Irish Property Market chat II - *read mod note post #1 before posting*

The Student

https://www.boards.ie/discussion/comment/120067357#Comment_120067357

I find this post bizarre to say the least. The average landlord has one or two properties. Being a landlord is like any other business. We enter it to make a profit. if you get a rogue tenant like the one highlighted costing the landlord €70k in lost income and at the same time being unable to reduce his losses can financially destroy him.

If a landlord has paid tax on his profit and the value of his asset has fallen below its purchase price due to a fall in property values, changing legislation etc and the landlord is still liable to repay the capital outstanding is this a "fairly crap landlord"

DataDude

If there is indeed a market cooling, it’ll be interesting to see how new build prices react as they continue to push higher at a relentless pace.

Archers Wood in Delgany have just added another €35k to 3beds in their new phase. Just a couple of months later!

Now €575k, vs €540k for the phase launched in October 2022 and €485k in September 2021!

https://www.myhome.ie/residential/brochure/archers-wood-delgany-wicklow/4469814

Donald Trump

https://www.boards.ie/discussion/comment/120068800#Comment_120068800

Do you understand the concept of "average"?

If 1% of tenants pay no rent, then that will reduce the expected rent received by landlords on average by 1%.

If you are unable to manage your investment, then yes, it would make you a bad landlord. Same as how if you bought a pub and ran it into the ground and weren't able to pay back your loans when plenty of other publicans were then that would make you a bad publican. BTW, if you are paying back capital then you are leveraging up your own capital via loans. That is your own choice to leverage up the risk.

The sense of entitlement from a certain cohort is fairly astounding. It's a real extension of the public sector mentality. The State should not be propping up the market for the benefit of such people.

Could someone please explain to you know who the implications for a publican if the Government brought in legislation which allowed customers to sit drinking beer for hours, free of charge, and the publican is neither able to stop serving them, or remove them from the pub.

Donald Trump

https://www.boards.ie/discussion/comment/120068875#Comment_120068875

Oke Dokey

Ozark707

https://www.boards.ie/discussion/comment/120068247#Comment_120068247

What % of the price do you estimate the repairs coming in at? Maybe ask the vendors to meet you somewhere in between? If they don't have any other bidders you probably have a decent chance of getting it accepted.

Reason for this suggestion is that I am seeing in the US that vendors are offering to contribute to upgrade costs in order to close a deal. The market there is really heading south so you can see why a vendor would do that.

Donald Trump

https://www.boards.ie/discussion/comment/120068897#Comment_120068897

That is not an uncommon thing in the US market in general to have something like that where the vendor gives money back towards things.

SwimClub

https://www.boards.ie/discussion/comment/120068875#Comment_120068875

And the price of a pint for paying customers could only be increased at a rate of inflation minus eight percent and you have to continue to serve them forever unless you can find some other mug that will take over the responsibility from you!

rob316

https://www.boards.ie/discussion/comment/120068807#Comment_120068807

New builds won't cool at all they will continue to rise as the government will continue to expand taxpayer subsidies to them to keep construction going.

FedoraTheAura

https://www.boards.ie/discussion/comment/120068897#Comment_120068897

It’s very hard to know, it was rented for a long time and very badly kept. The vendor doesn’t seem to have cared much about the condition of the place, so it’s difficult to know if issues are superficial or worse.

Thanks for the advice though, I’m going to see what the inspection comes up with and if there’s anything serious, demand a reduction. The previous offer was about 10% under asking.

It’s interesting how much it puts people off for a place to not be turnkey, when factoring in high cost for repairs these days.

Bass Reeves

https://www.boards.ie/discussion/comment/120068456#Comment_120068456

I expect at least one of my children will buy land, not necessarily one of my sons. It's a genetic fact. My mother bought land,( my father died when I was very very young), his brother bought land. Both my maternal grandfather and great grandfather bought land. My better halfs father and grandfather bought land. We bough our farm together. The genetics ate there to indicate that my children will as well. However generally it something you do in your 35-55 year age profile.

I have explained how it is getting harder for LL to .some a profit. But you choose not to understand. Not all LL are unprofitable but the risk factor now for them has a substantial number 4-5k units/ year leaving the business.

Again I will explain inheritance issue. In most other business owners are allow d to extract 750k in capital tax free it's not available in rental therefore inheritance tax is more of a factor.

But you choose to be blindsided by what appears to be a hatred off LL. One must have taken a boyfriend, girlfriend or spouse off you the way your dislike of LL comes through.

Few rental investment will start to repay the owner before 25-30 years. The assumption of many is that the LL should then rent it at reduce rates when it starts to make a return. I no other investment choice is that a factor.

You start throwing red herrings all over the place drifting from one to the other. All most LL want is a fair regulatory system and the stopping of flipfloping by the government and the stopping of using the rental section as a political football by the opposition.

Like any other investment if you make a good one you should be allow to reap it's reward.

