Why do Landlords feel entitled to rent increases?

jface187

https://www.boards.ie/discussion/comment/118217185#Comment_118217185

I'm on the verge of homelessness myself. As is the original OP. I helped homelessness charity's in the past and had people stay on my couch when they had no where to go. Again another negative assumption on your part.

You obviously not putting 2 + 2 together. If there so many laws and ads on the side of the bus, it would indicate that people did abuse their powers in the past and maybe even still are.

You obviously don't know how it feels to be a tenant or able to empathise with someone in that position.

DoctorEdgeWild

https://www.boards.ie/discussion/comment/118217260#Comment_118217260

I think it might simply come down to the old classic ‘Why wouldn’t someone want to make as much money as possible?’ question.

When I sell a car, I try to get the absolute best return I can on it, landlords are the exact same when they sell the use of their property.

You’re absolutely right that some landlords are bad, same as some car sellers, bakers, butchers etc. It’s just someone selling what they’ve got/produce/provide.

Pawwed Rig

https://www.boards.ie/discussion/comment/118217285#Comment_118217285

I hate greed being used as a term. Anyone who tries to better themselves in this country is often referred to as greedy. Professional classes especially but landlords often get lumped in there too. I think there is a fair bit of begrudgery for anyone who does well for themselves. LLs are an easy target and get the emotions going given our history as tenant farmers. Mostly just lazy words and begrudgery imo

https://www.boards.ie/discussion/comment/118217073#Comment_118217073

You have to remember that investing in rental property is for profit. Charging market rate is not a rip off, it is the usual rate charged in a free market and is influenced by demand and supply. The only victim LLs are those unfortunate enough to have bad tenants, but their experience is an example to others of what could go wrong.

There are laws in place to reduce the amounts rent can be increased, what have they done? Ensured that if a LL doesn’t increase when allowed to, profit may be reduced on their investment. Rents should have dropped significantly last year when so many left their rentals, but LLs, realising that by dropping rent they would be locked onto the new lower rate by the Laws introduced to prevent rents rising, instead left properties empty until the market picked up. It is a prime example of how interfering in a free market has actually had the affect of making the situation worse.

If you want to understand why LLs raise rent, leave sentiment out of it and consider only that it is a business decision. And that is the way it should be.

DoctorEdgeWild

https://www.boards.ie/discussion/comment/118217327#Comment_118217327

It’s weird, landlords seem to get the ‘greedy’ tag applied far more often than anyone else selling stuff or providing a service. My landlords are great, been in my place 5 years now I think, really good relationship with them.

growleaves

https://www.boards.ie/discussion/comment/118217348#Comment_118217348

We live in a time of very pronounced asset inflation.

However unlike other assets like diamonds, artworks, sports teams, stocks and precious metals people need to rent or own so they have somewhere to live.

There are a few bad eggs among LLs in this country, which isn't a slight against the majority of good ones.

My worst experiences with renting were when living as an immigrant in a foreign country. When you are a rootless outsider you are a sitting duck for every sharpster going full stop.

DoctorEdgeWild

https://www.boards.ie/discussion/comment/118217418#Comment_118217418

I may have gotten lucky in that case as I’m an immigrant, of the two landlords I’ve had, absolutely brilliant experiences. Obviously not denying the terrible experiences many people have had.

It’s certainly an essential thing to have, but it shouldn’t be up to private individuals to provide it for society.

Although I’m 100% on board if anyone wants to provide me with diamonds or artworks. 😁

AmberGold

Someone said it earlier, Revenue make the most out of renting by taking 50% of rent in tax.

The return on capital from renting for Landlords is minuscule. Far better putting the capital to work in a good ETF.

I’m getting rid of two rentals shortly, I personally feel sorry for my tenants both non Irish families receiving HAP who are paying well under market rates but unfortunately market forces prevail.

Having poured cash into setting these up it’s no longer viable.

I can’t wait to be rid of these properties, dealing with tenants, HAP, the council, RTB and revenue is a constant pain and not worth the hassle. If the return was higher it might make it worthwhile.

I rewarded good tenants with low rent and have paid the price.

Blue4u

https://www.boards.ie/discussion/comment/118217260#Comment_118217260

No you are not on the verge of homelessness. If you knew anything about someone who is homeless or anything that goes along with it you wouldn't be throwing out this rubbish.

I know exactly how it feels to be a tenant.

sk8board

https://www.boards.ie/discussion/comment/118217667#Comment_118217667

(full time LL)

the current market still has too many accidental LLs with one rental. From an income perspective, they can’t live off the rent from one place, but are heavily taxed on it as a result of having another job - and from a capital appreciation perspective, the market is very hot at the moment, so it’s an ideal time to get out.

2/3rds of all landlords only have one rental (120k from 165k).

