Not worth the hassle?

Wheres Me Jumper?

Just spotted this article today.
Wondering if other LLs feel the same way, or were they just unlucky or perhaps a tad naive?


https://www.independent.ie/irish-news/its-not-worth-the-hassle-woman-on-nightmare-experience-of-being-a-dublin-landlord-37435400.html

handlemaster

I have had that experience of a very bad tenant. Place cost around 7/8k to repair . Also gave full deposit back as violence and intimation was involved. I didnt persue or entertain taking a case even if I won no chance of getting the money owned.

RayCun

Wheres Me Jumper? wrote: »

Just spotted this article today.
Wondering if other LLs feel the same way, or were they just unlucky or perhaps a tad naive?


https://www.independent.ie/irish-news/its-not-worth-the-hassle-woman-on-nightmare-experience-of-being-a-dublin-landlord-37435400.html

Three properties in negative equity?

Wheres Me Jumper?

RayCun wrote: »

Three properties in negative equity?

i saw that and thought wtf are they doing?

looks like they may have entered the market at the worst possible time, and borrowed heavily.

Wheres Me Jumper?

handlemaster wrote: »

I have had that experience of a very bad tenant. Place cost around 7/8k to repair . Also gave full deposit back as violence and intimation was involved. I didnt persue or entertain taking a case even if I won no chance of getting the money owned.

crikey sorry to hear that.
just wondering at what stage did the LL/tenant relationship break down.
were they lousy tenants from day 1, or did issues emerge later on?
and did you interview them yourself before you took them in?

Samuel T. Cogley

Feel exactly the same way and have had excellent tenants. The wife won't budge on selling and crystalising the loss but I've had it, too much risk for the reward. There needs to be a massive overhaul of the eviction process for the market to stop losing LL's.

The Student

Samuel T. Cogley wrote: »

Feel exactly the same way and have had excellent tenants. The wife won't budge on selling and crystalising the loss but I've had it, too much risk for the reward. There needs to be a massive overhaul of the eviction process for the market to stop losing LL's.

Thinking the same myself.

DubCount

"Its not worth the hastle" is something that I reckon pretty much every landlord has thought in the last couple of years. Returns are not exceptional (especially for properties that are mortgaged), and risks are high. There is a constant stream of new regulations, rules and legislation. The public perception is that all landlords are greedy rich fat cats that are abusing ordinary decent citizens so they can upgrade their BMW - and this perception is backed up by 99% of media coverage and the soap box provided to "homeless" charities.

Frankly, there are easier ways to turn a coin. You can pump loads of money into a private pension scheme and you wont find angry mobs calling for your head - the government will even give you tax relief to help you make more money.

Between RTB, RPZ and HAP discrimination so far and lots more to come, "its not worth the hastle" is spot on the money in my view.

I know some people don't think there should be a private rented sector at all. People should be either buying property for themselves or in government provided direct social housing. Be careful what you wish for - you may just get it.

handlemaster

Wheres Me Jumper? wrote: »

crikey sorry to hear that.
just wondering at what stage did the LL/tenant relationship break down.
were they lousy tenants from day 1, or did issues emerge later on?
and did you interview them yourself before you took them in?

8

agent found the tenant. I senced somthing off from the start but just kept giving the benefit of the doubt. This was to bit me every month for two years. the stress was always there

Wheres Me Jumper?

handlemaster wrote: »

8

agent found the tenant. I senced somthing off from the start but just kept giving the benefit of the doubt. This was to bit me every month for two years. the stress was always there

did the agency provide references? did you see them?

where were they when things went south?

did they offer you any type of compensation?

Baby01032012

As above, check the references the agent got. I did and found they were made up. I’m suing the letting agent at the moment for loosing a years income because they never checked the references.

Wheres Me Jumper?

Baby01032012 wrote: »

As above, check the references the agent got. I did and found they were made up. I’m suing the letting agent at the moment for loosing a years income because they never checked the references.

that's appalling, but sadly i am not at all surprised. i NEVER use agents as i think they are about as much use an ashtray on a motorbike.
besides there is nothing like meeting a prospective tenant face to face and getting to see the cut of their jib as it were.
on the one occasion, i ever used them i recall returning to my property to be horrified that he had forgot to lock the front door! not even an apology. dreadful stuff.

i hope you are successful in your action. do keep us posted.

jimmycrackcorm

Baby01032012 wrote:

As above, check the references the agent got. I did and found they were made up. I’m suing the letting agent at the moment for loosing a years income because they never checked the references.

