Not worth the hassle?

RayCun

beauf wrote: »

What do you think is the return into your hand on 1500 rent after tax, costs per year.

No idea. Will depend to some extent on the property, what are the associated costs.
And whether that is a good return depends entirely on how much you have to pay back on a mortgage. Did you buy last year, five years ago, ten years ago, 15 years ago...? Equally, the kind of return you should expect right after buying is different to your average return over a mortgage lifetime.

pwurple

Assume above 1500 with no mortgage. Just for giggles.
What’s the take-home?

RayCun

pwurple wrote: »

Assume above 1500 with no mortgage. Just for giggles.
What’s the take-home?

No idea. What is the annual dividend on Apple shares? What was the average cost of a Dublin 2 apartment in 2003? What is the average rate of return on an Irish Life pension, managed fund, over the past five years? How much does bitcoin cost?

STB.

RayCun wrote: »

No idea. What is the annual dividend on Apple shares? What was the average cost of a Dublin 2 apartment in 2003? What is the average rate of return on an Irish Life pension, managed fund, over the past five years? How much does bitcoin cost?

We had too many wannabee economists in the celtic tiger days you know.

Thats why they get the respect they deserve these days and that just about as high as that earned by an estate agent. None.

beauf

Ray Palmer wrote: »

What margin do you think they should have had for them to not have been "over-extended"?...

They should be able to cover the mortgage if a tenant stops paying and one of the owners stops working. This is why there are rules to get mortgages....

Ray Palmer

beauf wrote: »

They should be able to cover the mortgage if a tenant stops paying and one of the owners stops working. This is why there are rules to get mortgages....

Still wouldn't have been enough. Taxes and expenses also went up while rent went down. You keep ignoring this.

Rents would need to go up to cover the margin you think is needed. So rents go up and/or people don't invest and rents go up again because there is a shortage of supply.

Congratulations you created the situation we are in already but want to make it worse. Doomed to repeat the same mistakes

pwurple

RayCun wrote: »

pwurple wrote: »

Assume above 1500 with no mortgage. Just for giggles.
What’s the take-home?

No idea. What is the annual dividend on Apple shares? What was the average cost of a Dublin 2 apartment in 2003? What is the average rate of return on an Irish Life pension, managed fund, over the past five years? How much does bitcoin cost?

Why? I'd make a fair stab at all those. I have apple shares, bitcoin, an apartment from around then, a pension. I know how all of those function, plus the tax implications now, and into the forseeable future. (Bar the apartment of course, because the tax on property changes on a pin). Does that make me well rounded enough to not be talking out of my backside? 
It's a bit rich (heh) to claim to have no experience, or knowledge, even enough to make a best guess to base any assumptions or assertions on, and yet pontificate to the experienced folk that they know nothing about what they've been doing for decades.

beauf

Ray Palmer wrote: »

Still wouldn't have been enough. Taxes and expenses also went up while rent went down. You keep ignoring this.

Rents would need to go up to cover the margin you think is needed. So rents go up and/or people don't invest and rents go up again because there is a shortage of supply.

Congratulations you created the situation we are in already but want to make it worse. Doomed to repeat the same mistakes

People are investing. There is a net increase in landlords registering every year. I suspect an increased % of REITs. We aren't losing stock. Rather our population is increasing. So demand is increasing. The stock isn't increasing to match.

You seem to think you can run a business or buy a property a property without any contingency planning. That is just gambling.

Costs generally increase. At the crash a lot of landlords had to top up rent to cover the mortgage. I know someone who had to top up on three properties. But they had enough personal income to do this. Which is why they didn't have 10 properties. They knew they couldn't cover that.
Many who didn't had to get out of the business.

The larger landlord can spread losses over many properties if the majority are not losing money. Its only the smaller landlord who has no options.

All you're saying is if your are late to the market and have tight margins you do not have the buffer or contingency planning to absorb any increased cost. The numbers are telling you that should get out of the business.

For many people even if they are still in the black they are finding the risk and hassle just not worth the return of investment.

Ragnar Lothbrok

Why does anyone ever buy a house that they don't intend to live in?

These two women wanted to make money by renting out properties and became greedy. They took on far more than they could afford and either didn't get sound advice, or else ignored the advice they were given.