4,400 landlords left the market in 2020, but that’s just the ones who notified the RTB - the real number is higher still.

That 2020 total included a lengthy period where tenants couldn’t be moved due to Covid restrictions, so 2021 will surely be higher still.

15-20 LLs successfully exiting the market every single day of the year is a LOT for a country the size of ours

https://www.boards.ie/discussion/comment/118215512#Comment_118215512

That reminds me of this article I saw a few weeks ago on the journal.

https://www.thejournal.ie/residential-tenancies-board-5588965-Nov2021/

Choose what spin you want to put on it.

Not enough landlords being prosecuted as the headlines suggest.

Or landlords not doing all that much illegal despite all the hype. I had few problems with any of them in all the 15 or 16 years I rented.

Blue4u

https://www.boards.ie/discussion/comment/118218350#Comment_118218350

You point at that article and then look at DCC and in 2019 the debt for rent was 33m. During the period that was built up only one tenant was evicted.

Did they do a similar analysis to see how many tenants got evicted for non payment of rent and how many reports?

We should get both sides of the story.

jface187

https://www.boards.ie/discussion/comment/118217818#Comment_118217818

How do you know I'm not? How arrogant of you. You know noting of my situation and the way you comment on shows who you really are and how much you care about others.

redarmyblues

https://www.boards.ie/discussion/comment/118207588#Comment_118207588

Unfurnished lets were subject to rent controls in the past and that killed the market completely and ushered in the era of furnished lets whiah are now subject to rent controls and the private rental market where I am is not dead but is in the ICU.

redarmyblues

https://www.boards.ie/discussion/comment/118207950#Comment_118207950

On the continent a large percentage of LLs are institutions, what are called cuckoo funds by the populists here who will only accept of ideologically pure accommodation as long as its not in their constituency.

Blue4u

https://www.boards.ie/discussion/comment/118218507#Comment_118218507

You know nothing of mine. You are online complaining because your rent has increased.

Tell you what, go out to an actual homeless person and explain your situation and see what they say to you.

jface187

https://www.boards.ie/discussion/comment/118219438#Comment_118219438

I never claimed to know anything of you or your life. I said I got a vibe from your posts and the way you responded seemed to prove that point.

You outright said I'm making my situation up to get sympathy here, essentially saying I'm lying.

You assumed I never did anything for homelessness people and when corrected on that, your now saying I should go talk to homelessness people?

Well I have and talked to plenty who are homelessness due to not being able afford anywhere and fall through the cracks.

I'm not sure what you can accuse me of next to try and make yourself feel better?

Blue4u

https://www.boards.ie/discussion/comment/118219819#Comment_118219819

Look it is clear from the posts you have never done anything with homeless people and don't actually understand what the term homeless means. I already made all my points, I don't need to talk about "vibe" which you seem determined to. Best of luck in your future endeavours.

Manion

It's all a bit tangential really. Some people consider themselves homeless if they are living with family and on a housing list. Some see loosing your home and being homeless as well even if you've the capacity to get another place.

Certainly you can see people getting very desperate these days for a place to live. It's one of the reasons I use a letting agent, you get a lot of people applying who are certainly deserving and in need.

Rent controls only protect people who have a home, not anyone searching for a home and the more controls we introduce the harder is for the have nots, for the people genuinely homeless. I could charge half the rent tomorrow, it's still only going to help one family. We oppose buy to let's, we vilify and criminalize landlords but non of this is helping.

JimmyVik

https://www.boards.ie/discussion/comment/118225987#Comment_118225987

A couple I know bought a house recently. I was amused a little bit when we were out and they were telling people that they had finally bought their house after 2 years of homelessness. They were staying in his parents house being waited on hand and foot for 2 years ffs.

Manion

That's the problem with the housing crisis, it's actually a dozen different problems together and addressing one impacts others. 4 people want a house, a sitting tenant, a first time buyer, a graduate looking to move out and someone looking to downsize.

Any policy to benefit one is to the detriment of the other as long as supply is constrained. Leo came out the other day and said young people want studio apartments and was rounded upon for being out of touch yet talk to any young single person about how hard it is to get accommodation. The same people who are banging on about the housing crisis object to student accomodations and shared living spaces because you cannot raise a family of four in them.