What's the point in employing an agent when they can't get the basics right?

handlemaster

Wheres Me Jumper? wrote: »

did the agency provide references? did you see them?

where were they when things went south?

did they offer you any type of compensation?

ex landlords provide the best references. i just used them to find a *good* tenant.

Wheres Me Jumper?

handlemaster wrote: »

ex landlords provide the best references. i just used them to find a *good* tenant.

that depends.
i know some LLs who will give a bad tenant a good reference, just to be rid of them.

i would get references from LL, employer, Garda (if in doubt).
if the tenant objects or shows any reluctance, then it's NEXT!

my sympathies goes to the above LLs who have been stung. i must have been very lucky, as i've never had any serious problems with tenants.

Baby01032012

Baby01032012 wrote: »

As above, check the references the agent got. I did and found they were made up. I’m suing the letting agent at the moment for loosing a years income because they never checked the references.

Happened to me too - mentally unstable tenant... I was abroad, but issues from day 2.

After various dramas unfolded I insisted on following up the references personally - and one out of the three was legit - in that referee existed, said she was sorry for my troubles, had no idea her name and number had been given out and would never have vouched for the tenant. Letting agent had checked nothing.
I considered suing - but due to a stroke of luck the tenant and crazy friends left (I think local residents "encouraged" their early departure before I was back in the country). I was down just 2 months rent, and a deep clean (no major damage) - and felt like I got off lightly.

Legalities and stress just not worth it. Sold the place soon after, weight off my shoulders.

the_syco

Wheres Me Jumper? wrote: »

that depends.
i know some LLs who will give a bad tenant a good reference, just to be rid of them.

I think he means that "ex landlords" won't have a reason to lie, unlike the current landlord, who may.

Wheres Me Jumper?

the_syco wrote: »

I think he means that "ex landlords" won't have a reason to lie, unlike the current landlord, who may.

point taken.

cruizer101

RayCun wrote: »

Three properties in negative equity?

Yeah that ridiculous to still have 3 properties in negative equity.

House prices are up to 80% of their peak values, considering they were bought as rental properties they I doubt they had 100% mortgage so over the past 10 years they have paid barely anything of the mortgages.
They must have been going interest only on the rental properties for a good few years.

I have some sympathy for having bad tenants and the losses from that but there were some very bad decisions made by landlords

Wheres Me Jumper?

cruizer101 wrote: »

Yeah that ridiculous to still have 3 properties in negative equity.

House prices are up to 80% of their peak values, considering they were bought as rental properties they I doubt they had 100% mortgage so over the past 10 years they have paid barely anything of the mortgages.
They must have been going interest only on the rental properties for a good few years.

I have some sympathy for having bad tenants and the losses from that but there were some very bad decisions made by landlords

to be fair i think they had a bit of bad luck as well what with ill health and all, but certainly, they seem to have been very poorly advised

Wildly Boaring

Bit much to be going to a national newspaper with

"Woe is me, I have 4 houses and need to sell one"

Surely even if all 4 were in negative equity they weren't all bought with 100% mortgages.

Even if they were surely the current rents are more than paying any mortgage


Edit 5 they currently have 5 houses, 3 in negative equity. Which means 2 that aren't!!

RayCun

They must have bought three houses, at the peak of the market, on interest only mortgages.

They're gamblers who lost.

Ray Palmer

Wildly Boaring wrote: »

Bit much to be going to a national newspaper with

"Woe is me, I have 4 houses and need to sell one"

Surely even if all 4 were in negative equity they weren't all bought with 100% mortgages.

Even if they were surely the current rents are more than paying any mortgage


Edit 5 they currently have 5 houses, 3 in negative equity. Which means 2 that aren't!!

Why do you think rent would more than pay the mortgage? They have said 3 are in negative equity. That would mean the mortgage is higher than the value of the property. If you bought a house tomorrow and rented it out the rent wouldn't pay the mortgage. If the bought in 2008 current rents wouldn't pay off a much larger mortgage than if bought now.

