Will lifetime renting in Ireland become viable?

LuckyLloyd

The Student wrote: »

You have quoted a fig of 85% which was in the early 2000's which is now nearly 20 yrs old so is no longer valid today.

What you appear to be ignoring is the tenant protection. It can take a year to evict a non paying tenant. Can you identify one privately owned business where you are forced to continue providing a service where you are not being paid and even if you do get an RTB award and try to enforce it you will get nothing as the tenant has nothing to secure the debt against.

Properties were not "kept out of the market" by Nama. Anybody who had the cash could buy them.

More importantly, he quoted a figure that a mere 1.2% of tenancies have had disputes for over holding / late payment of rent. So it's a virtual non issue, despite the concerted efforts on this website to make it a central focus of conversation on the rental market.

Keatsian

One eyed Jack wrote: »

You’re renting off your parents, you might as well be living at home ffs :pac:

As for the question in the opening post, it’s not currently viable for the majority of people, in the sense that they don’t have the freedom to be able to decide one way or the other whether they want to rent a property for their lifetime, or whether they would prefer to buy property.

I’m renting in the same property for the last 20 years, and I could easily be here for the rest of my life as I’d rather not go into a retirement home or one of those retirement villages. I don’t care much for travelling either so I have no wish to see the world in my retirement. I could afford to see the world now and I would encourage people to see and experience the world and travel while they’re young. I was planning early retirement, but I’m actually in a place in my life now where I enjoy my work and I enjoy my current lifestyle. Being able to afford the rent in my retirement isn’t something that keeps me awake at night when to be perfectly honest, I don’t plan on retiring. I have made provisions for giving myself that choice if I feel like it later on, and because I’m prepared for it now it’s not something I give much more thought to.

TL:DR; lifetime renting is viable already. It would require a massive cultural shift though to get us out of the mindset where we are compelled to be lumbered with a 35 year loan as a measure of our success, only to die and leave the property to an ungrateful little shìte! :pac:

I bet you don't have any kids. Renting is not a good long-term solution for those with families. People don't buy homes as a "measure of success"; they buy them to provide long term stable homes for themselves and their children.

Mad_maxx

Franz Von Peppercorn wrote: »

This definitely needs to change if we are to have a professional rental system.

The media desire the opposite, more tenant protection

Grayson

Captain Chaos wrote: »

For me a 35 year is only option due to join income with the current rules. Anything less the banks won't approve.

Rent are only going one way, up. Interest rates are on the deck and staying there for long term.

So choices for us are paying 2k pm minimum for life or 920pm for 35 years. Buying is a no brainer.

I'm 40 and single. So I'm fecked. I need to meet someone and get married just to make sure i have somewhere to live when I retire.

iamtony

The Student wrote: »

Anybody who enters business does so to earn a profit. In a normal functioning market rent would be cheaper than a mortgage. However we don't have a normal functioning market.

There are costs associated with home ownership other than just the mortgage. Ironically rent could be cheaper if the tax take on the rent was not so high.

There was a consultation paper by the Minister for Housing last year on the housing crisis asking for submissions.

I as a landlord made a submission, my suggestion was to extend the rent a room scheme to landlords, this would allow tenants save for a deposit.

One of the problems with the housing market is that people want to live in specific places but don't want to pay to live there. Houses are priced because of supply and demand, one of the factors driving demand is location and the surrounding amenities.

If you want to live in an area that has all the amenities around, good transport links etc then you should expect to pay a premium above a similar house that does not have these amenities.

You could afford to rent for your life if you are willing to rent in a location that you can afford not in a location you want to live in although you can't afford it.

yes I understand people want to make a profit but what landlords what to do is make double profit, they borrow money have the tenant cover the cost of borrowing that money and pay for that asset and then at the end of it all the landlord has a property they can sell to make a massive return.
If the landlord bought the property for cash they would see just how profitable renting out a house is. It's not the tenants fault if the landlord has a massive mortgage on a property.
And on your point you could afford to rent all your life if you were willing to live in a kip when you retire because you can't afford to rent in ranelagh anymore is a good one. While the landlord lives in their rent free home paid for by the tenants.

iamtony

Grayson wrote: »

I'm 40 and single. So I'm fecked. I need to meet someone and get married just to make sure i have somewhere to live when I retire.

Nah, loads of time if your smart. Save save save for 10 years as if you were paying a mortgage and buy during the next crash.

Keatsian

iamtony wrote: »

Nah, loads of time if your smart. Save save save for 10 years as if you were paying a mortgage and buy during the next crash.

They need to live somewhere else in the meantime, man. Which means they have to pay those eye-wateringly high rents too. And that's before we even get to your notion that there will be a conveniently timed "next crash" when cheap property will be available.

iamtony

Geuze wrote: »

One of the quirks of the Irish system is that many people think "rent is dead money".

So they are discouraging the idea of being a tenant.

Yet the same people often want to be landlords.

You can't be a landlord, unless there are tenants.

Well it is dead money compared to buying a place of your own. Sure renting a property has a value but not good value since you don't ever get to stop paying vs buying a home that is paid off and then it's free to live in every month.
Maybe in a climate where renting is half the cost of purchasing could it be good value once you don't live to long.

