No more 4% rent increases

Flinty997

Fol20 wrote: »

Please explain why?

Every business where you have a rental model vs purchase model will always be more expensive to rent. EG car rental vs car purchase. tool hire vs purchase.

Not really. There have been times where is been cheaper to rent. At those time people said why would you buy...

Claw Hammer

CIARAN_BOYLE wrote: »

True.

Deposits are horrible in Ireland. Landlords abuse it and tenants deposits as rent. There's no protection and defense about either.

Tenants regularly get their deposits back as well as compensation on complaint to the RTB.
It is this "tenant is always a victim "narrative which is causing a lot of problems. Landlords have had to give back deposits because they don't have photographs sowing the condition of the premises at the start of then tenancy. As if the tenant moved in with filth all over the place.

mrslancaster

Claw Hammer wrote: »

Tenants regularly get their deposits back as well as compensation on complaint to the RTB.
It is this "tenant is always a victim "narrative which is causing a lot of problems. Landlords have had to give back deposits because they don't have photographs sowing the condition of the premises at the start of then tenancy. As if the tenant moved in with filth all over the place.

In the past most landlords here were very laisez-faire when letting compared to other countries, in my experience.
Landlords used to hand over properties worth hundreds of thousands without a lot of basic checks.

Years ago we rented abroad & the lease included photos of everything that had to be inspected & signed by both 'LL & tenant before keys were received so there were no disputes at the end. (witnessed by solicitor) Also we had to leave one place a few months before the fixed term was up. We forfeited our deposit & had to pay a penalty to cover the 'LL costs ie. his solicitor & estate agent. I never saw anything like that in an Irish rental contract.

Imo if deposits are restricted to one month & LLs are any more restricted in reasons to repossess their property, then LL's will get very particular & renting will be nearly as difficult as buying.

Time for the government to address the problem of rogue tenants, otherwise all the good tenants are the ones suffering.

Edit: just wondering if rental contracts are done by solicitors now or do some LL's still use the ones available online?

Fol20

Flinty997 wrote: »

Not really. There have been times where is been cheaper to rent. At those time people said why would you buy...

Please share a current example of renting where it is cheaper.

Even back in the recession 10 years ago, rents were still more expensive than a mortgage.

Piehead

What will the likely increase be allowed in October ?

agoodpunt

Fol20 wrote: »

Please share a current example of renting where it is cheaper.

Even back in the recession 10 years ago, rents were still more expensive than a mortgage.

Have a friend renting, has FREE refuse collection, wifi/tv, maintaince, no LPT, garden upkeep/comunal areas cleaning, insurance and heating included in the rent.
Sometimes there is more to the rent = mortage argument but want to ignore.
Private rental is a service and I believe thats with an old school LL not a reit, we dont want anymore

Rescueme0007

I've had the misfortune of being a landlord for the past 10 years . It has been a nightmare.

I just had my property returned by the tenant, it'll cost a significant amount to bring it back up to scratch. The government dipped into my pocket every year without ever having to run any of the risks.

I'll never rent a property out again. The media and other uber liberal donkeys behave as if all landlords are "vulture funds" with sweetheart deals from the government, living high on the hog. I've never had a let where I was paying less on the mortgage than I was receiving from the tenant.

The system is rigged to vastly favour the tenant. For that reason I'm out!

Dav010

Fol20 wrote: »

Even back in the recession 10 years ago, rents were still more expensive than a mortgage.

I beg to differ.

Gael23

landlord2020 wrote: »

I've 2 properties in NON-RPZ with rent well below but great tenants there a long time

Theres talk of the areas being designated as RPZ soon

I'd have to almost double the rent to get to market ... if I don't I'll be adversely affecting the properties value and future rent.

Whats the best thing to do?

If you do this you know you will lose good tenants so it’s up to you to decide what’s the best course

Flinty997

Fol20 wrote: »

Please share a current example of renting where it is cheaper.

Even back in the recession 10 years ago, rents were still more expensive than a mortgage.

Well I thinking of late 80s and early 90s in Ireland. But since you asked for a current example...

https://www.nytimes.com/2021/06/10/realestate/renting-cheaper-than-buying.html

https://www.bbc.com/news/business-57464534.amp

size5

is the new law regarding deposits coming in on July 9th as well?

The_Conductor

Piehead wrote: »

What will the likely increase be allowed in October ?

Current CPI shows an inflation rate of 1.95% on an annualised basis. It is expected that this will rise in the coming months on a temporary basis possibly to 3-3.5% before falling back again in 2022-23 as the economy normalises.

