Landlords selling up - Rents rising

Diemos

Rents rising as landlords sell to cash in on property price boom - Independent.ie

I'm not a landlord but I think the attitude towards landlords in the past 20 years has been particularly unfair. Just mention landlord on social media and the lynch mob will descend in droves.

Politicians pushing populist laws against landlords and making it a less and less attractive investment vehicle.

Tenants rights have been boosted dramatically in the past decade, a lot of the commentary was the bring more professionalism to the industry but there has been no reciprocal strengthening of landlord rights.

Now, surprise, surprise, there are very few rental properties available and rents are soaring, homelessness is on the rise again.

The response seems to be surprise pikachu face.

Have we seen an irreversible change in the Irish market, where the small landlord is gone and replaced by large faceless organisations for good?

I've rented in the past, I believe it's an important part of the housing eco system, I think we've really shot ourselves in the foot here.

I'm curious to hear what other think.

JimmyVik

Any landlords I know have sold now.

I was seriously looking into buying to let for a couple of years and did major homework.

The risk was massive and the reward was not.

So I didnt go ahead. I honestly dont understand why anyone would become a landlord now.

irishhombre

the tax on rental income is crazy is it not, does it even pay to be a landlord now a days?

lawrencesummers

https://www.boards.ie/discussion/comment/117732810#Comment_117732810

No.

A lot of accidental landlords over the last decade getting out now that the can recoup what they spent.

Mitzy

I was a landlord & sold up last year.

There was so many factors for me making my decision but mostly due to the uncertainty regarding legislation & if I got a tenant that decided not to pay I could be left footing the bill for god knows how long which was not something I could ever afford to do. You rightly point out that the perception that landlords are the scum of the earth. You will see all over the media and comments on sites & discussion channels what the view of landlords is. It is justified in some circumstances but not all. I could tell you some horror tenant stories too.

Maybe professional landlords are the way to go but I think they are dictating the price of rents as they can afford to leave units empty unless they get the price they want. I would be concerned for the long term effect that will have on the market here.

In general any small time landlord is crazy to stay in the game, especially if they have to mortgage the property. For me it was certainly a headache I no longer needed & so glad to be free at last.

bernard12

A zero sum game, landlords selling homes to families who use it as PPR is a great outcome.

A Shaved Duck?

We have an apartment bought on a tracker back in 2006, been renting for the last 5 years and even with the interest rate as low as ours is we are barely breaking even. Between high taxation, paying the PRTB and a lack of government policy that is remotely fair for small landlords means we are cashing in our chips after our current tenant.

Ive been asked by multiple people to rent as its in good location, but we feel the risk is not worth it as we have been lucky to have good tenants up to this point but as people point out one bad tenant and we are screwed.

https://www.boards.ie/discussion/comment/117732861#Comment_117732861

Do renters not come into your equation?

JimmyVik

https://www.boards.ie/discussion/comment/117732861#Comment_117732861

Not really.

Just as an example. Last year a friend had a large 4 bed house, rented to 2 couples and 2 single people.

One couple got pregnant so decided to move out and rent a place of their own.

My friend decided to sell so gave everyone their notice to move out.

A young couple bought the house.

Now I assume they will start a family themselves eventually, but for now thats 6 out and 2 in.

listermint

https://www.boards.ie/discussion/comment/117732872#Comment_117732872

So you are breaking even and having your property paid in full for you resulting in your owning the property when all is said and done.

Seems like a good deal no ?

Often I think people seem to think you have to make massive margins to come out ahead. There is tenants there banking a large asset for you...!

A Shaved Duck?

https://www.boards.ie/discussion/comment/117733040#Comment_117733040

We are accidental landlords and have to weigh up the potential of risk associated with potential delinquent renters along with a government that is doing very little to protect us. By saying barely break even we are still paying in money after tax and upkeep along with having been in negative equity for a long time.

There is no incentive for us to take a chance that we will be lucky with tenants indefinitely. There is some equity to be taken out that we can invest in our own home and cut our Large Asset free.

Jmc25

Small landlords selling, while a factor in our current predicament, are not the main reason for rising rents.

The main reason for rising housing costs for both renters and buyers, is overall lack of supply.