They probably imagined that they could sit back and watch the money roll in, and it's turned into a nightmare for them. Hard to feel sympathy for them (although I do somewhat).

The Celtic Tiger years were fueled by unchecked greed.

beauf

RayCun wrote: »

No idea. Will depend to some extent on the property, what are the associated costs.
And whether that is a good return depends entirely on how much you have to pay back on a mortgage. Did you buy last year, five years ago, ten years ago, 15 years ago...? Equally, the kind of return you should expect right after buying is different to your average return over a mortgage lifetime.

Nope no mortgage. Just rent and costs.

But you gave up before even starting.

beauf

Ragnar Lothbrok wrote: »

Why does anyone ever buy a house that they don't intend to live in?

These two women wanted to make money by renting out properties and became greedy. They took on far more than they could afford and either didn't get sound advice, or else ignored the advice they were given.

They probably imagined that they could sit back and watch the money roll in, and it's turned into a nightmare for them. Hard to feel sympathy for them (although I do somewhat).

The Celtic Tiger years were fueled by unchecked greed.

I don't see how its greed to make a bad business or financial decision. If you invest in a pension or shares is that greed. If it's greed to be a landlord. Is it greed for a tenant to sub let.

If they hadn't got sick and had a bad tenant they probably would have been ok. So in one sense they were just unlucky.

They say you should have 6 month mortgage payments or rent set aside for emergencies. Many will not be able to do this.

I don't know where the greedy thing starts and ends. Minimalism? If most landlords only have one property it sounds like most are just looking for a modest income stream from it.

Ragnar Lothbrok

beauf wrote: »

I don't see how its greed to make a bad business or financial decision. If you invest in a pension or shares is that greed. If it's greed to be a landlord. Is it greed for a tenant to sub let.

If they hadn't got sick and had a bad tenant they probably would have been ok. So in one sense they were just unlucky.

They say you should have 6 month mortgage payments or rent set aside for emergencies. Many will not be able to do this.

I don't know where the greedy thing starts and ends. Minimalism? If most landlords only have one property it sounds like most are just looking for a modest income stream from it.

I'm not saying every landlord is greedy at all. I'm just thinking that a couple who take on four extra mortgages, while obviously not having enough savings in case of emergencies, were probably driven by greed.

Becoming sick, having bad tenants and downturns in the economy are all things that this couple should have seriously considered before they over extended themselves. The more properties a landlord owns, the chances of one or all of those things negatively affecting you are increased. These possibilities can be easily ignored when driven by greed.

I don't understand why anyone would take on four extra properties unless they were driven by greed and the expectation of a quick buck.

If I were to inherit a house in the morning, the last thing I'd want to do is rent it out - I'd sell it as quickly as possible, even under market value. If I won the Lotto, the last thing I would do is buy properties with the intent of renting them out.

Ray Palmer

beauf wrote: »

People are investing. There is a net increase in landlords registering every year. I suspect an increased % of REITs. We aren't losing stock. Rather our population is increasing. So demand is increasing. The stock isn't increasing to match.

You seem to think you can run a business or buy a property a property without any contingency planning. That is just gambling.

Costs generally increase. At the crash a lot of landlords had to top up rent to cover the mortgage. I know someone who had to top up on three properties. But they had enough personal income to do this. Which is why they didn't have 10 properties. They knew they couldn't cover that.
Many who didn't had to get out of the business.

The larger landlord can spread losses over many properties if the majority are not losing money. Its only the smaller landlord who has no options.

All you're saying is if your are late to the market and have tight margins you do not have the buffer or contingency planning to absorb any increased cost. The numbers are telling you that should get out of the business.

For many people even if they are still in the black they are finding the risk and hassle just not worth the return of investment.

What utter nonsense and contradictory comment to what you posted already.

The person you know didn't have the margin you said was required for this couple. All your friend dealt with was lower rent and higher taxes. They didn't lose a job and have non paying tenants. You stated that is the margin the couple should have had. Your friend was lucky.

Costs increase with inflation again you are ignoring the increased costs were brought in by the government. Name the other industries where the government increased the costs and taxes on!

We aren't talking about any increase in costs or drop in rent. We are talking explicitly about government added costs outside of the market. The lack of protection of landlords is disgraceful.