They are making a loss and took a huge financial hit while renting that would put them at least a decade behind when they would have planned to be paid off. The have gone to papers to highlight they have lost money in an effort for public understanding. Unfortunately you and others still don't see it. They have lost money and are losing money while people think landlords are making a fortune.

Even if they sell up all their property they have still lost money but because they own property people don't care.

Wheres Me Jumper?

Ray Palmer wrote: »

Why do you think rent would more than pay the mortgage? They have said 3 are in negative equity. That would mean the mortgage is higher than the value of the property. If you bought a house tomorrow and rented it out the rent wouldn't pay the mortgage. If the bought in 2008 current rents wouldn't pay off a much larger mortgage than if bought now.

They are making a loss and took a huge financial hit while renting that would put them at least a decade behind when they would have planned to be paid off. The have gone to papers to highlight they have lost money in an effort for public understanding. Unfortunately you and others still don't see it. They have lost money and are losing money while people think landlords are making a fortune.

Even if they sell up all their property they have still lost money but because they own property people don't care.

did you not know it is a sin for irish people to own rental property in ireland, unless you are a foreigner that is. in which case our Govt. will thank you by way of very generous tax breaks.
:eek:

cruizer101

Ray Palmer wrote: »

If you bought a house tomorrow and rented it out the rent wouldn't pay the mortgage.

It should easily cover the mortgage, there are two bed apartment in balbriggan you can buy for 180ish and rent for 1300 - 1400, mortgage repayment on 160k is 675@3% and 763@4%.
So rent is about double what mortgage repayment is.
Taking tax off you still covering the payments and that ignores interest relief.

So If you bought a house tomorrow and rented it out and the rent wouldn't pay the mortgage. you made a bad decision.

Ray Palmer wrote: »

because they own property people don't care

I think it is more that people don't care as much because this was an investment they lost money on, the same as many other investments,
it wasn't an accidental landlord with one property. The have 4 rented properties which they took large mortgages on, that was a bad decision and they are paying the price. No one forced them to borrow to invest.
This isn't their home we are talking about, it was an investment made on borrowed money in other words a gamble that didn't pay off.

Browney7

Ray Palmer wrote: »

Why do you think rent would more than pay the mortgage? They have said 3 are in negative equity. That would mean the mortgage is higher than the value of the property. If you bought a house tomorrow and rented it out the rent wouldn't pay the mortgage. If the bought in 2008 current rents wouldn't pay off a much larger mortgage than if bought now.

They are making a loss and took a huge financial hit while renting that would put them at least a decade behind when they would have planned to be paid off. The have gone to papers to highlight they have lost money in an effort for public understanding. Unfortunately you and others still don't see it. They have lost money and are losing money while people think landlords are making a fortune.

Even if they sell up all their property they have still lost money but because they own property people don't care.

Because they bought several property at the top of the market with borrowed money and probably on interest only - if it was a capital repayment mortgage mortgage they would surely have a chunk of the capital paid off and with the strong asset price recovery be in positive equity (albeit the property being worth less than the mad money they paid for it). They made a terrible and substantial investment which is regrettable for them and no doubt they would go back in time if they could.

Hundreds of thousands of people lost a pile of money in the crash from all manner of investments including property, equity funds and my personal favourite of "diversified portfolios of bank shares". Let's not kid ourselves, they didn't buy three leveraged properties out of some moral or idealistic notion to provide housing. They purchased 3 properties to ride the property speculation train to make money but got their timing disastrously wrong.

Tenants wrecking the place on them is reprehensible and punishments should be more severe for delinquent tenants. They'd still be severely in the hole if they had model tenants.

Ray Palmer

cruizer101 wrote: »

It should easily cover the mortgage, there are two bed apartment in balbriggan you can buy for 180ish and rent for 1300 - 1400, mortgage repayment on 160k is 675@3% and 763@4%.
So rent is about double what mortgage repayment is.
Taking tax off you still covering the payments and that ignores interest relief.

So If you bought a house tomorrow and rented it out and the rent wouldn't pay the mortgage. you made a bad decision.



