Why do Landlords feel entitled to rent increases?

MacDanger

https://www.boards.ie/discussion/comment/118611565#Comment_118611565

So are you saying that rental income should be treated differently to other income to incentivise people to enter the market as LLs?

All that does in the present environment is push up the currently unaffordable price of houses even further.

MacDanger

https://www.boards.ie/discussion/comment/118611557#Comment_118611557

As above, all that does in the present environment is push up the currently unaffordable price of houses even further. It may help alleviate the rental crisis a small bit but at the expense of people trying to buy a home.

Like I said, there are other measures (such as making eviction of non-paying tenants easier) which can be implemented at very little cost to anyone.

Dav010

https://www.boards.ie/discussion/comment/118611583#Comment_118611583

If you want rents to fall, then you need for LLs in the market.

fliball123

https://www.boards.ie/discussion/comment/118611583#Comment_118611583

What I am saying is if the crucifixion of small landlords that has gone on for the last 10 years or so had not gone on and it was more profitable for a smaller landlord to remain in the game they would of but instead the REITS and Vultures got the honey from the government and now renters have to deal with entities that can leave large %s of rentals unrented to keep rents high.

MacDanger

https://www.boards.ie/discussion/comment/118611597#Comment_118611597

Absolutely. But providing tax breaks isn't the way to do it.

MacDanger

https://www.boards.ie/discussion/comment/118611608#Comment_118611608

I agree that REITS shouldn't get tax breaks, it makes no sense. However, the existence of them doesn't effect the profitability of existing landlords.

fliball123

https://www.boards.ie/discussion/comment/118611616#Comment_118611616

So crucifying, taxing at high rates (so not just income tax but property tax and insurance on top) and leaving them open to all kinds of exposure to unruly tenants was?? How did that work out?

rightmove

https://www.boards.ie/discussion/comment/118611212#Comment_118611212

but the number of ppl in those house increases if LL owns them then owner occ

rightmove

https://www.boards.ie/discussion/comment/118610664#Comment_118610664

I remember when the tenants were giving out about the joe soap LL.

if we had kept Joe in the game we'd be alot better off.

I reminds me of the way I am treated in a pub back home. I come in and dish the cash. Barman loves me ..easy cash. Doesnt care about the local lad who I am there to meet who is in there every night and abit stuck for money. Treats me like a hero and him like a dog... but who keeps the business going. the local lad is a but like the small LL and i am like the vulture fund. When I leave I go somewhere lese ...when he leaves the pub is in trouble

fliball123

https://www.boards.ie/discussion/comment/118611636#Comment_118611636

Yes it does they are charged different rates of tax. If you are a REIT how much do you pay and when do you pay expenses before or after tax,

small landlord have to pay

All income taxes

Property tax

Insurance - home, life, landlord - before tax

Ptrb fees - before tax

management fees - before tax

Mortgage - after tax

Interest - before tax.

The 2 sectors are treated completely differently and REITS were the long heralded great white hope for people renting. It hasnt worked out like that.

Why would anyone take the risk of a p1ss poor return with a chance of tanents acting the b0ll0x and stay in the market. It no longer makes sense and this can be seen by the numbers of smaller landlords.

MacDanger

https://www.boards.ie/discussion/comment/118611647#Comment_118611647

"cruxifying"? Go easy on the hyperbole, will you? If LLs are leaving because some nasty people wrote or said some nasty things about them, then they need to grow up.

The tax rates haven't increased as far as I'm aware so I don't see why that has been a big reason for LLs leaving.

As I've said numerous times now, making it easier for LLs to evict non-paying tenants would make a huge difference. Providing tax breaks would do little or nothing.

MacDanger

https://www.boards.ie/discussion/comment/118611650#Comment_118611650

So you'd put tax incentives in place to get LLs to enter the market and just ignore the obvious consequences that this would have on people trying to buy homes?

MacDanger

https://www.boards.ie/discussion/comment/118611680#Comment_118611680

If you're an existing LL, your profitability didn't change when REITs entered the market and they wouldn't change if those tax breaks were removed in the morning. I see how a LL looks at a REIT and sees that it's unfair but the LLs profitability is unchanged by the sweet deal REITs get

fliball123

https://www.boards.ie/discussion/comment/118611693#Comment_118611693

I dont even have to argue with you. The figures speak for themselves. Not just the amount of landlords leaving the market but also the current high rental rates and low rates of availability to rent. Way too much risk with a p1ss poor return on investment. So they need to grow up?? really and take a risk that their is no certainty of payment for long periods of time or that in an identical investment beside them that some behemoth of a REIT has bought is paying feck all tax in comparison to them. Why would you bother.

fliball123

https://www.boards.ie/discussion/comment/118611714#Comment_118611714

Well when you have people who can get a good ROI and your getting a p1ss poor one and the risk for you has greatly increased due to tenant laws you dont have to be a genius to monetize your asset using the current house price. As I say its no longer attractive to have be a small landlord

MacDanger

https://www.boards.ie/discussion/comment/118611732#Comment_118611732

And this goes back to my original point, the risk associated with being a LL (i.e. non-paying tenants) is where LL lobbying should be focused instead of whinging about tax which just makes them look greedy

DataDude

https://www.boards.ie/discussion/comment/118611596#Comment_118611596

Agreed on first point that tax breaks would just push up prices.