As for increase in PRTB registration it is a catch up as many were not registered before. Landlords are selling up and I am myself on a property. The shortage isn't just increase in population it has many factors such as the removal of bed sits and the requirement for a split couple with a child to both have a 2 bed places. If you think all the bed sits have been replaced and more rentals exist now you are dreaming.

You cannot write off losses if revenue don't see it as a loss and as pointed out adding more money to pay off the mortgage isn't profit. You are also talking about owning multiple properties when 80% of landlords own just one.

Browney7

Ray Palmer wrote: »

What utter nonsense and contradictory comment to what you posted already.

The person you know didn't have the margin you said was required for this couple. All your friend dealt with was lower rent and higher taxes. They didn't lose a job and have non paying tenants. You stated that is the margin the couple should have had. Your friend was lucky.

Costs increase with inflation again you are ignoring the increased costs were brought in by the government. Name the other industries where the government increased the costs and taxes on!

We aren't talking about any increase in costs or drop in rent. We are talking explicitly about government added costs outside of the market. The lack of protection of landlords is disgraceful.

As for increase in PRTB registration it is a catch up as many were not registered before. Landlords are selling up and I am myself on a property. The shortage isn't just increase in population it has many factors such as the removal of bed sits and the requirement for a split couple with a child to both have a 2 bed places. If you think all the bed sits have been replaced and more rentals exist now you are dreaming.

In the last budget the government increased betting taxes which will hammer small independent shops and knocked a decent chunk off the share price of the largest bookmaker in Ireland. They reincreased the VAT rate on the hospitality sector. They took 0.6% per annum of the value of a persons pension pot as an "emergency measure". Brought in USC and higher income taxes for pretty much everyone - including on investment income from dividends and bonds etc.

Governments change tax regimes all the time - it's what they do. If someone wants to excessively leverage themselves and sail close to the wind from a solvency perspective (these people were severely in the hole solvency wise when the a4se fell out of our wonderful tiger market) and leave themselves in a precarious position that is very much their choice.

beauf

Ray Palmer wrote: »

.. You are also talking about owning multiple properties when 80% of landlords own just one.

The case under discussion had multiple properties.

beauf

Ray Palmer wrote: »

. .The person you know didn't have the margin you said was required for this couple. All your friend dealt with was lower rent and higher taxes. They didn't lose a job and have non paying tenants. You stated that is the margin the couple should have had. Your friend was lucky....

Also had a large contingency fund. Didn't need to use it as they could cover the shortfall with income. Was it luck or good planning not to stretch to more properties.

beauf

Ray Palmer wrote: »

. ..

As for increase in PRTB registration it is a catch up as many were not registered before. Landlords are selling up and I am myself on a property. The shortage isn't just increase in population it has many factors such as the removal of bed sits and the requirement for a split couple with a child to both have a 2 bed places. If you think all the bed sits have been replaced and more rentals exist now you are dreaming....

Bedsits left the market ages ago. Even before the crash. How long are you going to carry that torch. People don't register a tenancy if you are leaving the market.

The stats all talk about the stock available to rent. That's at an all time low. But that's not the same as the stock that is rented.

The ratio of home ownership to rentals is decreasing. As it's less affordable to buy your own home.

As for population the numbers tell their own story

https://www.irishexaminer.com/ireland/irelands-population-growth-five-times-eu-average-472747.html

I think we lost something like 50k LL after the crash and we got back something like 20k back since then I think it net gain of 2k per year. The figures are not very clear.

But compared to population growth....

beauf

Ragnar Lothbrok wrote: »

....
If I were to inherit a house in the morning, the last thing I'd want to do is rent it out - I'd sell it as quickly as possible, even under market value. If I won the Lotto, the last thing I would do is buy properties with the intent of renting them out.

I guess it's about do you spend the money till it's gone or invest it so you lose less or even grow it. Greed or prudent?

_Brian

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.

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

Nobody wants to acknowledge that’s a problem. It has driven down rentals across the country.

Ray Palmer

Browney7 wrote: »

In the last budget the government increased betting taxes which will hammer small independent shops and knocked a decent chunk off the share price of the largest bookmaker in Ireland. They reincreased the VAT rate on the hospitality sector. They took 0.6% per annum of the value of a persons pension pot as an "emergency measure". Brought in USC and higher income taxes for pretty much everyone - including on investment income from dividends and bonds etc.

