Why do Landlords feel entitled to rent increases?

B_S

https://www.boards.ie/discussion/comment/118575953#Comment_118575953

But you're assuming that the goal of the landlord was to have someone in the apartment at all times, where my position is as stated above:

"He most likely played the long game, gambling that it was worth holding out for more so that when the market improved (from a landlord's perspective) he'd have a higher base rent from which to derive a return.

The market suggested he charge a particular figure. He chose not to."

That market "dictated" a price to him. He set the rent higher. Not much of a dictator, that market.

fliball123

https://www.boards.ie/discussion/comment/118575974#Comment_118575974

Wow really so the goal of a landlord is to not make money? Remember this was a time when there were no rent pressures zones and a landlord could up rent by any amount they wanted. So why would they leave it lying idle for a year? Doesnt make sense to me or to any other sane person. The most likely reason is they were in denial about the market price they could achieve for the property. Just as an aside I bet he got less rent a year on from renting to yourself and going through a year of not having anyone in so your theory makes zero since. Rents dropped by half during that 3-5 period. So do you think each and every landlord got together and said lets all drop our rents together ..1... 2. ... 3 DROP.. Really is this what you think happened or do you think there is a force there called the market that landlords adhere to or they lose money.

B_S

https://www.boards.ie/discussion/comment/118576037#Comment_118576037

I'm willing to believe that the landlord in question considered his options and made his choice. He was the owner of several rental properties, he understood the game, looked at prevailing factors, economic indicators, etc., and made a decision. You might think that it's better to have renters in your property paying rent at all times; that's a persuasive idea. But there's other rationales out there to motivate how you treat your rental properties. Perhaps he had no cash flow issues, and could afford the hit of having a property sit idle. After all, as we hear so often, there are costs associated with having tenants.

I'm not denying that the price of rents fell. What seems to be controversial is the idea that landlords have a say about what levels rents are set at. I don't understand why.

Dav010

https://www.boards.ie/discussion/comment/118575599#Comment_118575599

And you guys left. The market is you, not the LL. Also, if it was 2008, lots of empty houses, no tenants to fill them, hence why that LL had no tenants at the rate he was charging, chances are the LL rented for lower a year later.

fliball123

https://www.boards.ie/discussion/comment/118576085#Comment_118576085

Well if you can explain to me how rents dropped by 50% in the 3/5 year period after the 08 bust and your contention that its landlords and landlords alone that dictate the rent, then by your logic all landlords got together and dictated that there should be a 50% drop across the board (so paying themselves less) without the notion of their being a market which brings a price. Please go ahead explain as it would be completely out of character for a section of people who think are greedy?

B_S

https://www.boards.ie/discussion/comment/118576130#Comment_118576130

Perhaps he did. And the reason we left is that he set the rent at too high a level for us at the time. Perhaps, if he had set the rent at that "dictated" by the market, then we might have stayed. But the Landlord Set The Rent.

https://www.boards.ie/discussion/comment/118576134#Comment_118576134

I guess it was because renters spending power was curtailed and so the amount they could afford to spend on rent fell, so landlords had a number of choices including leaving their properties empty, or renting cheaper. Whatever way you want to split it: landlords set the rent.

fliball123

https://www.boards.ie/discussion/comment/118576164#Comment_118576164

Well you guessed wrong it was because that was what the market dictated. If landlords set the rent price back at that time surely (ye know being the greedy little pigs that you make them out to be) they would of all kept it at price point they had and they would not of dropped it by 50% in that time. You need to stop digging and you need to accept the reality and the proof that you cannot explain away without the notion of there being a market that drives price. Just to spin this like you a lot of tenants asked for a rent decrease at that time forcing landlords to lower their price. So do tenants set the price?

Dav010

https://www.boards.ie/discussion/comment/118576164#Comment_118576164

But you, being the market, affected the rental by leaving for a lower price accommodation. The consequence of that market force was that the LL lost out because his price was to high, and eventually would have had to lower the rent in all probability, in order to rent as the recession deepened. That is market economics and forces at play, in fact it is probably one of the simplest illustrations of it.

B_S

https://www.boards.ie/discussion/comment/118576195#Comment_118576195

You're ignoring the choices that landlords have. They don't have to have tenants. They can leave places empty. You know, like the landlord I asked for a lower rent did. Who saw what the market price was for the rent he could charge, and ignored it.