That said, have significant sympathy for some small landlords and would absolutely sell if I were one myself.

whisky_galore

https://www.boards.ie/discussion/comment/117733018#Comment_117733018

Given the choice, the two couples and 2 singles would rather not be living cheek by jowl. But there isn't any choice, and even less choice with every passing week. I think once restrictions are fully lifted people will review where they are headed in life like they did with careers and just emigrate.

House-shares might be fun in your 20's but like the Danny Glover quote you're too old for this sh1t beyond that.

.42.

I’m delighted private individual landlords are selling.

https://www.boards.ie/discussion/comment/117733930#Comment_117733930

Nor for learning how to speak apparently.

https://www.boards.ie/discussion/comment/117733969#Comment_117733969

I actually share your sentiment. I think landlordism in Ireland should now be left to large scale investors who run it like a business with properties in large urban markets, prompt increases, higher set rents and terminations based only on business considerations. What’s not to like?

Sierra Oscar

Certainly a sharp contrast to the predictions of a collapse in rental prices as a result of the pandemic. We will see elevated rental and property prices until the Government significantly intervenes in the market and dramatically increases supply.

usernamegoes

https://www.boards.ie/discussion/comment/117734299#Comment_117734299

And for those of us who want to invest in resi property we can do it via REITs and be diversified. Institutional landlords are the way to go.

Mad_maxx

https://www.boards.ie/discussion/comment/117734498#Comment_117734498

Unfortunately they don't accurately track the market, they provide a good yield but no capital appreciation

usernamegoes

https://www.boards.ie/discussion/comment/117735288#Comment_117735288

Looks to me that the share price has gone up 50% in the last five years in IRES

markw7

Good news if you want to buy. Where are these on the market though, doesn't seem to be a lot of stock appearing.

Sierra Oscar

https://www.boards.ie/discussion/comment/117736227#Comment_117736227

The council are purchasing many of them, especially in apartment developments. Some aren't even appearing on the market with owners approaching the council directly, that's certainly the case with DCC anyway.

Crazy situation whereby the Government is essentially competing with first time buyers rather than actually increasing the overall availability of housing stock. Such disfunction.

JimmyVik

https://www.boards.ie/discussion/comment/117736299#Comment_117736299

I bought a house last year.

Before i had even moved moved into or even started the work on the house i got an offer through the EA i bought it from for way more than id paid for it from an unnamed entity.

I was cheeky and asked for even more. They said yes.

So I made just shy of €100k for doing nothing.

I found out later that it was the council who bought it.

JimmyVik

I see in the news today SF first order of business when they get into government will be to ban evictions if a landlord wants to sell.

Effectively using a landlords money to make them work for them for the rest of their lives.

You invest money in a house. Rent it out. You cant sell it when you want to. You cant raise the rent.

So what will be being a small landlord look like from now on?

So you are getting a government job that you cant quit, paying high taxes for it even if you make a loss, and they will be using your money to give you this job.

Caranica

https://www.boards.ie/discussion/comment/117736467#Comment_117736467

Chances are that would be unconstitutional.

markw7

https://www.boards.ie/discussion/comment/117736451#Comment_117736451

Jesus that's a feckin joke if they're at that craic. It's like they want to drive the prices up even more and have the taxpayer foot the bill.

enricoh

https://www.boards.ie/discussion/comment/117736451#Comment_117736451

A nice touch! They spend money like water. I seen on the news last night a wooden air filter installation on the main street in cork, the council are renting if for e350k a year! They may rent out more of them.

Let's hope the multinationals money never dries up and the squandering can last forever!

JimmyVik

https://www.boards.ie/discussion/comment/117736498#Comment_117736498

Never stopped them before.

As with all their other legislation any person who challenges it would be ruined.

Bot financially if they lost, even if they didnt lose they couldnt afford to be dragged on for 10 years through all the different courts.

And then socially with the treatment they would be bound to be given by the media.

Just not worth the risk.

Mad_maxx

SF would send the REITs for the exit too so that option won't save property investors either

JimmyVik

https://www.boards.ie/discussion/comment/117737171#Comment_117737171

I think property investors are gone. Any left just havent had a vacancy yet. But I think any left will hit the exit as soon as they get the chance.