Donald Trump

https://www.boards.ie/discussion/comment/120069470#Comment_120069470

Could your son get a loan, buy 20 acres somewhere in the country and just rent it out and sit by passively while it pays for itself? The answer is that no, he couldn't. I know that, and you know that. His rental income wouldn't even cover his interest costs, never mind the capital repayments (which he would need to repay out of his after tax income). And that would even be availing of full tax relief for a long term lease. So i don't see why you think residential investors should expect it to be so as some kind of right. You are the one who brought up buying land here, not me.

You are wrong on how you define "repay the owner". I think what you mean is that it will be 25-30 years before the tenants have paid enough to fully cover the cost of the repayments for the person who got the loan. So that the "owner" is now debt free AND has a house paid for.

The inefficient people need to be let be shaken out of the market if there is a drop this time. It shouldn't be propped up for their benefit.

Bass Reeves

https://www.boards.ie/discussion/comment/120069547#Comment_120069547

Property is not a passive investment of you want to make a return. It the failed assumption you are making. I will put 100ish hours per property into there management every year along with costs. Costs are top of that. I can farm a 60 acre farm in about 10-15 hours a week and I am not living on it. It's return is about 10% at present and that is not including capital appreciation. It has the added advantage that everything spend on it was allowable against tax and losses are allowable against income tax.

Remember this property is NOT a passive investment

The Student

https://www.boards.ie/discussion/comment/120068820#Comment_120068820

Your tone is very condescending and if you want to take this discussion there then bring it on.

Average is irrelevant to an individual. Managing of risk allows the risk taker to reduce exposure to risk when the risk increases this is not the way the private landlord market works because the State changes rules, introduces RTB etc and makes it almost impossible to evict non paying tenants for months and even years in some instances.

It is you who think landlords have a sense of entitlement. The State has failed its obligations to house people not the landlords. I don't care who I rent to once they pay the rent. I have seen the rent I received fall through the floor when the last recession hit with tenants moving from property to property to suit themselves. Did we get any help/handout? No because we were seen as the evil landlord.

Donald Trump

https://www.boards.ie/discussion/comment/120069652#Comment_120069652

Yes, average is the important factor as regards returns. In addition, idiosyncratic risk should not be rewarded in investments. That you, as an individual, are unable to manage and diversify that risk, does not mean you should be entitled to be compensated for it. That is a basic tenet of investing. You could, for example, get together with 20 of your buddies and pool your properties. That would greatly lower the risk of you suffering a catastrophic disaster due to an extremely bad tenant. That is why a market will not compensate you for such a risk. And it is why you should expect to be compensated for it.

And has nothing to do with the topic of the thread anyway. Only insofar that I would say that there should be no government intervention propping up the market for individual investors who made bad decisions as regards taking on risk they couldn't manage. If things turn sour and loans aren't repaid, they banks should be recovering those properties more quickly this time around.

growleaves

Can we get a dedicated thread for Donald Trump vs everyone re small landlords?

Seems to just spill across topics all over this forum, now the main thread is taken over by this thing.

fliball123

https://www.boards.ie/discussion/comment/120068780#Comment_120068780

I never said it should be free but your trying to paint a picture that landlords are creaming it but they are not the only ones creaming are the REITS and as you alluded to if it was all so easy and all so profitable why are the majority of landlords running for the hills. I don't even have to argue with you the proof is in the pudding. You asked the question I gave you answer.

Donald Trump

https://www.boards.ie/discussion/comment/120069780#Comment_120069780

No, I am sure that some are struggling and I think those would be wise to cash out if so. There might be a deluge over the next year or so once there starts to be a bit of a dip and people then rush to cash out. Plenty hang in because they think "I got 10% on paper last year, I might get 10% again next year". Most people will not be able to time the absolute top of the market. Most who try to, usually lose out. If you are able to manage ok though, then by all means stay in it for the long term.

fliball123

https://www.boards.ie/discussion/comment/120069834#Comment_120069834

Donald you just need to research small landlords and look at the amount of property available to rent in the country and how it has fallen sharply over the last couple of years the vast majority are struggling or at the very least see an investment property or 2 as no longer being viable for them. Look I guess its good for people buying but those who cant buy and have to rent its kind of tough sh1t. The other side of this is if REITS that are buying Irish property get caught up and have lots of exposure if property prices do drop they may well have to sell assets to settle redemptions and other expenses we may see a clusterphuck of a scenario coming in the next 12/24 months.. It is happening the UK currently with the likes of Blackrock who are deferring redemptions.

Donald Trump

https://www.boards.ie/discussion/comment/120069865#Comment_120069865

I wasn't aware that the current market was particularly good for buyers. There was an article a few days ago that house prices are at their most unaffordable since the peak just before the last crash.

The evidence to date is that not enough are leaving the market to make a dent in availability for buyers, or at least that there are enough willing buyers to keep the prices high.