Ruraldweller56

Geuze wrote: »

The Irish system is biased towards home ownership.

People rationally respond to those incentives.

As a result, home ownership rates have tended to be high.

Nothing wrong with that, broadly.

It does make the labour market somewhat less flexible, as it reduces labour mobility.

Personally, I would not rent long-term.



I'm curious as to why millions of Dutch, Germans and Swiss do. I'm not saying there system is better, I just want to know more about it.

Do they not think that "rent is dead money"?

I'd be more inclined to say human nature is biased towards wanting to own the patch of ground you live on.

I think some of the thing here comes from the saturation of people in Dublin and the people who live/work there.

I happen to work in Dublin 5 days a week but live down in the south. Most of the people I hear who are advocates of the 'we should all rent like they do in Holland' are Dubliners. That's not a coincidence.

There's a massive disconnect there. It wouldn't dawn on most of the people I know where I'm from to spend their lives renting. Funnily enough, the only 2 people I ever remember suggesting the lifelong rental thing down where I'm from were a Dubliner who moved there (who now owns his own place there, for all of his 'people should spend their lives renting' and 'Irish people are obsessed with owning our own property' guff) and an Englishman from Doncaster.

I can't say how the Dutch view money spent renting. Even if they did think it was dead money I'm not sure what alternatives they'd have.

iamtony

Keatsian wrote: »

They need to live somewhere else in the meantime, man. Which means they have to pay those eye-wateringly high rents too. And that's before we even get to your notion that there will be a conveniently timed "next crash" when cheap property will be available.

Yeah true although as a single person it's easier to live somewhere cheaper and save. There's still hope.

Ruraldweller56

Wasn't Dermot Bannon on the telly box not too long ago, trying to advocate a case that we should all be renting too, similar to the Dutch, Germany etc models?

I had no idea Dermot Bannon had such a desire to spend his life as a tenant to a landlord.

What a real salt of the earth man of the people guy he is.

Of course, it could never be that renting is fine for the everyday plebs and people like himself will always own their own home? Nah that couldn't be it surely.

BrokenArrows

fash wrote: »

How or why would rent be lower than a mortgage repayment?
Someone borrows money to provide a service and incurs additional costs in providing that service - and should sell their services for less than cost?

Thats the constant misunderstanding that people make. They are not making a loss.

Im ignoring taxes for simplicity.
If their mortgage payments are 1000 per month and they rent it out for 900 a month they are not making a 100 loss. The 900 goes to paying off the mortgage which increases the landlords equity in the property and their extra 100 is also increasing their equity in the property.

The landlord is at the end of the day still profiting. Its just that their profits are held in the house as an asset.

Ruraldweller56

Geuze wrote: »

One of the quirks of the Irish system is that many people think "rent is dead money".

So they are discouraging the idea of being a tenant.

Yet the same people often want to be landlords.

You can't be a landlord, unless there are tenants.

Are you having a laugh "yet the same people often want to be landlords" where do you get that idea from?

I want to own my own house and the thought of dealing with 'tenants' sends a chill down my spine.

You make out we're all vulture capitalists just because we want to own our own homes.

Ted Plain

I don't think it can work here as anything other than a short-term solution.

I can't see how someone on a small pension could afford €1500+ a month in Dublin.

I drive past the big Cherrywood building site regularly and they have on their hoardings statements such as 'Rentals stating Autumn 2020'. So they are all being built for rental, not for sale. Is this the way it will be from now with all new developments? It sounds dystopian.

iamtony

Ruraldweller56 wrote: »

Wasn't Dermot Bannon on the telly box not too long ago, trying to advocate a case that we should all be renting too, similar to the Dutch, Germany etc models?

I had no idea Dermot Bannon had such a desire to spend his life as a tenant to a landlord.

What a real salt of the earth man of the people guy he is.

Of course, it could never be that renting is fine for the everyday plebs and people like himself will always own their own home? Nah that couldn't be it surely.

that's it exactly! It should be normal for everyone...... Except me..... Just incase I sound like a disgruntled Tenant, I don't rent or have a mortgage on my home.

Can someone advocating renting for life please do the sums for me so it makes sense? Assuming I'm 30 and going to live till I'm 80 in Ireland where the average mortgage is about 20-30 years long.

fash

BrokenArrows wrote: »

Thats the constant misunderstanding that people make. They are not making a loss.

Im ignoring taxes for simplicity.
If their mortgage payments are 1000 per month and they rent it out for 900 a month they are not making a 100 loss. The 900 goes to paying off the mortgage which increases the landlords equity in the property and their extra 100 is also increasing their equity in the property.

The landlord is at the end of the day still profiting. Its just that their profits are held in the house as an asset.