On second point, easier eviction of non-paying tenants would also push-up prices. The price a REIT/Individual Investor is willing to pay is based on the yield adjusted for the risk. The current biggest risk is a non-paying tenant. If that risk is substantially reduced investors would be willing to accept a lower yield and thus push up prices significantly.

fliball123

https://www.boards.ie/discussion/comment/118611747#Comment_118611747

Your forgetting about how other bodies are getting a favorable deal in what they pay in tax and in how taxes and other costs are paid. Your not going to change the issue with non-paying tenant we are effective a hughly left leaning country (and going further left by the day) now and anything given to those who are deemed put upon or the unfortunate is very hard to take away. They have tried to lobby about the tenants issue its fallen on deaf ears as how could any government give more equal rights to the nasty greedy landlords so now they are lobbying with their feet in selling up and they will continue to do so. So you say they are whinging about tax well to counter that with respect its like a gospel choir out there with people wanting and whinging for property for free or looking for people to rent or sell for less than what a person can rightly expect out there in the open market and of course just as you stated here it makes landlords look greedy for trying to make a decent profit.. Your argument would make sense if what your talking about actually brought more supply of rentals on stream and in turn more supply reduces cost. But don't let your view of the whinging landlord get in the way of sound economics.

https://www.boards.ie/discussion/comment/118611747#Comment_118611747

The tax liability wasn’t a concern of mine when I was a landlord. There’s 2 certainties, right?

The one sided rules that favour the bad tenants, the constant overnight changes to the rules and the uncertainty of exactly how much control I will have over MY property in the future.

I bought at the height of the boom, lost my construction job not long after, got into arrears and had to restructure mortgage. Got married and moved into spouses house and rented mine. Tenant turned into a c unt after a few years and eventually got him out last year. I’m in the NW and even though prices have increased, I wouldn’t have that much capital in it due to restructure. So I’ll leave it empty, use it for me and my relatives and wait for the next cycle.

Pawwed Rig

https://www.boards.ie/discussion/comment/118611193#Comment_118611193

Not really. The LL could have a self admin pension fund. That would be the closest comparison.

Incorporating a company to hold a residential property would be a terrible idea in most cases as you could actually increase the tax payable. Compliance costs would also wipe out most of the benefit unless you had multiple properties within the company (but it would still be a terrible idea).

Funds are scaleable as the expertise needed to run one is expensive as is the compliance cost but having hundreds of properties make those expenses feasible

1percent

https://www.boards.ie/discussion/comment/118612010#Comment_118612010

An idea I have from reading this thread, if a group of LLs combined their rental assets in to a Ltd. Each having share holding equal to the value of assets included. This could be calculated based on a yeid % of the curent rent of the property. Profits could be held in the company and used to leverage buying more properties increasing returns.

This would allow consolidation of maintenance, accountancy ,compliance ect costs.

It would also derisk overholding.

Any dividend paid would obviously be charged at 40%.

What do people think?

BattleCorp1

https://www.boards.ie/discussion/comment/118612180#Comment_118612180

Maybe a very stupid question but if a landlord has a mortgage on a property, how do they transfer ownership of that property to a ltd. company?

Pawwed Rig

https://www.boards.ie/discussion/comment/118612180#Comment_118612180

You have just reinvented a REIT 👍🏾

A limited company would be taxed on profit at 25% and whatever was left over would be distributed and taxed at 52% so total tax paid would be higher.

If you're a landlord in Ireland and not making money hand over fist, you should abandon ship. You're an entrepreneurial failure.

Ireland is the landlord equivalent of the Cayman Islands.

I'd love to be a landlord but unfortunately I have morals and principles.

houseyhouse

https://www.boards.ie/discussion/comment/118614282#Comment_118614282

Have you read the thread?

Dav010

https://www.boards.ie/discussion/comment/118614282#Comment_118614282

Lets hope you are not in charge of the household finances, morals and principles are not your biggest obstacle to successful investment in property.

https://www.boards.ie/discussion/comment/118614282#Comment_118614282

Your wish is our command. We’ve left in droves so don’t be crying now that you’ve nowhere to rent. Renters, eh? They’re entrepreneurial failures at life because they lack negotiations skills.

Yes, what I’ve just posted does sound silly. Just like your post!

Bring back the rolleyes emoji!

https://www.boards.ie/discussion/comment/118614402#Comment_118614402

Good riddance to you.

https://www.boards.ie/discussion/comment/118614340#Comment_118614340

I keep abreast of the 'woes' of the Irish landlord.

Being a landlord is an investment, not entitlement to an income (although in Ireland it's as close to a legal money printer as one will find).

Amazing that landlords think rental income is an entitlement but will reject HAP.

Dav010

https://www.boards.ie/discussion/comment/118614455#Comment_118614455

Regrettably your ignorance of the sector grows, LLs rarely if ever reject HAP based on income, it is mostly rejected due to issues with continuity of payment. The LA has no contract with the LL, and no obligation to pay HAP if the tenant ceases paying their meagre portion. If the LA were obligated to pay irrespective of the tenants paying their portion, there would be a different opinion of HAP tenants.