There is another aspect to the low number of rentals on the market too. One being that there will be a feedback effect. Insofar that because there is a shortage, people will be less likely to move from where they are now. If I am renting in Rathmines in Dublin and then I want to move to Stoneybatter to be closer to work, well in normal circumstances I move to Stoneybatter. Then my existing landlord puts my Rathmines place up on the market. The fella renting in Tallaght then moves to my place in Rathmines and his place is put up and so on and so on. What I am saying is that a small increase in availability at the end of the chain could increase the turnover on those sites a fair bit. It wouldn't necessarily be linear.

realitykeeper

https://www.boards.ie/discussion/comment/120068336#Comment_120068336

True but an eviction is an eviction regardless of whether the person is a renter or a mortgage holder. In fact, most people evicted and made destitute in the 19th century were tenants yet it is they who get evicted no prob but not the people who are not paying their mortgage and who are therefore responsible for houses being kept off the market. This is why house prices and house rents are so high for everyone else.

If eviction was an instant and automatic consequence of defaulting on a morthage, house prices would plummet and rents would also moderate for those who prefer renting (you would have a choice if house prices crashed).

Some of the renters pleading with the RTB not to be evicted are families which nowhere to go and no prospect of renting anywhere else. Their stories are every bit as harrowing as those proffered by people who don`t pay their mortgage even though we know people sometimes choose not to pay their mortgage for reasons founded in greed, for example they might not like being in negative equity.

The Student

https://www.boards.ie/discussion/comment/120069759#Comment_120069759

Brilliant

realitykeeper

https://www.boards.ie/discussion/comment/120068807#Comment_120068807

New builds are of little to no consequence. What determines house prices is the eviction rate of mortgage defaulters in the houses that already exist (i.e. the 99% of the market). As long as defaulters are protected, house prices will stay elevated for everyone else. The government doesn`t care because high house prices will make a profit for their precious NAMA and then they can go on pretending that bailing out the banks was not an act of monumental stupidity (notwithstanding the fact the bailout included Anglo which was so toxic it was kept separate from NANA). Besides, house owners like when their house has a high price even though it is still the same four walls.

mcsean2163

My only point on small landlords is that they pay tax. Given housing assist is about a billion and there's probably another 2 billion in rent paid in Ireland, let's round total rent payments to 3 billion. Assume interest relief etc. and say average mam an pop landlord pays 33% rent. That would be one billion to the exchequer for schools roads etc

Canadian pension REIT pays absolutely no tax in Ireland.

Driving out the small landlords is driving out tax payers from the rental sector. Nevermind that a lot have lower rental rates etc.

Donald Trump

https://www.boards.ie/discussion/comment/120071038#Comment_120071038

REITS were brought in and given favourable terms in order to attract them in to pump money into the sector to inflate the prices for the benefit of existing property owners.

I wouldn't care it they were all made leave tomorrow. Kick them out and let them take their investment billions out of the market. (And tighten up on the regulations and rules so that the have-a-go landlords are better regulated.) Most of the people whinging about them might find that they are worse off on paper though when they go.

realitykeeper

Why is it okay to evict a family of tenants but not a family of mortgage defaulters? If more mortgage defaulters were evivted, the houses they occupy would mean more housing for sale and for rent to other families who are renting/saving for a mortgage. The more houses that are added to the market (by way of evicting defaulters) the cheaper houses and rents become.

What most people don`t understand is that the existing housing stock and what happens to it, is what determines house prices and rent. New builds are of no consequence. Sometimes mortgage defaulters deliberately default as happened during times of negative equity. Besides, they took on their mortgage and they defaulted. Why should they be protected while everyone else suffers high rent and impossibly expensive house prices?

timmyntc

https://www.boards.ie/discussion/comment/120071722#Comment_120071722

Most of the people whinging about them might find that they are worse off on paper though when they go.

Yes I agree. Most of the people whinging in this thread about small landlords will find they are worse off when they go. As has been the trend in this country for the past 5 years. As all the reports on the matter indicate.

Its funny, there seems to be consensus on this fact almost everywhere except for some people in this thread.. hmmm

Donald Trump

https://www.boards.ie/discussion/comment/120072711#Comment_120072711

Thread is about the property market Timmy. Not for more have-a-go-amateur-landlords to have a whinge about laws they imagine exist etc.

If a REIT with thousands of properties packs up and dumps a portfolio of thousands of properties it would have take a lot of money out of the market and put downward pressure on it.

It's fine if you don't understand that.

mcsean2163

Have to say I'm a bit disappointed by the lack of new properties becoming available in Wicklow . My home figures for all Ireland November v today

12 nov 2022 16620

6 Jan 2023 14177

I wonder if some families have been answering the call to help Ukraine with houses they might have put on the market? Is January just quiet? Anyone any ideas when we can expect supply to pickup?

Donald Trump

https://www.boards.ie/discussion/comment/120072959#Comment_120072959

I'd expect that when there is a bit of a slowdown or decrease, some people will hold on in the hope that it is temporary. That is always the way. Especially if they are afraid of selling their own in a temporary dip and replacing that when the market shoots back up

Probably a few hoping the lending cap increase gives a temporary bump as well and holding off until that filters through