B_S

https://www.boards.ie/discussion/comment/118576200#Comment_118576200

I fundamentally disagree, though. At that point, the landlord was faced with a number of choices, including amending the rent on a property so that it was more in line with what the market was "dictating," or keeping it where it was and running the risk that the place would stay empty. Whether or not he made the "right" call in retrospect is immaterial; there was a market price which he ignored, for his own reasons.

Dav010

https://www.boards.ie/discussion/comment/118576219#Comment_118576219

Being stupid is not against the law. That LL probably thought there was a short blip in the economy, then realised to late that it was a recession. He was not the only one to make that mistake.

B_S

https://www.boards.ie/discussion/comment/118576236#Comment_118576236

100%. He saw the same market as everyone else, and maybe decided it was a blip. And so set the rent to fit with his interpretation of the conditions around him.

EDITED for clarity, originally read "...the market same as everyone else" which is not quite what I meant.

fliball123

https://www.boards.ie/discussion/comment/118576219#Comment_118576219

How am I ignoring that, I mean surely the notion of someone investing in a property is to make money? If they have no tenants and a mortgage they are losing cash hand over fist.

Your landlord was most likely in denial and thought things were not as bad as they actually where. A lot of people in that period were the same.

So in your scenario your landlord wanted x you wanted to pay x - y and the market dictated x-y, who lost out? You got a cheaper place to rent and the landlord lost a year of rent and then had to lower it to x-y even do they wanted x. Ergo the landlord didn't dictate the price it was dictated to him..Now answers on the back of a self addressed envelope with the answer of who dictated this new lower price to him?

Dav010

https://www.boards.ie/discussion/comment/118576232#Comment_118576232

Exactly, he either ignored the market (you) or didn’t understand it (other prospective tenants who would have rented at a lower rate), but just because a sector has outliers does not mean market economics does not exist. It probably just took your LL a bit longer than most to cop on.

B_S

https://www.boards.ie/discussion/comment/118576262#Comment_118576262

There's a lot of assumptions here that I tried to address a little earlier.

Not every landlord has a mortgage to pay. Not every landlord is relying on every drop of money they get from rent to make ends meet. Some landlords can take a gamble on leaving a place empty. The market price for rent for comparable properties is not the only contributor to the level a landlord sets their rent. It's true that the landlord didn't have anyone paying rent in that property for a time, but I'm willing to believe he made his choices based on careful consideration of the circumstances. He might have been wrong, sure, but he set the rent.

Who lost out? Impossible to say, especially in the long run.

B_S

https://www.boards.ie/discussion/comment/118576272#Comment_118576272

When have I denied that market economics don't exist, or market forces? All I've been saying is that landlords set the rent. The market price of rent for comparable properties is one of the contributors to the level they set the rent at, but it's not the only one.

fliball123

https://www.boards.ie/discussion/comment/118576297#Comment_118576297

OK answer the question I asked above?

So in your scenario your landlord wanted x you wanted to pay x - y and the market dictated x - y, who lost out? You got a cheaper place to rent and the landlord lost a year of rent you said it was advertised for the year meaning he wanted it rented out not lying idle as add space costs money and then had to lower it to x - y even do they wanted x as you have clearly stated he would not drop the price. Ergo the landlord didn't dictate the price otherwise it would of stayed at x the new price was dictated to him..Now who dictated that price to your old landlord. Forget about anything else answer that question please?

Dav010

https://www.boards.ie/discussion/comment/118576312#Comment_118576312

I’ve done as much as I can.

B_S

https://www.boards.ie/discussion/comment/118576324#Comment_118576324

"...it was advertised for the year meaning he wanted it rented out not lying idle." Not complete. He wanted it rented out at price X. At the time he set rent X, he was willing to leave it empty until he got the price he wanted. He made that calculation. At a point, he made a different one.

Ray Palmer

https://www.boards.ie/discussion/comment/118575599#Comment_118575599

I would have turned it around if a reasonable profit was being made and the law allowed me to increase with a reasonable rate of expense. Due to the RPZ I could not do this. Instead I had to spend more money therefore the rent has to rise accordingly. That makes rent more expensive and less available. You are also saying I am maximizing profits but don't really understand investment and that my "maximum" profit is just the same profit margin on further investment. Is a 4-6% profit really a maximum profit? Is it an offensive amount? Have you any idea on the profit margins on other products and services. When I am paying tradesmen massive day rates am I being fleeced or it is just the costs I have to pass on?

