Culture around renting

Drunken Oaf

https://www.boards.ie/discussion/comment/119282250#Comment_119282250

Rules around HAP are deliberately left vague and confusing so too many people wont apply for it. In theory you're only meant to pay x towards it and the property shouldn't be worth more than y but in reality everyone knows these limits are too low so it is frequently exceeded. I know a few working single people living in 1 bedroom flats on HAP. As they should be- insanity to me is paying 700 of your own money to share a house. The problem is of course securing a 1 bed flat in the first place

The state essentially provides zero info via the awful Citizens Information website regarding the legal ins and outs of housesharing. It truly is appalling. And if i ever found myself in a situation where my options were to pay 1300 out of my own pocket for a flat or 600 in a house share, I'd pitch a tent outside DCC offices and starve myself to death before I'd resort to those two options.

phonypony

It's one thing to constantly re-register and create different iterations of the same topic on Boards and Reddit, trolling people with the same rubbish over and over. It's quite another to register a whole load of usernames and have a conversation with yourself.

Whatever your motivation is, please, get some help.

Drunken Oaf

https://www.boards.ie/discussion/comment/119282293#Comment_119282293

Hardly. All you do is add yourself to the housing list- a single man on 36k net or under is eligible to do this.

Then go rent a flat for about 1200 say, HAP will give you 600 towards it.

Again 40% odd of rentals in this country are HAP supported, pretty much all of them are far in excess of whatever nonsensical limits the government came up with.

PommieBast

https://www.boards.ie/discussion/comment/119281914#Comment_119281914

Maybe I am being ignorant but isn't HAP what used to be called Rent Allowance? When I moved to Dublin in 2013 "Rent Allowance Not Accepted" was everywhere, and since then it has been a whack-a-mole of proxies of it..

Drunken Oaf

https://www.boards.ie/discussion/comment/119282794#Comment_119282794

IIRC rent allowance is/ was only for people who were unemployed. People were refusing to get a job because they'd end up poorer by having to pay their own rent, so HAP was brought in to pay for workers rents.

Irelandsnumberone

https://www.boards.ie/discussion/comment/119282216#Comment_119282216

Simple solution to anyone asking do you rent, own, get HAP.

Tell them to mind their own business

Juran

Renting in Ireland is seen as dead money.

I own my house, rented a room for a few years 20+ years ago, never rented a whole place, but bought as soon as I got mortgage approval. Almost paid off, and monthly payments are a quater than similar houses in my area are being rented for.

Guy the same age as me, rented his own pad for 25 years in Dublin, he reckons he has spent €200k+ on rent over the years. His landlord gave notice and is selling up, he's now living in his sisters spare room. €200k and nothing to.show for it. I think thats why Irish people are not fans of renting long term as adults.

KaneToad

https://www.boards.ie/discussion/comment/119272486#Comment_119272486

It wasn't always this way. Renting was the cheaper option but it was still seen (by many) as inferior to owning.

The standard of rental accommodation in this country, for many years, was poor. There were no minimum standards and the security of tenure was weak. This led to rentals being seen as the poor relation to ownership.

Other countries have better regulated rental markets and, consequentially, there is a totally different culture around renting.

Drunken Oaf

https://www.boards.ie/discussion/comment/119286472#Comment_119286472

I have never. not once, heard anyone who lauds the German and Austrian models explain what happens when lifelong renters retire there and their weekly income drops by 50- 80%, at a stage when most Irish people have paid off the mortgage.

Geuze

https://www.boards.ie/discussion/comment/119286779#Comment_119286779

Half of Germans own their own homes by retirement.

Clearly, it isn't a disaster, other wise we would hear about it.

First of all, income would not drop that much.

The State pension is 50% of average earnings, and many people would have other pensions.

However, I just checked, and the at-risk-of-poverty rate for over 65s is a bit higher in DE than here.

PoisonIvyBelle

https://www.boards.ie/discussion/comment/119282794#Comment_119282794

Yeah, it's that "no blacks, no dogs, no Irish" attitude towards it from Landlords that's fcuked it for people. Especially those with a genuine need (although it's not for me to make judgment on that). On the other hand, some of that attitude comes from general snobbery but some of it has arisen from negative experiences they've had or heard about from people on HAP, so if you asked them they'd probably say they've good reason for choosing someone with a higher income over HAP assisted. I have a friend on HAP who has a family, she looks after the place and she's been there a few years with no issues, but it's not the nicest neighbourhood and she has neighbours on it too who don't seem like the most desirable tenants (by the state of the gardens, rubbish etc.). It's not at all fair, but many LLs just bunch HAP peeps all in together with the ones who don't give a ****, instead of reserving judgment on a case by case basis.

