2% max rental increase allowed inflation 7% plus

boardise

https://www.boards.ie/discussion/comment/118878176#Comment_118878176

You seem to have a very simplistic prejudiced approach to what is a complex situation....nothing is black and white as you present it.

If the housing and rental market was amenable to a quick easy straightforward solution -it would have been found and implemented by now. Characterising landlords as heartless extortionists is totally unjustified. It may provide some kind of emotional kick but otherwise contributes nothing to the discussion.

Jmc25

https://www.boards.ie/discussion/comment/118910838#Comment_118910838

No I'm not assuming that. Just pointing out saying landlords are subsidizing inflation is looking at the situation at quite an unusual point in time, ie over the last year or so.

Taking a different time period, as in my example, LLs are not subsidizing inflation for anyone.

Ray Palmer

https://www.boards.ie/discussion/comment/118912318#Comment_118912318

If you are selective you can make your claim which is my point. You are assuming that the majority have been doing well with inflation as oppsoed to prices dealing with actual increased expenses and losses made. You are making the assumption that all is profitable at lower rent for a long time and therefore they should not be able to stay with inflation at the least and not let free market work. ERSI just came out and said RPZ keeps rent low but causes a loss of properties as rentals

Jmc25

https://www.boards.ie/discussion/comment/118914887#Comment_118914887

The original point of landlords subsidizing inflation for tenants is selective in the extreme - that's the only point I'm making.

Fattybojangles

https://www.irishexaminer.com/news/munster/arid-40849616.html

Disgraceful the gubbermint interfering with the market the poor landlord.

o1s1n

https://www.boards.ie/discussion/comment/118916383#Comment_118916383

'Unauthorised development'

You really do like comparing apples and oranges, don't you?

Pussyhands

https://www.boards.ie/discussion/comment/118906215#Comment_118906215

This is the thing.

Landlords complaining about a 2% limit increase when inflation is at 7%....yet landlords had no problem putting rents up 5,10,20% when inflation was at 0%.

And clearly maths isn't a landlords strongpoint talking about inflation being 7% but rent only allowed increase by 2%...if a landlord charges 1800 a month, they'll make an additional 430 euro a year.

If labour/materials DID rise 7%....the landlord would need to be spending 6k a year on labour/materials to break even....

So yeah...no landlord is spending 6k a year on a property on repairs/labor.

A small % of a very big number is < A bigger percentage of a small number.

o1s1n

https://www.boards.ie/discussion/comment/118920574#Comment_118920574

Did you factor in 40% tax on the rental income?

Edit - had a look at your numbers, no you didn't.

If you did, your 'extra' a year of 420 euro would actually just be 258 and your '6000' would be 3,700.

Jaysus_1984

Apologies in advance for the long post.

I don't have particularly aggressive views on this, and I don't think all LLs are raking in cash/wealth with their greedy paws. (I wish that were the case!) However, even if a property doesn't make tons of money and just pays for itself (mortgage, insurance and tax gets covered), its still a good situation for the landlord, who basically has someone else paying for an asset they will end up owning at the end of 25 or 30 years.

Overall, both financially and for less tangible reasons, I feel it's better to have a tenant, taking care of the house, keeping utilities on, mowing lawns, cleaning to prevent mold, insects & stuff, and also keep the property safer from intruders and break-ins than a vacant property! They don't get paid for that, so, I think its a pretty sweet deal for the LL! As for repairs, its like any other asset - you own it, you pay to get it serviced, and replace or repair parts that don't work anymore!

The main fly in this ointment, I feel, is with "problem" tenants and the cumbersome eviction processes and rules. The part IV thing is quite skewed in the tenant's favour, eviction takes months and the property is left in a terrible state if the eviction processes are followed - there are cases where tenants have stolen TVs, trashed the place, and sometimes even left it in need of a complete carpet overhaul. There is no recourse for such losses for the landlord, and cases like these, after "refurbishment", often result in the costs being passed on to the next tenant.

If a landlord sees this as purely as a business from which to profit handsomely, in light of the current laws that care more about the tenant, they're probably better off renting to a company/MNC, where they are not only guaranteed stable returns, but also have near-zero chances of non payment or having to deal with part IV and evictions.

Or, if all the LL is looking for is to have the asset be zero cost for the duration of the mortgage - and this has worked well so far for me - find a way to rent to tenants with stable jobs who are saving up for their own house. Typically indian immigrants fall into this category and have fairly reliable income sources. The visas prevent access to state/welfare funds, so there won't be any HAP inspection hassles and list of ridiculous changes either.

Its pretty easy to circumvent the non-discrimination clause by screening viewings, asking for passport and visa scans as ID proof and doing employment due diligence on LinkedIn. This is unfair to the thousands of "good" tenants that are getting discriminated against, but if the government won't protect the LL, they need to furtively take additional measures...

mrslancaster

https://www.boards.ie/discussion/comment/118907912#Comment_118907912

Yes, interest rates on deposits are very low. Now I dont know how banks & large organisations access money markets, but I'd guess if the RTB/government are holding millions in tenants deposits they will not leave that money sitting in an account doing nothing, the money will be managed or invested by the NTMA and the state will benefit.