Bass Reeves

https://www.boards.ie/discussion/comment/118228427#Comment_118228427

As David McWilliams says you should never let the perfect get in the way of the good

steddyeddy

https://www.boards.ie/discussion/comment/118195901#Comment_118195901

Actually it's not as the price of drugs do affect the end user as they become unaffordable to the HSE. Take cystic fibrosis for instance. There are drugs that could significantly enhance the lives of those with CF and countless other illnesses but the pharmaceutical industry raise the price of drugs well above the cost of manufacture, research and marketing price. We cant expect them to act as a charity though right? This line means nothing in reality. No, no-one should have to act like a charity to provide housing, health or food but can you blame people for getting angry when they price it out of the reach of a lot of people?

steddyeddy

https://www.boards.ie/discussion/comment/118203896#Comment_118203896

But I am not attacking the idea of being a landlord as a moral failing. I am defending the right of people to label rent increase above what most people can pay as an example of greed. I understand that some landlords are trying to pay of a mortgage and I have sympathy for that but I can't have sympathy for a landlord trying to pay off a buy to to let mortgage with astronomical rents. That's a bad business model that shouldn't be rewarded.

Manion

https://www.boards.ie/discussion/comment/118267766#Comment_118267766

It's not greed, it's maximizing investment return and now that rents are capped at inflation, every failure to increase is in effect a rent reduction. You talk about business models, buy to let can be an effective business model and can work well for renters, the issue is how state interventions are limiting it. We're getting to the point where no small scale rental business model will be workable in Ireland for the rental market. Which just leaves large institutional investors that are basically price setters or the state. That's not going to be good for people seeking short term accommodation for a year or two. If being a landlord was such a source of excessive profit than why the Exodus. I'd have never chosen to be a landlord, frankly it's a lot of hassle and the tax man takes most of the revenue.

jface187

https://www.boards.ie/discussion/comment/118228427#Comment_118228427

I think the problem was Leo was trying to get out answering the question he was ask, by saying that people marry later and young people need studio apartment and the TD was out of touch.

They are great at waffling and not answering the question.

Shelga

Just a general question- how does the tax paid on rental income differ between a small-time landlord and a REIT?

I used to kind of harbour the somewhat simplistic view that all landlords were somewhat greedy, until I realised how much they pay in tax on their rental income. I'm currently looking to buy a place- say my mortgage is €900. If I rent that place out for €1600, I owe roughly €6400 in tax for the year, or €533 per month. Renting it out for €1600 just means I break even (very roughly). I still believe that anyone who's even in the position of having a second home to rent out is doing better than 90% of people under the age of 40 in this country, but it's not like they're hoovering up all of this extra cash, especially if you factor in things like repairs, new boilers, wear and tear etc.

How does a REIT pay tax? I've never fully understood- I think it's something like they pay way less tax upfront, but their shareholders will pay tax on their dividends or something? Not much use to Revenue though, if the fund is not based in Ireland?

Shelga

Actually, how is it fair though that a tenant has to pay the cost of another person's mortgage, plus all of their tax associated with it? Would a reduction in tax due on rental income alleviate some of the expense, on both sides? Cover the shortfall with a huge increase in tax on vacant properties (yes yes, hugely simplistic I know...)

Pawwed Rig

https://www.boards.ie/discussion/comment/118276836#Comment_118276836

REITs are obliged to distribute a certain portion of their profits. Can't recall the exact figures but iirc it is 90%. These are then taxable in the hands of the recipient. If it is an Irish individual they will pay tax at marginal rate. A foreigner may not suffer any tax depending where they live. A pension fund investor will not suffer any tax etc etc. Different rules depending on who the investor is

Manion

Are you sure about your figures there? On a rental income of 1600 you're most like paying tax at the marginal rate of 52%, so it's coming out at roughly 10k tax less any expenses.

Regarding vacant property, who owns these vacant homes is the big question? My own property was vacant for roughly 18 months while my father was dying. It all big talk about vacant property until people realize a substantial number of cases will be highly messy.

https://www.boards.ie/discussion/comment/118277123#Comment_118277123

A tenant does not have to pay the cost of another persons mortgage, they have to pay the cost for the service/accommodation provided. What the property owner does with that money is their business.

Great post, OP.

It's a total and utter racket.

jface187

https://www.boards.ie/discussion/comment/118277314#Comment_118277314

I think in every area people know where there is houses going empty. Just left there for various reasons.

People don't take in account problems like your own. So it hard to say how that tax would work really. But people think it will be a quick fix solution.

https://www.boards.ie/discussion/comment/118276836#Comment_118276836

https://www.rte.ie/brainstorm/2021/0513/1221319-ireland-housing-property-reits-tax-investment-funds/

Shelga

https://www.boards.ie/discussion/comment/118277314#Comment_118277314

It’s 52% of the amount left over after you deduct mortgage interest, management fees, wear and tear etc, right? My figure was just an approximate estimate after I inputted those amounts into an online calculator.

Manion

OK, fair enough if you have those expenses. It seems you're estimating nearly 7K in yearly expenses to get the tax down. It looks like you putting Expenses against the tax liability as opposed to the taxable income. If you have a 100 euro expense, you still need to pay 48 euro out of your own pocket and depending on the nature of the expense you actually may only be able to claim 12.5% of the cost in a tax year.