The mortgage consists of paying interest and (sometimes) on paying the principle- of which paying the interest is the majority, especially at the start and which for the last few years has not been a fully recoverable expense. It remains the case that costs have to be paid by the landlord - primarily and for simplicity's sake " the mortgage". How can or should on average and over the long term the cost of rent below those costs/"the mortgage"?

iamtony

fash wrote: »

The mortgage consists of paying interest and (sometimes) on paying the principle- of which paying the interest is the majority, especially at the start and which for the last few years has not been a fully recoverable expense. It remains the case that costs have to be paid by the landlord - primarily and for simplicity's sake " the mortgage". How can or should on average and over the long term the cost of rent below those costs/"the mortgage"?

As I've said. The mortgage is yours and is temporary once You pay off YOUR mortgage you will have a valuable asset that you will be able to profit from every month and then sell it for a massive amount.

Ruraldweller56

iamtony wrote: »

that's it exactly! It should be normal for everyone...... Except me..... Just incase I sound like a disgruntled Tenant, I don't rent or have a mortgage on my home.

Can someone advocating renting for life please do the sums for me so it makes sense? Assuming I'm 30 and going to live till I'm 80 in Ireland where the average mortgage is about 20-30 years long.

Dermot Bannon will be first in the queue to buy these developments once they've been built.

Then he'll be on the telly box again telling us all how great renting them is because they do it in Germany and Holland.

_Brian

Renting a property doesn’t provide for accommodation in old age.

When you retire a 66/68 or whatever how can you afford the ongoing rent. Irish people are notoriously poorly pensioned, it would see lots of pensioners being moved on as they couldn’t afford rent.

Moonjet

As Tony Soprano said. Buy land, cause God ain't making any more of it.

The Student

iamtony wrote: »

yes I understand people want to make a profit but what landlords what to do is make double profit, they borrow money have the tenant cover the cost of borrowing that money and pay for that asset and then at the end of it all the landlord has a property they can sell to make a massive return.
If the landlord bought the property for cash they would see just how profitable renting out a house is. It's not the tenants fault if the landlord has a massive mortgage on a property.
And on your point you could afford to rent all your life if you were willing to live in a kip when you retire because you can't afford to rent in ranelagh anymore is a good one. While the landlord lives in their rent free home paid for by the tenants.

Any figure above profit is referred to as "supernormal profit". When suppliers are earning supernormal profit other suppliers are attracted to the market to get a share of these supernormal profits.

As supply increases supernormal profit falls until it reaches normal profit. As like any business model profit maximization is the goal along with increase asset value. As supply increase price falls, this is basic economics.

You don't have to live in a "kip" as you reference. You can rent outside of the major urban centers for a fraction of what you pay in the urban centers.

It depends on what you want and what you can afford. I want to live in a mansion in Dalkey with a sea view and a top of the range car. I can't afford it, that does not mean the price should be dropped to one I can afford.

While the above example is an extreme the fundamentals remain the same. You have to limited by your means.

sheesh

iamtony wrote: »

If the landlord bought the property for cash they would see just how profitable renting out a house is. It's not the tenants fault if the landlord has a massive mortgage on a property.

the landlord is not blaming the tenant but if the current rental rates can pay the mortgage they are going to set it at that and you would too in that situation.

Nobody complains about being over paid.

Samuel T. Cogley

Sorry I must be reading this wrong: I see Q1 of 2018 29% of disputes were for rent arrears/overholding with a further 14% of overholding simpliciter. Where is this 1.2% coming from?

Frostybrew

Samuel T. Cogley wrote: »

Sorry I must be reading this wrong: I see Q1 of 2018 29% of disputes were for rent arrears/overholding with a further 14% of overholding simpliciter. Where is this 1.2% coming from?

Yes you're reading it wrong. Go back and have another look.

Samuel T. Cogley

Frostybrew wrote: »

Yes you're reading it wrong. Go back and have another look.

Where should I be looking for this 1.2%?

Franz Von Peppercorn

fash wrote: »

The mortgage consists of paying interest and (sometimes) on paying the principle- of which paying the interest is the majority, especially at the start and which for the last few years has not been a fully recoverable expense. It remains the case that costs have to be paid by the landlord - primarily and for simplicity's sake " the mortgage". How can or should on average and over the long term the cost of rent below those costs/"the mortgage"?

Most of the costs of the interest payments are recoverable in fact. And landlords don’t have to get mortgages. Leveraging is fine but I wouldn’t become a landlord unless I had 50% equity and the market was soft but improving.

I think a lot of the issues here are with accidental landlords. Don’t you have to put 25% deposit on a rental mortgage?

Franz Von Peppercorn

Samuel T. Cogley wrote: »

Where should I be looking for this 1.2%?

Probably your figure is a percentage of disputes. Probably (without looking) 100% of rentals aren’t in dispute.

Samuel T. Cogley

Franz Von Peppercorn wrote: »

Probably your figure is a percentage of disputes. Probably (without looking) 100% of rentals aren’t in dispute.

Still begs the question where is this 1.2% coming from.

Franz Von Peppercorn

Samuel T. Cogley wrote: »

Still begs the question where is this 1.2% coming from.

Bit of maths I suppose.

Edit: where’s the link?

Samuel T. Cogley

Franz Von Peppercorn wrote: »

Bit of maths I suppose.

I'd like to see that math.