And they are probably better off out of the business altogether at this point anyway. And certainly better off getting out before they get locked into renting their property forever.

Its what all this government tampering is doing to normal renters is the problem. Not one intervention they have made has not resulted in even higher rents.

Caranica

https://www.boards.ie/discussion/comment/117737022#Comment_117737022

The President won't sign legislation if it's unconstitutional. Doesn't need to go anywhere near the courts. It's not as if SF can/would try to do this quietly.

JimmyVik

https://www.boards.ie/discussion/comment/117737358#Comment_117737358

Like rent caps and RPZs.

Of course he will.

They will just put a 4 year time limit on it and then just extend the time limit forever.

Ray Palmer

https://www.boards.ie/discussion/comment/117736227#Comment_117736227

It really isn't good if you want to buy because more people are going to need to be housed so prices go up. It also puts more pressure on people to buy because there is nowhere to rent. House prices go up and less places to rent while we still don't have enough houses being built to house people. Decreasing occupancy in the existing stock is terrible for everyone looking but benefits the seller. At the moment I have figured it is better to leave a property empty for 2 years rather than rent due to RPZ and current construction costs.

Ranjo

I sold our rental property, which was originally our PPR back in 2013, at a loss after buying it in 2002. We had some equity in it, so came out OK.

I still rejoice at exiting the rental market to this day. I don't even have one of those really bad renter stories, but it's still a painful experience for no gain other than a marginal property value increase which you only may eventually get and pay CGT on anyway.

JimmyVik

https://www.boards.ie/discussion/comment/117736583#Comment_117736583

I saw planning permission going in for a huge extension and stables.

I think I know who they bought the house for.

mrslancaster

""The President won't sign legislation if it's unconstitutional. Doesn't need to go anywhere near the courts. It's not as if SF can/would try to do this quietly""

Always wondered how that works... probably stupid question but does the president have to sign off on every amendment to an act, eg if theres a new SI, or are later changes just authorised by the relevant minister?

Edit, sorry a bit off topic but helps to understand how changes can happen

spaceHopper

My father had a house in flats and after he passed away I managed it for my mother. At some point I’ll inherit it but I’m not sure if I’ll keep it or sell it. There is a family attachment to it and I know my father would have wanted me to keep it. But is it worth the hassle. 

I view this type of renting as a temporary thing, it’s something you do when you are in college or first start working. You do it, have the craic and eventually settle down get your own apartment or house, a step on the ladder. It’s not renting for life, which I think is bonkers in Ireland, we aren’t setup for it. 

Our housing model should be 

Small private or big institutional landlords renting to a young generation who then either

Move into their own place or even first step.

Move into social housing provide by local council.

Rent allowance or HAP should be a short term thing to get you over a problem, aka no job or poor paid job but after a time you either stand on your own two feet or you move from it to social housing.

Housing people and families in private rental housing isn’t working it’s too expensive and it’s not fair on the person or family as they have very little security.  What happens when they retire?

There was a guy on news talk last night he rented a house to the council, they rented it to a tenant who is nightmare he’s now selling up and the council have given him the two fingers and left him with the tenant and calls from guards and neighbours about her behaviour. Even with her antisocial behaviour he can’t evict her because of the pandemic. That protection is lapsing but it will still take 18 months to get her out. She should be gone in 7 days. 

agoodpunt

Its a race for LLs to get out before SF get in dont know how the reits will respond they have share holders and pension funds and they will want a return

One thing for sure supply of rent capped rentals will disappear to be replaced with new expensive rentals

The ridiculous long notices to vacate are already a hinderance to a sell a property

markw7

https://www.boards.ie/discussion/comment/117737417#Comment_117737417

Oh lovely, the neighbours must delighted!

redarmyblues

I was considering selling my rental due to the hassle and the current hostile environment towards LLs but after reading Eoin Ó Broin's comments I am definitely selling. Why are Gov and its opposition incentivizing investors to get out of the private rental market when they should be doing the opposite.

