Is the desire to own your own home justified !

Fol20

FishOnABike wrote: »

The analogy doesn't really work though. Other items people can rent e.g. cars are short lived depreciating assets. Property is an intergenerational appreciating (apart from the occasional bubble) asset.

Expecting the same rules to apply to something whose value rapidly depreciates to zero and something whose longterm value (and ability to provide an ongoing income stream) increases at a rate above inflation is unrealistic.

Your logic does make sense however how about a business owner. Their asset can go up and down however they expect profits from that business. Its unrealistic to expect a ll to suffer for 30 years and then to finally come out the other side then start earning money. Even if someone is playing the long game, putting yourself through undue sacrifice of that nature is too much. You need to encourage people to invest in this asset class or btl will continue to decrease. Right now as you can see in another thread created today, rental supply decreased at 2pc last year. if its decreasing at that level at the highest ever rents, how can it survive when he get to the bad times again.

The Student

Fol20 wrote: »

Your logic does make sense however how about a business owner. Their asset can go up and down however they expect profits from that business. Its unrealistic to expect a ll to suffer for 30 years and then to finally come out the other side then start earning money. Even if someone is playing the long game, putting yourself through undue sacrifice of that nature is too much. You need to encourage people to invest in this asset class or btl will continue to decrease. Right now as you can see in another thread created today, rental supply decreased at 2pc last year. if its decreasing at that level at the highest ever rents, how can it survive when he get to the bad times again.

I would completely agree with this sentiment. Being a landlord is a business pure and simple with the intent on turning a profit. People seem to completely forget this concept when it comes to the rental market.

With the ongoing anti landlord stance and the constantly changing "goal posts" expect to see increasing numbers of landlords exiting the market.

FishOnABike

Fol20 wrote: »

Your logic does make sense however how about a business owner. Their asset can go up and down however they expect profits from that business. Its unrealistic to expect a ll to suffer for 30 years and then to finally come out the other side then start earning money. Even if someone is playing the long game, putting yourself through undue sacrifice of that nature is too much. You need to encourage people to invest in this asset class or btl will continue to decrease. Right now as you can see in another thread created today, rental supply decreased at 2pc last year. if its decreasing at that level at the highest ever rents, how can it survive when he get to the bad times again.

Yet this is what anyone contributing to a pension fund is doing.

Expecting a property to pay for itself with a monthly positive cash flow and ending up owning the property outright after 30 years without having to put any ongoing money into acquiring the property is akin to expecting to be able to take money out of a pension fund making no ongoing contribution for 30 years and still have several hundred thousand euro in the pension fund when you retire.

Yet still people pay into pension schemes sacrificing current accessible income for a future return, which, in the case of defined contribution schemes, cannot be guaranteed. Investing in property should be no different, some ongoing contribution should be expected by the investor to realise the longterm return.

How much would one have to contribute monthly to a pension scheme over 30 years to have an inflation proof monthly income equivalent to €1500 to €2000 per month in today's money?

Fol20

FishOnABike wrote: »

Yet this is what anyone contributing to a pension fund is doing.

Expecting a property to pay for itself with a monthly positive cash flow and ending up owning the property outright after 30 years without having to put any ongoing money into acquiring the property is akin to expecting to be able to take money out of a pension fund making no ongoing contribution for 30 years and still have several hundred thousand euro in the pension fund when you retire.

Yet still people pay into pension schemes sacrificing current accessible income for a future return, which, in the case of defined contribution schemes, cannot be guaranteed. Investing in property should be no different, some ongoing contribution should be expected by the investor to realise the longterm return.

How much would one have to contribute monthly to a pension scheme over 30 years to have an inflation proof monthly income equivalent to €1500 to €2000 per month in today's money?

-Are you really comparing a pension vehicle to property?

-Have you ignored all the taxation benefits they offer? With property, you also have a massive up front cost of at least 100k.
-If you put in 100k up front to a pension with no contributions for 30 years at a compound growth rate of 5pc, you will come out with 432k.
-The big difference here is that you just forget about it for 30 years with no work involved and here you go, take your cash. With property, you have a lot of on going work, stress and lastly risk of taking on debt which can limit your ability to borrow elsewhere > Do you really think this is for a like for like example.