Aka you're looking at increases of between 2 and 3.5% for now- with lower increases as inflation dials back later in 2022/23

The_Conductor

Flinty997 wrote: »

Well I thinking of late 80s and early 90s in Ireland. But since you asked for a current example...

https://www.nytimes.com/2021/06/10/realestate/renting-cheaper-than-buying.html

https://www.bbc.com/news/business-57464534.amp

In the UK and the US- the reason that renting is cheaper than buying (and its only since the start of 2020 in both markets) is because a scarcity of property has led to property price increases which exceed rent increases.

Keep in mind- average rent prices went up by 7.1% in the UK in the last 12 months and by 6.8% in New York (I'm going with NY- seeing as its the NY Times that you're quoting).

Using absolute periods to try and make a point- isn't really a good idea- I could show you entire districts that paid no rent whatsoever in the 1960s-1970s (often belonging to emigrés who intended to come home to their family homes, but never did).

Rents, globally, shot up in the last 12 months- in most cases by significantly more than the 4% rent control levels in Ireland- however, house prices shot up by significantly more than this...........

It is a case, as usual, of robbing Peter to pay Paul.

Flinty997

The_Conductor wrote: »

In the UK and the US- the reason that renting is cheaper than buying (and its only since the start of 2020 in both markets) is because a scarcity of property has led to property price increases which exceed rent increases.

Keep in mind- average rent prices went up by 7.1% in the UK in the last 12 months and by 6.8% in New York (I'm going with NY- seeing as its the NY Times that you're quoting).

Using absolute periods to try and make a point- isn't really a good idea- I could show you entire districts that paid no rent whatsoever in the 1960s-1970s (often belonging to emigrés who intended to come home to their family homes, but never did).

Rents, globally, shot up in the last 12 months- in most cases by significantly more than the 4% rent control levels in Ireland- however, house prices shot up by significantly more than this...........

It is a case, as usual, of robbing Peter to pay Paul.

Wasn't making a point. Someone said than renting anything is more expensive than buying as if it's always a rule or something. But I remember when rents were cheaper than mortgages. Googling just brought up current examples.

The other thing is Ireland, and Dublin back then was an undesirable place to live. Half the city was derelict. That's no longer the case. It's now a desirable location internationally. The population has grown over a million in a short space of time.

Rents were always going to explode.

Fol20

agoodpunt wrote: »

Have a friend renting, has FREE refuse collection, wifi/tv, maintaince, no LPT, garden upkeep/comunal areas cleaning, insurance and heating included in the rent.
Sometimes there is more to the rent = mortage argument but want to ignore.
Private rental is a service and I believe thats with an old school LL not a reit, we dont want anymore

Tenants dont pay the LPT, the ll does.
Is your friend house sharing as that would be a very odd setup for an entire home. This doesnt tell me that rent is cheaper than a mortgage though.

Fol20

Dav010 wrote: »

I beg to differ.

Hey Davo, if you bought in the boom and tried to rent in the recession timeframe, then yes, market has changed dramatically and mortgages didnt cover the rent for a few years. This is an anomaly caused by the major shift in housing but i suspect for the most part, rent was more than the mortgage.

If you bought during the recession and rented during the recession, rent should have been more expensive.

DubCount

There is no "rule" that rents should be higher or lower than a mortgage. The price of anything is determined by supply and demand. At the moment, Central Bank lending rules are keeping a lid on buying prices as your income and deposit level will determine what you can buy, which in turn tones down demand when we have a lack of supply. This pushes the problem of housing supply into the rental market where you have more people looking to rent, and fewer rental properties to go around as Landlords sell up. If you took out all the state interference in the property market, buying to own would be more expensive, and renting would be cheaper.

Amadan Dubh

Rents being lower than a mortgage presumably should be the norm - the LL still gets the asset at a discount on the mortgage from receiving any rent even if the rent was only 50% of the mortgage!

Flinty997

Amadan Dubh wrote: »

Rents being lower than a mortgage presumably should be the norm - the LL still gets the asset at a discount on the mortgage from receiving any rent even if the rent was only 50% of the mortgage!

Rents are not really linked to mortgages. If inflation meant mortgages were sky high. But there was an over supply of rentals, rent would fall.

It's the demand and scarity of supply keeping rents high.

The_Conductor

Amadan Dubh wrote: »

Rents being lower than a mortgage presumably should be the norm - the LL still gets the asset at a discount on the mortgage from receiving any rent even if the rent was only 50% of the mortgage!

I honestly don't see how or why the price of a property or what its mortgage might be- should be linked in people's perception. Even investors don't do this- they do however look at the return on investment (ROI) ratio associated with an investment- and in the case of residential property in Ireland somewhere between 7 and 8% (given how risky residential property as an investment in Ireland is viewed to be). In some other countries- an ROI of between 3 and 5% is more normal.