“Crucially, one of the big concerns we have is, in the last quarter, data from the Residential Tenancies Board (RTB) shows that the number of vacant possession notices to quit, of landlords selling properties, has dramatically increased"

Has the man no sense of self awareness, he is one of the biggest reasons for the flight of small time Landlords from the market.

agoodpunt

Friend of mine just issued 6 notices with solicitor affiadavitt selling up, all professionals some nurses they where crying he was fkcuing crying too

but next 2 years it will be dyer out there LLs who sold out drinking champange "now you got what you deserve.. lol

many sitting tenants just wait for same it was a bad policy to overtax and demonise a mostly good business to cover failings in our planning and mismanagement of social then screwing private accomodation

DCC buying all around dublin paying over odds in panic more champange lol

jmlad2020

As someone who may move back to Dublin to work, is the rental scene really that bad?

There is definitely a reduced quantity of professional rentals on the market, but they are still being advertised, at before Covid level prices. Nothing out of the ordinary. You'd think more people working remotely means less demand.. What can I expect as a prospective renter? Will it be difficult?

The J Stands for Jay

https://www.boards.ie/discussion/comment/117736467#Comment_117736467

If you make a loss, you wouldn't be paying tax.

vandriver

https://www.boards.ie/discussion/comment/117732872#Comment_117732872

I'd love to see some figures to back up your 'barely breaking even' claim.

Is it a... rent 18 grand, mortgage 12 grand ,tax 5 grand ,I'm only making a grand,it's not worth it type scenario?

Barely breaking even on cashflow is not the same as barely breaking even on profit.

Del2005

https://www.boards.ie/discussion/comment/117758789#Comment_117758789

The government wanted professional landlords and did everything in its power to bring them to the market. Now we have professional landlords leaving property empty to avoid RPZ legislation and private landlords selling as fast as possible.

You are screwed because of government intervention.

JimmyVik

https://www.boards.ie/discussion/comment/117758863#Comment_117758863

You can pay tax on a loss with property rental in Ireland.

I couldnt believe it myself when i found that out.

A Shaved Duck?

https://www.boards.ie/discussion/comment/117759340#Comment_117759340

I dont really know what point you are trying to prove but if you want to imply something other than what i've posted fill your boots. Reality is you dont have a clue.

JimmyVik

https://www.boards.ie/discussion/comment/117759340#Comment_117759340

I wonder why they all are leaving then?

Maybe they are making a profit but the amount of hassle is just not worth the profit they make.

Or maybe the potential for financial ruin is just too great and its time to leave the business to the REITs and councils.

The J Stands for Jay

https://www.boards.ie/discussion/comment/117760473#Comment_117760473

What sort of expenses would you be incurring that can't be offset against the rent?

marieholmfan

https://www.boards.ie/discussion/comment/117732872#Comment_117732872

Breaking even as in getting an asset for nothing?

DubCount

https://www.boards.ie/discussion/comment/117760682#Comment_117760682

Being a LL does not mean getting an asset for nothing. If you buy a rental property, you pay with cash you already have or the capital repayments on a mortgage. You pay full price for the property out of cash from your own pocket. Its not free.

While you own the investment property, you get income from rent (hopefully) and expenses (interest on mortgage, insurance, accountant fees, PRTB registration fees, repairs and maintenance etc.). Hopefully your income is more than your expenses, and you make a profit. You pay tax on the profit, and keep the balance.

The truth is that the profit to be made is not as great as it needs to be, to make the investment worthwhile, and to make sense with all the hassle and risk involved. There are easier ways of making money, and accumulating wealth over time.

purpleshoe

https://www.boards.ie/discussion/comment/117760682#Comment_117760682

I can never understand this logic. The LL has their money (& borrowed) on the table, most likely hundreds of thousands. It is far from risk free, and it has never been a case of getting an asset for nothing.

I strongly view, for the short term anyway, that the tenant is in touching distance of getting an asset for nothing because "It is my constitutional right, and I know my rights".

I can't blame the small/traditional LL's for selling up. They have been scapegoated for societies housing problems, rode sideways with taxes, and with legislation that erodes their control of their property and exposes them to the risk of delinquent tenants with zero come back. In a few more years all rentals will be REIT, or similar owned. These are operations with deep pockets and their own legal departments. They won't mess around, they won't be flexible, they won't compromise their bottom line.

If you think todays LL's are demons, wait until you see what is coming behind them.