A fairer example would be buying a property within a pension vehicle vs a standard pension but not the way you compare it.

terrydel

The Student wrote: »

I would completely agree with this sentiment. Being a landlord is a business pure and simple with the intent on turning a profit. People seem to completely forget this concept when it comes to the rental market.

With the ongoing anti landlord stance and the constantly changing "goal posts" expect to see increasing numbers of landlords exiting the market.

Yes it is a business by and large, but historical factors, government policies etc created a whole swathe of people who got into not as a business but thru accident/necessity etc etc. And our government has no interest in helping this people, so most are getting out of it.

terrydel

Fol20 wrote: »

-The big difference here is that you just forget about it for 30 years with no work involved and here you go, take your cash.

I dont think thats necessarily true. God knows what will happen to pension funds before they mature. They could all go tits up overnight, the last 10-15 years have thought us thats more probable than possible.

FishOnABike

FishOnABike wrote: »

Yet this is what anyone contributing to a pension fund is doing.

Expecting a property to pay for itself with a monthly positive cash flow and ending up owning the property outright after 30 years without having to put any ongoing money into acquiring the property is akin to expecting to be able to take money out of a pension fund making no ongoing contribution for 30 years and still have several hundred thousand euro in the pension fund when you retire.

Yet still people pay into pension schemes sacrificing current accessible income for a future return, which, in the case of defined contribution schemes, cannot be guaranteed. Investing in property should be no different, some ongoing contribution should be expected by the investor to realise the longterm return.

How much would one have to contribute monthly to a pension scheme over 30 years to have an inflation proof monthly income equivalent to €1500 to €2000 per month in today's money?

You can’t not compare buying and renting out a property with putting money into a pension. One is purely an investment/savings while the other is running a business with an element of investment as part of the deal.

It’s like comparing saving money in a savings account with buying and running a shop.

FishOnABike

Aryanna Few Stint wrote: »

You can’t not compare buying and renting out a property with putting money into a pension. One is purely an investment/savings while the other is running a business with an element of investment as part of the deal.

It’s like comparing saving money in a savings account with buying and running a shop.

For the small time landlord, property is a sideline to their main income source. It is more of an investment than a living. Many (especially self employed) look on it as a way of providing for their pension.

Large investors (including pension funds) may treat it as more of a business but also see it as an investment to pay future pension liabilities.

For the small time property owner it is very much like putting money into a pension, for the large investor much less so.

Obvious Desperate Breakfasts

Fol20 wrote: »

Your logic does make sense however how about a business owner. Their asset can go up and down however they expect profits from that business. Its unrealistic to expect a ll to suffer for 30 years and then to finally come out the other side then start earning money. Even if someone is playing the long game, putting yourself through undue sacrifice of that nature is too much. You need to encourage people to invest in this asset class or btl will continue to decrease. Right now as you can see in another thread created today, rental supply decreased at 2pc last year. if its decreasing at that level at the highest ever rents, how can it survive when he get to the bad times again.

That might be what happens though. There are no guarantees. If the market rate rent never covers all your costs, it’s the long game. If you think landlords should be guaranteed profits then minimum rent controls must be what you’re suggesting.

Fol20

terrydel wrote: »

I dont think thats necessarily true. God knows what will happen to pension funds before they mature. They could all go tits up overnight, the last 10-15 years have thought us thats more probable than possible.

I said that to emphasise a point. Yes depending on what stage you are at in life, you might change it but thats more along the lines of ticking a box compared to all the work that goes with managing property.

Fol20

Obvious Desperate Breakfasts wrote: »

That might be what happens though. There are no guarantees. If the market rate rent never covers all your costs, it’s the long game. If you think landlords should be guaranteed profits then minimum rent controls must be what you’re suggesting.

Im completely against any type of controls as it stifles the market as what we are observing right now. Normally with massive gains, you would see more enter the market which would naturally balance things out. Due to rent controls among other things, we are still seeing a declining market when if it was functioning properly, you would expect it to be increasing.