I think it is more that people don't care as much because this was an investment they lost money on, the same as many other investments,
it wasn't an accidental landlord with one property. The have 4 rented properties which they took large mortgages on, that was a bad decision and they are paying the price. No one forced them to borrow to invest.
This isn't their home we are talking about, it was an investment made on borrowed money in other words a gamble that didn't pay off.

You are ignoring tax of 52% so rent 1400 after tax it is 672. That is why you can't make money on a property.

No matter what they lost money in a market where people claim that landlords are rolling in money

cruizer101

Ray Palmer wrote: »

You are ignoring tax of 52% so rent 1400 after tax it is 672. That is why you can't make money on a property.

cruizer101 wrote: »

It should easily cover the mortgage, there are two bed apartment in balbriggan you can buy for 180ish and rent for 1300 - 1400, mortgage repayment on 160k is 675@3% and 763@4%.
So rent is about double what mortgage repayment is.
Taking tax off you still covering the payments and that ignores interest relief.

I didn't ignore it, I just didn't go into all the details, I said about half the rent the rent will still cover mortgage.

So say 1,400, mortgage payment is 763@4% (there are better rates but lets go with this)
Mortgage interest portion of repayment starts at 533 and is 415 after 10 years, lets take an average on that of 474.
75% of mortgage interest is 355 (I think the rate of mortgage interest relief went up in last budget)
1400-355 = 1045 @ 52% is 543 tax paid leaving 856 profit.

That is enough to cover the mortgage, even accounting for some expenditure. And remember paying off the mortgage is still profit even if you are left with nothing after it, at the end of the mortgage you own a large asset.

I'm not trying to say there is huge money to be made being a landlord, I accept the margins are tight and a bad tenant can ruin your investment.
But that is the risk you take when you make an investment, no different to shares dropping or companies going bust.
They took loans to make that investment and if they didn't educate themselves on the risks of doing that before taking loans of what likely amounted to over €1,000,000 then I'm sorry but they have no-one to blame but themselves.

Fol20

Great video of rent control

https://www.youtube.com/watch?v=snTgTQndvi0

Ray Palmer

cruizer101 wrote: »

I didn't ignore it, I just didn't go into all the details, I said about half the rent the rent will still cover mortgage.

So say 1,400, mortgage payment is 763@4% (there are better rates but lets go with this)
Mortgage interest portion of repayment starts at 533 and is 415 after 10 years, lets take an average on that of 474.
75% of mortgage interest is 355 (I think the rate of mortgage interest relief went up in last budget)
1400-355 = 1045 @ 52% is 543 tax paid leaving 856 profit.

That is enough to cover the mortgage, even accounting for some expenditure. And remember paying off the mortgage is still profit even if you are left with nothing after it, at the end of the mortgage you own a large asset.

I'm not trying to say there is huge money to be made being a landlord, I accept the margins are tight and a bad tenant can ruin your investment.
But that is the risk you take when you make an investment, no different to shares dropping or companies going bust.
They took loans to make that investment and if they didn't educate themselves on the risks of doing that before taking loans of what likely amounted to over €1,000,000 then I'm sorry but they have no-one to blame but themselves.

Notice profit now includes ignoring paying the mortgage off. Paying off the mortgage is not and never will be profit. Building equity in the house is not profit. Yes you can make money but no accountant ever worked it out as you suggest.

One vacant month and you make a loss in a year. You certainly are ignoring expenses like insurance, maintenance, lot etc..

Work out all the figure properly and it is a loss. Ignored lawyer fees, decoration, furniture and appliances.

Buy a house and rent it out now you will lose money buy it at 2008 prices you certainly will be making a loss. Hugely different from investing in shares as the government increased taxes while rent dropped and you can lose 2 years of income and incur extra costs. No financial advisor could tell people the government will just add extra tax and charges then cap your rent. That added risk to property investment is now there increasing risk.

circular flexing

I have good tenants who pay the rent on time and look after the house but even I think it's too much hassle. The rent is well below what I could be getting (partially my fault, but also partially the RPZ regulation coming in) and the constant stream of regulations can be hard to keep up with. Also my biggest worry is getting the house back if I ever need it. In today's market, I wouldn't blame a tenant for overholding but I think there needs to be more landlord support in that respect.