Can you explain what you think is a fair return for a landlord on property? What about any other investment. It really doesn't sound like you understand some basic economic principles. Who do you rent from if there is no profit in it? Or how about the government encourage you to buy to rent out and then keep on increase expense and taxes on you and then start talking about forcing you to always rent it out even when you want to sell. They even devalue the property for it to be a rental again for your troubles.

houseyhouse

https://www.boards.ie/discussion/comment/118576344#Comment_118576344

But crucially he did NOT actually rent it at price x.

B_S

https://www.boards.ie/discussion/comment/118576412#Comment_118576412

I'm genuinely open to correction on this, but I have not judged anyone, landlords included, for their decisions/motivations in this thread. My position has been, since the start, that Landlords Set The Rent Of The Properties That They Own. I am being 100% sincere when I say that I am surprised that this is controversial.

To your point; you stated that "It would have just been turned around quickly but because the rent was so low there was not much point renting it as the rent had not been increased in so long." So; you were faced with a choice. Rent the place as was, within the increased limits allowable under the RPZ stipulations, and make a similar return on your investment that you had been heretofore. Or improve the place and rent it for a higher price, again as allowed by the RPZ stipulations. I am being completely genuine when I say that I believe you came to this decision having considered your options, and that one of the pieces of information you had to hand was the market price for similar properties, but it wasn't the only one.

It's possible that you'll be making a higher rate of return on your investment now, even with the expense of renovating it taken into account, through increasing the rent. I don't know. But you will have an improved asset on your hands in the long term.

B_S

https://www.boards.ie/discussion/comment/118576432#Comment_118576432

100%. And so, having tenants in the place at that time was not the only deciding factor.

Pawwed Rig

https://www.boards.ie/discussion/comment/118575691#Comment_118575691

Yes and they set their rents appropriate to the market. You saw yourself that when the landlord charged too much you left to find somewhere cheaper and that no one would rent that property as it was above market value.

At the time the majority of landlords were forced (by the market) to reduce their rents to try and recoup at least a portion of their monthly outgoings. At the time it was a tenants market so the willingness of tenants to pay was the driving force in the market supply > demand.

Now it is the opposite. It is fairly basic supply and demand 🤨

fliball123

https://www.boards.ie/discussion/comment/118576344#Comment_118576344

So the landlord wanted price X and was forced to drop it to X - Y so he could get it rented ergo he did not dictate the price. Who dictated the price to him?

B_S

https://www.boards.ie/discussion/comment/118576490#Comment_118576490

"Yes and they set their rents appropriate to the market. You saw yourself that when the landlord charged too much you left to find somewhere cheaper and that no one would rent that property as it was above market value."

Some landlords set their rents appropriate to the market. Some don't. Like my landlord. Who set the rent at a different level to the market price for comparable properties. Because landlords set the rent.

B_S

https://www.boards.ie/discussion/comment/118576525#Comment_118576525

He did, himself, with eyes wide open. He considered his options, looked at the market, did his sums, and decided to set the rent at X. After a while, when those sums/options/etc. changed, he set it at X-Y. Again, with his eyes wide open.

Dav010

https://www.boards.ie/discussion/comment/118576528#Comment_118576528

And the market duely penalised him for it.

Is your experience indicative of a functioning market, with one silly LL, or one silly LL indicative of a non functioning market? Scale is important when considering that question.

fliball123

https://www.boards.ie/discussion/comment/118576540#Comment_118576540

Once again in the scenario outlined the landlord wanted X and was forced to drop the price to X-Y you have given me no reason why he would do that other than external forces forced him too. Your saying landlords are greedy and yet they all dropped their rents during that period by 50% it seems out of kilter so once again who forced all the landlords to do this?

B_S

https://www.boards.ie/discussion/comment/118576545#Comment_118576545

The market penalising him (if that is indeed what happened), is not the same as the market setting the rent.

And I never made claims for whether or not the rental market was a functioning one. Of course, scale is important. Of course, many landlords prioritise having tenants paying rent at market rate over leaving a property empty and gambling on a higher base level of rent in the future. Of course, many landlords rely on money they get from rental properties to pay the mortgage on said properties.

None of that contradicts the idea that Landlords Set The Rent On The Properties They Own.