Governments change tax regimes all the time - it's what they do. If someone wants to excessively leverage themselves and sail close to the wind from a solvency perspective (these people were severely in the hole solvency wise when the a4se fell out of our wonderful tiger market) and leave themselves in a precarious position that is very much their choice.

Are you seriously trying to equate 8% plus increase to 1% and below increase with one be the end of tax reduction?

That increase on landlords is hugely different due to restriction of entry and exit.

Neither the hotel are gambling industry are suffering drops in revenue when this tax is being added.

You know a hell of a lot of detail for your friend. Did they have a contingency for 2 years of non payment for the 3 properties and them losing a salary? According to you that is what they should have. I would be very surprised they have a bigger contigency than their intial investment.This is what they would need according to you. I don't believe it and it stinks of BS.

Ragnar Lothbrok

Ragnar Lothbrok wrote: »

If I were to inherit a house in the morning, the last thing I'd want to do is rent it out - I'd sell it as quickly as possible, even under market value. If I won the Lotto, the last thing I would do is buy properties with the intent of renting them out.

beauf wrote: »

I guess it's about do you spend the money till it's gone or invest it so you lose less or even grow it. Greed or prudent?

Just because I wouldn't buy houses to rent them out doesn't mean I'd spend the money till it's gone. There are other options, you know :rolleyes:

Pretty much everything I've ever read on boards, whether it's from a landlord or a tenant, has convinced me that (to answer the question in the thread title) becoming a landlord is most definitely not worth the *possible/probable* hassle.

beauf

_Brian wrote: »

Nobody wants to acknowledge that’s a problem. It has driven down rentals across the country.

The tax aspect has been talked to death.

Do you have numbers for your driven down rentals suggestion.

Look at what the REITs are doing. Buying and selling older rentals. Then either going new build or major refurb. Then target the very top end of the market where the rents are highest and because of how its structured tax is less.

Its the Apple model of going not for market share and a race to the bottom. But only cream off the top, where profit is the only thing that matters.

I don't see how it makes sense to enter the market as a smaller landlord now. People who've been in the market a while are still ok if they are not over extended. Especially with the lack of protection compared to the UK for example.

Ray Palmer

beauf wrote: »

Bedsits left the market ages ago. Even before the crash. How long are you going to carry that torch. People don't register a tenancy if you are leaving the market. .

Bed sits were banned in 2013 so how was that before the 2008 crash? Due to the costs to change them most were sold as they stood with people returning them to family homes or much less number of rentals.

Many landlords weren't registered and they have a better processing those that weren't. In order to sell people are forced to register the property as rental so yes people do register to leave the market.

You really don't know what you are talking about.

Ray Palmer

beauf wrote: »

The tax aspect has been talked to death.

Do you have numbers for your driven down rentals suggestion.

Look at what the REITs are doing. Buying and selling older rentals. Then either going new build or major refurb. Then target the very top end of the market where the rents are highest and because of how its structured tax is less.

Its the Apple model of going not for market share and a race to the bottom. But only cream off the top, where profit is the only thing that matters.

I don't see how it makes sense to enter the market as a smaller landlord now. People who've been in the market a while are still ok if they are not over extended. Especially with the lack of protection compared to the UK for example.

What are you talking about!REIT aren't paying the tax native landlords are so they have a massive advantage to start with. They can do it at any market level and make profit

The fact they have a better tax situation doesn't concern you is shocking.

Old diesel

Are landlords just too expensive to keep happy if you can do housing at 170 k a unit with Hugh Brennan and co housing.

Those 170 k units could also be delivered as affordable rental via housing associations based on 170 k purchase price.

So on a site Hugh Brennan delivers his 170 k houses. Many go to home buyers who are part of the co op. But a housing association could also get Hugh to build units as part of the co op.

Current HAP tenants could access the housing association part of the developmeny with a HAP style payment covering any shortfall between what's financially sustainable for the HAP tenant and what the cost of provision to the housing association is.

170 k a unit gets you an 850 a month mortgage apparently - for a brand out of the box 2018 A2/A3 rated home.