If this is seriously something you are considering,make sure you've run the numbers right. It can be easier to work forward using profit as oppose to tax as a guide. So total income minus total expenses times 48%. By my estimate you're coming away just shy of 6K profit based on what you've outlined. An extra 500 euro a month hardly seems worth putting up with people thinking you're greedy scum and you're carrying a mountain of risk at that. Get a Tennant who even moderately damages the place or overholds or even **** happens and the boiler goes and suddenly you're working for free.

As a consumer, rental accommodation is one of the most highly taxed services you can consume.

Pawwed Rig

https://www.boards.ie/discussion/comment/118277314#Comment_118277314

A good proportion of vacant properties are owned by councils. Dublin 1 and Dublin 2 have loads of derelict blocks of flats.

Blue4u

https://www.boards.ie/discussion/comment/118277866#Comment_118277866

How many out of interest?

Pawwed Rig

https://www.boards.ie/discussion/comment/118278057#Comment_118278057

No idea

Wanderer78

https://www.boards.ie/discussion/comment/118277340#Comment_118277340

.....and their business is ultimately to maximise returns....

Blue4u

https://www.boards.ie/discussion/comment/118278246#Comment_118278246

Like every other business in the World. The problem as well is that if the shoe was on the other foot, tenants would do the exact same thing.

I have seen plenty of properties rented by an individual, then they rent out the rooms themselves to people, if they do it correctly they can end up with nearly no rent at all while living in the property because the other tenants are paying for them. This has become more and more common. This is not the fault of the landlord but the actual tenant.

https://www.boards.ie/discussion/comment/118278153#Comment_118278153

It would be interesting to see if that is correct because if so then County Councils have a lot to answer for, I have googled and find nothing to confirm the statement is correct. Do you have any source?

Manion

I guess then you cannot really say a good proportion are council owned. This provides the breakdown: https://www.cso.ie/en/releasesandpublications/ep/p-cp1hii/cp1hii/vac/.

Of the 245,460 vacant dwellings in 2016 census just over 1K apartments (flats fit into this category) where long term vacant. So somewhere around .4%, and only a fraction of them would be council owned. Now, derelict on the other hand, I'd say you've have a point regarding ownership. In all of Dublin there was only 1,265 long term vacant properties and 284 boarded up but habitable properties. The idea that any policy changes around vacant property will have any positive affect is nonsense and a distraction. The CSO have provided a lot of information for people to be informed on this topic.

Pawwed Rig

https://www.boards.ie/discussion/comment/118278286#Comment_118278286

Just my eyes

Wanderer78

https://www.boards.ie/discussion/comment/118278286#Comment_118278286

yes, there is indeed a possibility, if the shoe..... the fault is actually the approach we have decided to take in relation to property and land, i.e. the financialisation of them, and its failed

https://www.boards.ie/discussion/comment/118278304#Comment_118278304

Land should be without monetary value?

Blue4u

https://www.boards.ie/discussion/comment/118278287#Comment_118278287

Very interesting. Also interesting in terms of the locations of the vacant properties based on the map but also the list below. If anyone believes taxing someone who owns a home in Blacklion in Cavan is going to resolve the housing crisis they are absolutely nuts.

Table 4.2 - Top 7 highest vacancy rate in towns, 2016

TownCountyVacancy rate  %

BlacklionCavan46.4

KeshcarriganLeitrim45.6

KilgarvanKerry43.1

DrumkeeranLeitrim38.4S

wanlinbarCavan37.8

TullaghanLeitrim37.3

BallinloughRoscommon36.8

Wanderer78

https://www.boards.ie/discussion/comment/118278342#Comment_118278342

its how we have approached it, we have largely privatised the whole process, which in turn has turned it into a massive wealth extractor, or whats called rent seeking behavior, we re effectively in a place where everyone loses.....

Blue4u

https://www.boards.ie/discussion/comment/118278304#Comment_118278304

Free houses for all :-)

problem you will find with that is then everyone will want a 5 bedroom with 5 ensuites plus a 1 acre lawn, if they don't get it then they will sit in a hotel/garda station till they get it

Wanderer78

https://www.boards.ie/discussion/comment/118278375#Comment_118278375

free houses what where and who? what are you talking about? most renters pay rent, and most citizens pay taxes.....

again, say wha?

Blue4u

https://www.boards.ie/discussion/comment/118278357#Comment_118278357

Not really. The way to fix the problem is mass building of apartments in cities with communal green areas for the residents. Playground etc in those areas.

The problem is...the irish people because they don't want that. They would rather faff around talking and blaming everyone, demanding a 4 bed semi with garden which is totally incorrect.