PoisonIvyBelle

...

PommieBast

https://www.boards.ie/discussion/comment/119287046#Comment_119287046

Being British looking for accommodation in Ireland I would not choose those terms but much of what you say i recognise. Think by the time HAP came in I was over the salary threshold...

Tony EH

https://www.boards.ie/discussion/comment/119274658#Comment_119274658

This is one of the most important timebombs that's waiting to off in this country and as a country we completely ignore it.

Tony EH

https://www.boards.ie/discussion/comment/119286436#Comment_119286436

It's not only dead money, it's a dead future.

You can never really know where you're going to be living in a year, two years, three...whatever, as you are at the mercy of someone else. You never know what you're going to be paying. You can't set down any roots. It's a dodgy prospect having kids, cos god only knows how far from their school you might end up being.

Our private renting sector is an absolute joke and this is what loads of people are trapped into, probably for the rest of their lives if something isn't done about it. It's a bloody tragedy.

maestroamado

https://www.boards.ie/discussion/2058252528/culture-around-renting

I actually the culture around renting long term is a positive thing, there is a bit of snobbery about my hone that i own etc but in a way if we encourage this going forward and FORCE the Government to make this an option for at least 50% of the population it will mean half of the people be debt free around their mid 50s and be able to help their children going forward.

I was always a bit jealous of people who lived in local authority housing with low rent living from week to week and the rest of us trying to get-on as it were, if you only had a modest job or were unemployed you be ok. I am also a bit jealous of hippies wh seem to have it sussed.

Boggles

https://www.boards.ie/discussion/comment/119287378#Comment_119287378

it will mean half of the people be debt free around their mid 50s and be able to help their children going forward

But they would still have to pay rent which in all likelihood would be far greater than the mortgage they took out 2 decades previous.

They would also have no asset to pass onto their children.

I don't see how any that helps their children going forward.

maestroamado

https://www.boards.ie/discussion/comment/119288000#Comment_119288000

Thats the choice people make, not for me to say how people choose to live.

Nidge20131

https://www.boards.ie/discussion/comment/119288676#Comment_119288676

Virtually no one is choosing to rent, the council stopped its social housing that the majority of lower income people used to live in and replaced it with HAP and anyone who is single needs near 6 figures to buy a home. Its not a choice the reality is if you are single and on an average income renting is the only way to not live with your parents for life

Boggles

https://www.boards.ie/discussion/comment/119288676#Comment_119288676

Indeed and they should be free to make that choice without being labelled snobs.

asdfg87

https://www.boards.ie/discussion/comment/119288747#Comment_119288747

That's choice for me as if people reared in council housing the expectation is not the same as when parents were always renting from local authority. I used be a bit biased against it but i see now it was needed and should not have being allowed stop to be replaced bu greedy fcukers.

asdfg87

https://www.boards.ie/discussion/comment/119290269#Comment_119290269

I am talking about how things were before the Government and local Authorities stopped building houses. There are generations of people who always lived in Local Authority housing.

maccored

https://www.boards.ie/discussion/comment/119272526#Comment_119272526

i sold my house and rented instead. i had less money owning a house so I cant understand how that would make a person 'feel of a lower social standing because of it'

zom

"Its nothing to do with disposable income, its the status attached to owning a home in Irish society"

It is not just "Irish" society - it is the same in British society, Dutch society, German society, American society, Spanish, French, Polish, Russian, etc...

AdamTrask

I live in Germany which has been mentioned many times in this thread.

Somebody mentioned what do Germans do when they retire? Typically in the past they continued to rent a property from their pension. In the past it was more than sufficient but nowadays people are building up other funds.

It is difficult to make a direct comparison between Germany and Ireland but the cost of owning a property here is prohibitive and much more expensive than in Ireland. There is a good book about this and it's well known in Germany called "Buy or Rent" by Gerd Kommer (Kaufen oder Mieten). It is a guide to calculating whether it is worthwhile renting or buying your flat and the conclusion he reaches and has the data to back it up is that people who rented their properties in Germany between 1960-2010 were financially better off by the time they retired when you adjust for inflation. He recommends investing in other options as German property growth has been sluggish historically. I read it and it completely changed my mind about the whole rent being dead money thing.

It is heavy specific to Germany/Austria/Switzerland and the Nordic countries but Ireland is mentioned many times as a property market that went very bad very fast. He argues between 2010 and 2021 people in major cities in Germany were doing financially well when they bought their property that it is likely to change due to a bubble in those areas. (In fact this is already the case in Munich anecdotally).