Why would anyone want to pay 1800 euro to a landlord for a random standard property if potential opportunities to do a SUPERIOR property for LESS can be pursued.

Browney7

Ray Palmer wrote: »

Are you seriously trying to equate 8% plus increase to 1% and below increase with one be the end of tax reduction?

That increase on landlords is hugely different due to restriction of entry and exit.

Neither the hotel are gambling industry are suffering drops in revenue when this tax is being added.

You know a hell of a lot of detail for your friend. Did they have a contingency for 2 years of non payment for the 3 properties and them losing a salary? According to you that is what they should have. I would be very surprised they have a bigger contigency than their intial investment.This is what they would need according to you. I don't believe it and it stinks of BS.

What friend? All my friends are paying rents that are at the highest level in the history of the state (who have never as much as broken a plate let alone blowing up the property they rent and looking to live rent free for a million years as is often made out on here)whilst paying sky high taxes to fund among other things generous public service and old age pensions that we'll be lucky to see even a smidgeon of the same generosity in 40 years time.

Income taxes increased for everyone in the property crash and that is what rent is - it's income. I'm not happy with the high taxation burden on higher rate tax payers but it's what we've voted for as a society.

The levy was a % of the fund, the increased tax was a % of the income generated by the asset so yes I am saying that was a severe increase in the taxation burden of citizens.

Look it, you're entrenched in your view that LLs are the most hard done by people in the state and that capital repayments on mortgages are losses and landlords are on the express train to penury. I disagree and neither of us are going to agree so good luck buddy.

mrslancaster

RayCun wrote: »

https://rentassured.ie/

For anyone who is interested in this link for rentassured....


unfortunately that insurance product is NOT available in ireland.


The insurance broker could not give any indication as to when it might be available and the website has no details.

It seems an earlier poster was correct when he pointed out that there is currently no insurance policy a 'LL can take out to protect them against losses from unpaid rent, overholding or tenant damage. :rolleyes:

Old diesel

Part of the argument in public transport privatisation is that if we take buses as an example.

Bus Eireann drivers will generally be considered to be on superior pay to JJ Kavanagh or Aircoach etc.

If JJ Kavanagh also has more flexibility in their contracts then JJ Kavanagh can do cheaper fares on a route vs Bus Eireann.

Could a similar arguement be made in the rental sector.

That 170 k a unit to delIver an A3 rated home guy is the way and not the 250 to 300 k and more randomly bought by random "Pat on daf.ie" a bit of a pension on the side types

The Student

Old diesel wrote: »

Are landlords just too expensive to keep happy if you can do housing at 170 k a unit with Hugh Brennan and co housing.

Those 170 k units could also be delivered as affordable rental via housing associations based on 170 k purchase price.

So on a site Hugh Brennan delivers his 170 k houses. Many go to home buyers who are part of the co op. But a housing association could also get Hugh to build units as part of the co op.

Current HAP tenants could access the housing association part of the developmeny with a HAP style payment covering any shortfall between what's financially sustainable for the HAP tenant and what the cost of provision to the housing association is.

170 k a unit gets you an 850 a month mortgage apparently - for a brand out of the box 2018 A2/A3 rated home.

Why would anyone want to pay 1800 euro to a landlord for a random standard property if potential opportunities to do a SUPERIOR property for LESS can be pursued.

Answer me a simple question then. If the Housing Association model is so good why are they not being built in large numbers to solve the crisis?

I will tell you why because the State don't want to house people because of all the hassle involved. Evicting people does not happen to the extent it should either in the private rental sector nor the social/approved housing bodies.

Why do you think small landlords are leaving the sector if it was easy money?

The posts on this site proves to me exactly how little people actually know about the sector.

But sure hey feel free to target the landlords (we are not the problem) if the State actually engaged with us we could come up with a solution to all concerned. Keep changing the legislation and keep up with the anti landlord stance and we will find ways around it.

Even if we sell up remember this is one less property for the rental market. The property does not disappear but the number of bed spaces on the rental market will. Very few properties are now being bought as investments most are first time buyers who are couples.

Samuel T. Cogley

My direct experience of housing assocations is, if there is anyone who gives a shìt less about who they dump on a community than a county council it's a housing assocation.