord %-age tax-wise than an investor in a REIT, it's not quite as bad as them paying 0 tax as your post makes out.

_Brian

Surely it’s impossible to comment on this without knowing the rent OP was paying and the average rent in the area.

Surely the LL is entitled to have the average rent in the area he is renting his property in.

This is exactly why LL are selling property and less and less is available.

I rent out a property in a non controlled area and the current tenants are there 5 years and with no increases are paying well below the average rate.

Seems my best move is just jack up the rent to the average to prevent being caught out should there be any changes. It would be about 50% increase.

Being a LL in this country really sucks.

Andrew Beef

_Brian wrote: »

Surely it’s impossible to comment on this without knowing the rent OP was paying and the average rent in the area.

Surely the LL is entitled to have the average rent in the area he is renting his property in.

This is exactly why LL are selling property and less and less is available.

I rent out a property in a non controlled area and the current tenants are there 5 years and with no increases are paying well below the average rate.

Seems my best move is just jack up the rent to the average to prevent being caught out should there be any changes. It would be about 50% increase.

Being a LL in this country really sucks.

Given what’s happened to landlords elsewhere, you’re insane not to jack-up the rent to the market rate ASAP.

I was like you and had kept the rent low because I’d a degree of sympathy for my tenants and didn’t really need 48% of the rent increase. Luckily I got it up to market rate when they left.

RCSATELLITES

It's funny when somebody tries to do better than the 9 to 5 job they get fleeced by the government and the public complain all the time. Are you saving money we will have 37% of that are you investing in funds we will have 41% of that. You have an extra property will will have 50% of that.

Landlords or people that rent out their property yes their property to individuals that can't afford houses or would be homeless or jist dont want to buy yet should actually be thanked for providing places for people to live.

Let's hear a thanks to the landlords for providing places to live for ordinary people.

Also when there was an abundance of properties and very low rents during the recession. No body seemed to complain that landlords were not getting enough rent to cover there mortgage.
Why did the government not lower their taxes to help landlords, why did the government not top up the rent to what the landlord should of got.
Yes the government tops up the road toll companies when not enough cars pay the toll.

Wailin

RCSATELLITES wrote: »

Let's hear a thanks to the landlords for providing places to live for ordinary people

Nah lets hear a thanks to the government (for once) in preventing ordinary people from getting raped by landlords for, in many cases, substandard rental property.

For all those landlords on here complaining why the government won't do the same for spiralling insurance costs...dont forget that insurance is a once a year payment. Most landlords in Dublin overcharge for their property by about the average cost of a car insurance (500-600 euro) EVERY MONTH. Nothing but greed.

davo10

Wailin wrote: »

Nah lets hear a thanks to the government (for once) in preventing ordinary people from getting raped by landlords for, in many cases, substandard rental property.

For all those landlords on here complaining why the government won't do the same for spiralling insurance costs...dont forget that insurance is a once a year payment. Most landlords in Dublin overcharge for their property by about the average cost of a car insurance (500-600 euro) EVERY MONTH. Nothing but greed.

Are you saying they are overcharging over and above the 4% RPZ limit by €5-600 per month? Have you evidence that "most" are?

If you are saying rent in general is being charged €5-600 over what it should be, on what are you basing the figure it should be? Is it what you personally think should be charged?

TomOnBoard

Melissa Large Raccoon wrote: »

Move on, the LL was unfairly stuck on below market rent due to idiotic laws introduced by the government he could very well be struggling with his mortgage etc. What are you going to gain for reporting him?

The sooner rent controls are scrapped the better and it will solve all these issues around how much rent can be increased over night, increases will be capped at what people are willing to pay which is how the market should operate.

How does a LL bring rents up to market level in a RPZ if the rent has been well below market for years? Is the LL expected to maintain an very uneconomic rent just because s/he was being helpful/generous in the past?

TomOnBoard

Wailin wrote: »

Nope. He is an upstanding citizen reporting a parasitic landlord.

Most get away with this crap. Well done op, report it.

Harsh!

In a property rental situation, who is the parasite and who is the host? If you're the LL and your tenant's payments don't cover the costs and give a fair return on investment, then surely the LL is the host and the tenant is the parasite??

TomOnBoard

Bob24 wrote: »

That is a different matter than just reducing taxation for individual landlords as discussed before in the thread, and I completely agree with you it doesn’t make sense and should be addressed.

I don’t believe reducing the overal taxation level on rental money in the country would do any good, but I would definitly be in a favour of rebalancing it and transafering some of the burden from individual landlords to REITs.