Long story short property in Germany/Austria/Switzerland has not been a great investment historically. Also somebody posted lots of links earlier about housing shortages in Germany etc. It's simply not true. There is huge amount of supply, land is in large supply and the population is barely growing.

My current flat costs 1600€ to rent and is 80 square metres with a garden about 45 - 50 square metre. When I moved in the price would have been about 10000 per square metre.

Thats 800.000€ for the flat. Then you need to pay 80.000€ fees which includes ground tax, notaries and agents. This is mandatory here and is approx 10% of the purchase price. I would have the 80k but would need to borrow the 800.000. At 3% interest and pay at least 2% on the principal per month. Additionally you have to pay "Housemoney" which is a fee to the building for the maintence and upkeep of the place and you have to put aside 1.5% - 2% of the price of the property per year for the future maintence costs. So lets work it out.

800.000 * 5% = 40.000. 40000/12 = 3.333€ interest and repeayment(Yes I know the interest payments will get smaller as time goes on but just approx).

800.000 * 1.5% = 12.000€ to save for the future(seems like an insane amount but historically based on the German data this is what the upkeep of a flat to its market value costs). Sometimes this goes as high as 2%. 1000€ per month.

Then the housegeld can be 200€-400€ per month.

The monthly repayment would then be in an optimistic case at the beginning around 3333+1000+200 = 4533€ .

The rent is 1600€.

So buy and pay 4533€ per month. Or rent and pay 1600€. Keep in mind this is a 3 room flat in the centre. It's a no brainer to rent it. What I do is invest the difference is stocks and etfs. Those are not doing great at the moment but should recover.

Even if I only put aside 1% of the market value of the apartment for a year thats 700€.

The transaction costs, maintenance and upkeep and interest are all dead money. If I sell the flat again I incur huge transaction costs.

Another thing that people in Ireland don't seem to account for is the dead capital when they are living in a flat that is too big. Lots of old Irish parents living in 3/4 bedroom houses alone. They have equity in the empty bedrooms there that they cannot easily access. Another waste of money. People here tend to downsize when they are older and pay less rent to continue living.

I Blame Sheeple

The only stigma around renting is if you're unfortunate enough to be stuck in a place with an exorbitant rate of rent and are then trapped there, unable to leave.

Most people in my experience, when they hear a young professional has to share a home with 2 other strangers and work 6 days a week for it, only show pity or sympathy.

Like half the world's problems nowadays, this is all in your head...............

steddyeddy

https://www.boards.ie/discussion/comment/119274554#Comment_119274554

They are investing in their asset! They will keep the asset long after they decide to stop renting. Often they will have the cost of their asset (mortgage) entirely paid off by renters. Further to this you will even find landlords complain that the rent paid by tenants barely covers their asset acquisition (mortgage) and that they only consider it rental profit when it pays far in excess of the mortgage. Mortgage is the cost of getting a property, not renting.

Dav010

https://www.boards.ie/discussion/comment/119298325#Comment_119298325

I agree with some of this, using rent to pay off the capital borrowed to invest is the main benefit of property investment, and certainly why most investors get into rental properties. But you are assuming firstly that the renter pays their rent to contribute to mortgage payments, and that the owner holds onto the property long enough that the mortgage is paid off, or that the selling price is more than what they have paid in investment and taxation. Neither is assured, if it were, there would not have been so many investment properties in negative equity, repossessed or sold at a loss.

Given the highs of current rents, does it not seem odd to you that so many LLs are selling? You could say that some are selling because property prices may not be as high again for years, but this very ability to sell when the market price is high is what scares some investors. It has become far more difficult to gain vacant possession and if the proposed legislation is introduced by SF, impossible unless the tenant consents to it. Hence even though investor benefits should be at a near record high, with no short term prospect of that decreasing, investors are fleeing the market.

That is not good for renters, no matter your opinion of LLs.

Flinty997

https://www.boards.ie/discussion/comment/119298325#Comment_119298325

Unless the renters paid for the deposit and wages of the landlord to get the mortgage in the first place the property can't be entirely paid by tenants.

asdfg87

https://www.boards.ie/discussion/comment/119293395#Comment_119293395

Thanks good post with lots of info. It seems this is the way our leaders are thinking and average people will not be owning their own homes going forward. Instead we will have a compulsory pension scheme and we will be saving all our lives after we pay off our loans after finishing University.

We can then rent from international Vulture funds and our TDs who own alot of properties around the country. SF who are the supposed leaders in social justice have quite alot of properties according to something i read, i think it was a comment made by Leo. to be fair Leo is sharing the house with some poor auld devil fron Ukraine.

I do not like it but it seems the way forward.