Tenant deposits are repaid when a tenancy ends which can be months or even years if its a long tenancy. If the plan is for the RTB to hold deposits maybe they won't actually be repaid, just 're-allocated' to a new landlord's name when a tenant moves, and topped-up by the tenant if they move to a more expensive rental. The only reason to repay would be if a tenant buys their own place, leaves the country or moves back to family. The state could have that money invested for years. Nice.

JimmyVik

https://www.boards.ie/discussion/comment/118942570#Comment_118942570

An interest free loan to the state from all the renters in the country. Very clever.

L1011

https://www.boards.ie/discussion/comment/118945157#Comment_118945157

The administrative costs of dealing with it would easily be more than the current rate at which the state can borrow from a single bondholder.

JimmyVik

https://www.boards.ie/discussion/comment/118945189#Comment_118945189

Sure get the landlord to pay the cost of dealing with it.

ted1

Cost of living.

if he doesn’t at least natch inflation he used effectively earning less

DFB-D

https://www.boards.ie/discussion/comment/118951282#Comment_118951282

Who is matching inflation these days?

Unless you happen to own oil reserves...

handlemaster

https://www.boards.ie/discussion/comment/118958738#Comment_118958738

Free market forces. Name a service or a product that doesnt move when cost go up ? They would be exceptions but most do in a proper functioning market

DFB-D

https://www.boards.ie/discussion/comment/118967379#Comment_118967379

Hmm, name a product or service which you will then claim to be an exemption? No thank you.

I think you can talk to anyone in business, between rent increases, energy costs, rising wages against a backdrop of decreased disposalable income and you will find the majority are exemptions except for essentials.

Share prices/ other investments haven't matched inflation.

Mad_maxx

https://www.boards.ie/discussion/comment/118968256#Comment_118968256

Stocks fall in times of inflation as bond yields rise

handlemaster

https://www.boards.ie/discussion/comment/118968256#Comment_118968256

Disposable income hasnt dropped. In fact people have saved more from the lock down period. Lots of money in the system now

Padre_Pio

https://www.boards.ie/discussion/comment/118969326#Comment_118969326

If inflation and costs rise, while pay is stagnant, then disposable income falls.

Savings are not a factor in this.

Donald Trump

https://www.boards.ie/discussion/comment/118969409#Comment_118969409

Well they are a factor.

If more people start saving rather than spending then that affects the economy as well. It would dampen down inflation if less people are spending, but also affect people whose products/services are no longer being bought to the same extent.

In the late 90's or early 2000's we had the SSIAs which were to dampen down spending at the time....only for big splurges when it ended.

Mad_maxx

I've one house in the private rental market and they are talking about leaving to buy locally as my house out of their reach, the rent is at least 175 euro per month below market rate so why they want to buy a fart of a house for circa 260 k which is inferior to where they currently live, il never know

More expensive things get ,the more they want to buy

Grumpypants

https://www.boards.ie/discussion/comment/118920574#Comment_118920574

Absolutely right. The only expense a landlord has is maintenance. Thankfully landlords don't eat, use electricity or need petrol.

JimmyVik

https://www.boards.ie/discussion/comment/118920599#Comment_118920599

40% would be a dream to most Irish landlords :)

spaceHopper

My aunt has two rental properties, she call LL's a 3rd sex, one everybody needs but everybody hates.

If you work for company, you expect an annual pay rise, you'd like it to match inflation. If a LL uses rent as their income as many do, surely it's ok for them to expect the same as you. OK 10 percent would be a bit much but it's not their fault or responsibility that the last 3 governments have made a mess of the private rental market or that councils stopped building social housing.

Pussyhands

https://www.boards.ie/discussion/comment/118973065#Comment_118973065

Landlords ate well upping rent by 10% a year when inflation was at 0%.

JimmyVik

https://www.boards.ie/discussion/comment/118973898#Comment_118973898

Its almost like someone burned the corn fields and killed the cows because they hate farmers, and now they are all wondering where all the farms have gone and where they are going to get something to eat.

FishOnABike

https://www.boards.ie/discussion/comment/118880661#Comment_118880661

I guess machinery or equipment is usually a depreciating assert.

Over the long term property is usually an appreciating assett.

Property prices have increased by approx 14% in the last year. This needs to be factored into calculating the capital gain / return on investment on property.

Grumpypants

https://www.boards.ie/discussion/comment/118973898#Comment_118973898

Tenants ate well when rents were falling by 20% a year. But they prob blew all that extra cash on avocado on toast.

Pussyhands

https://www.boards.ie/discussion/comment/118974176#Comment_118974176

Rent/Buying is the same stock.

If you buy a property to rent out, you're stopping someone from buying it.

I'm sure you'll be along now to say rentals are better because they house more people? The type of guy who adores having 3 bunkbeds in a tiny room.