And for a start, a) allow 100% of loan interest on a rental property to be allowed against income and b) any losses incurred on a rental to be offset against other income.

These anomalies in the tax code are clearly focussed on punishing small landlords compared to how REIT's and large rental operations are treated.

GGTrek

Wailin wrote: »

GGTrek wrote: »

No, the OP is of the envious and vindictive type. He/she will probably gain absolutely nothing.

Nope. He is an upstanding citizen reporting a parasitic landlord.

Most get away with this crap. Well done op, report it.

Jaysus another vindictive type

Wailin

GGTrek wrote: »

Jaysus another vindictive type

No but I do wonder how someone can charge another person €1500 p/m for a one bed apartment in Dublin city.

TomOnBoard

Wailin wrote: »

No but I do wonder how someone can charge another person €1500 p/m for a one bed apartment in Dublin city.

Because that's the current price???

davo10

Wailin wrote: »

No but I do wonder how someone can charge another person €1500 p/m for a one bed apartment in Dublin city.

Easy. Property prices are such in Dublin that after tax, the monthly rental earnings may not cover the mortgage repayments.

Renting is a business transaction, a service is provided, remember that and you will understand how rentals work.

Wailin

davo10 wrote: »

Are you saying they are overcharging over and above the 4% RPZ limit by €5-600 per month? Have you evidence that "most" are?

Right at the start of this thread if you'd care to read. Tenant leaves property. Property then advertised at 50% increase. I'm sure tenant was paying a lot more than the cost of a car insurance before landlord decided to make a quick buck and double the rent.

davo10

Wailin wrote: »

Right at the start of this thread if you'd care to read. Tenant leaves property. Property then advertised at 50% increase. I'm sure tenant was paying a lot more than the cost of a car insurance before landlord decided to make a quick buck and double the rent.

I read that, but you said "most landlords", where are you getting that from?

Also, the op said they were there 4 years and LL recently tried to increase rent, chances are that the ops rent was considerably lower than current market rate.

TheChizler

davo10 wrote: »

Easy. Property prices are such in Dublin that after tax, the monthly rental earnings may not cover the mortgage repayments.

Renting is a business transaction, a service is provided, remember that and you will understand how rentals work.

Why should they necessarily cover mortgage repayments? As long as rental expenses are covered and mortgage interest is paid they're then paying towards ownership of an asset which means profit when it comes to selling unless there's a massive crash or something, the long term investment is also part of the business model.

davo10

TheChizler wrote: »

Why should they necessarily cover mortgage repayments? As long as rental expenses are covered and mortgage interest is paid they're then paying towards ownership of an asset which means profit when it comes to selling unless there's a massive crash or something, the long term investment is also part of the business model.

Banks are not as keen on interest only mortgages for investment properties as they used to be so capital repayment is often required. No investor wants to be paying capital out of their own account. There is no guarantee that prices will continue to rise, another crash is always possible. Miss a repayment and banks get nervous.

Ray Palmer

Wailin wrote: »

Right at the start of this thread if you'd care to read. Tenant leaves property. Property then advertised at 50% increase. I'm sure tenant was paying a lot more than the cost of a car insurance before landlord decided to make a quick buck and double the rent.

An increase of 50% isn't doubling rent. If you don't understand the simple maths trying to understand how a landlord can be subsidising a tenant while charging rent that appears to be very expensive. Of the 50% increase a landlord the land lord actually receives less than half. They also a 6% reduction on rent in the last 5 years.

Samuel T. Cogley

Wailin wrote: »

No but I do wonder how someone can charge another person €1500 p/m for a one bed apartment in Dublin city.

Believe it or believe it not you're paying for all the pro-tenant legislation. You're paying for it through lack of people willing to become LL's, those of us that have gone Airbnb and by the fact that for every deadbeat tenant the LL's have to recoup that loss from someone, and guess who that is.

Andrew Beef

On the one hand, rent rules and tenants’ rights give all the power to the tenant.

Then on the other, landlords are expected to put their capital at risk and invest in property to provide rental accommodation.

Something has to give, as landlords are leaving the market because it’s a pain in the backside.

RCSATELLITES

I am looking to buy a property and it has just jumped €10k. Why is the price of property not restricted to a 4% increase from the asking price. The more people that want to buy it the more it goes up. That's the same with rent. More people are looking for properties to rent as there is a shortage, hence why prices go up.

It's not rocket science and the government should not be restricting rent in any way.

And if people don't want to rent then buy.

Simples.

You (tenants) will soon cop on.