If people who are renting residential property insist on having all manner of rights- these rights will be paid for in higher returns on investment demanded by investors- they're not free, there is a cost associated with them- and like it or lump it- it gets rolled into the rent levels.

It would be lovely if Ireland could move over to the European model for once and for all- and get over our legacy letting models that aren't working for anyone.

The_Conductor

Flinty997 wrote: »

It's the demand and scarity of supply keeping rents high.

And the perceived risk associated with letting residential property in Ireland.

Even if we were awash in property- this risk has a cost associated with it that will be factored into the rent for any unit being let.

Flinty997

The_Conductor wrote: »

And the perceived risk associated with letting residential property in Ireland.

Even if we were awash in property- this risk has a cost associated with it that will be factored into the rent for any unit being let.

If the was oversupply the risk wouldn't matter that much. There would always be somewhere cheaper.

The_Conductor

Flinty997 wrote: »

If the was oversupply the risk wouldn't matter that much. There would always be somewhere cheaper.

Cheaper doesn't mean anything- if a prospective renter has no intention of paying their rent (at all) and instead knows the system and chooses to play the system like a fine fiddle.

There are a cohort out there (admittedly- its only a small cohort)- who have this down to a fine art.

notAMember

The risk is to the landlord. Tenant can do substantial damage to a property and only be liable for deposit of 1 month. I had a tenant before who knocked a wall down.

Overholding is the other major risk. Tenant can stop paying rent almost immediately and it takes years to evict.

agoodpunt

Fol20 wrote: »

Tenants dont pay the LPT, the ll does.
Is your friend house sharing as that would be a very odd setup for an entire home. This doesnt tell me that rent is cheaper than a mortgage though.

My point is these are costs on top of mortgage, there are rentals include some utilities, his rent is €850



He lives in d7 old house in several 1 bed apartments the heating, wifi/tv and bins is provided free, he has his own lecly bill this is normal in pre63 though I admit some are not as well maintained/serviced from what he says.



He hopes his LL dosent sell so rules dont garrantee tenant security at all unless we ban or diswade that option next,

reduce supply policies is more popular going forward.

FileNotFound

notAMember wrote: »

The risk is to the landlord. Tenant can do substantial damage to a property and only be liable for deposit of 1 month. I had a tenant before who knocked a wall down.

Overholding is the other major risk. Tenant can stop paying rent almost immediately and it takes years to evict.

I think we all agree that the rules need work in relation to bad tenants and damage to property.

But on the other side upping the max a year when you have a good tenant who minds the place can leave an LL creaming it.

Rental properties are long term investments.

Their profitability of course comes down to what LL paid (mortgage size if they even have one), tenants being good, maintenance fees and property tax rate. And all this set against the potential rise in value of the property.

Fol20

agoodpunt wrote: »

My point is these are costs on top of mortgage, there are rentals include some utilities, his rent is €850



He lives in d7 old house in several 1 bed apartments the heating, wifi/tv and bins is provided free, he has his own lecly bill this is normal in pre63 though I admit some are not as well maintained/serviced from what he says.



He hopes his LL dosent sell so rules dont garrantee tenant security at all unless we ban or diswade that option next,

reduce supply policies is more popular going forward.

Ah if its pre 63, they usually have a higher ROI than standard rentals as they share one electricity bill etc among several homes

Claw Hammer

Fol20 wrote: »

Ah if its pre 63, they usually have a higher ROI than standard rentals as they share one electricity bill etc among several homes

Most pre-63's have coin meters or individual electric accounts. You are referring to co-living units which may or may not have been provided pre-63.

Flinty997

FileNotFound wrote: »

...
But on the other side upping the max a year when you have a good tenant who minds the place can leave an LL creaming it...

If they are creaming, it then You should buy a place a rent it. Since its a sure bet.

The rules are such as to penalize a LL who doesn't maximize the rent.
Even if they didn't, a private business whole purpose is to make money as possible.

FileNotFound wrote: »

Rental properties are long term investments.

Their profitability of course comes down to what LL paid (mortgage size if they even have one), tenants being good, maintenance fees and property tax rate. And all this set against the potential rise in value of the property.

It not just an investment. Its a business, it has lots of expense per year. So its needs cashflow and its need to pay it way.

If you think it doesn't work this way, get a 30yr loan, buy and rent a place an ignore it for 30yrs and see how that works out.

Flinty997

You are really looking for Govt control rent and housing. Not private sector at all.