Housing Madness

Can easily be fixed with transparency. Landlords business how long they took a loan out for. End of the day an asset for them and renters is just a place to stay and live in. Shouldn’t be on the renters to pay the landlord's bank loan back quicker. That’s a major flaw in this rent and landlord debate. The landlord has a set fee and interest to pay back every month, renter should only pay a certain amount of it each month to the landlord. You could come to some agreement written into law no way around it.. Renter agrees to pay 60 70, 80 percent of his month repayment. The reality a landlord should not be buying a house or renting it, can’t pay off least 10 to 20 percent of a loan of it each month. Fairer solution for everyone in society.

Downturns rarely last long. Reason have little sympathy for that is you got the loan off the bank based on your income. You renting to have a substitute not paying the loan back yourself.

Say the loan is 500 Euros + interest a month over 30 years. About 180,000 Euros.

You asking for 800 or 1000 a month than on advertisements for the same house.. There is something wrong when a renter pays almost double. 

You obviously don't understand how much landlords have to pay out. For most small landlords the rent they receive doesn't even cover all they have to pay out - they have to use personal funds to cover all the costs. They have to pay mortgage, repairs and refurbishments, compliance fees, management fees and tax ( that thing everyone forgets about). Also remember it is only the interest portion of the loan repayment that is tax deductible which is usually a small portion of the repayment. The capital portion is not tax deductible.

You are taking a very simplistic view.

When you say the renter pays almost double. Thats before tax and fees (Insurance, maintenance etc) are deducted.

Can you name other businesses that have such control? It is actually none of your business what profit a landlord makes or to determine how much profit they are allowed. If the landlord has no mortgage then the should only charge the tenant the cost of expenses and a minor profit?

I hope you are 12 or below because only a child could actually think that is reasonable or practical in any way.

So the landlord has to do a major repair and has no money to fix it they just take out a loan and put up the rent until it is paid off and reduce it afterwards? Do you think shops that own their premises should charge less for food?

Very few houses will have rent covering the landlords cost of mortgage.

Why? because Landlord has to pay ~50% of that rent in tax straight off the bat. Then you pay insurance, pay for maintenance, property taxes, management fees. It's far from rolling in money, if it was that good then far more small landlords would be entering the market rather than leaving. Currently this country is hemorrhaging small landlords, only institutionals are growing in number.

A shop could close and sell off it's asset at anytime too but then you have no shops. You want to reduce the number of rentals and force rent up then you have the right idea.

Lots of people buy property to rent out as their pension fund not a lump some payment. Why should they not be allowed do that? Lots of pensioners currently rely on rent as their pension because the sate wouldn't allow them a state pension even though the paid PRSI. Rental income is a good pension as it tracks with inflation. Would you rather large companies make this money instead of ordinary citizens?

Nothing to be done if the investigation gave them the all clear.

Isn’t the issue that a small-time landlord pays half the rental income back to the state in tax, yet a REIT pays no corporation tax, despite landlording being, as Ray Palmer puts it, a business, an “industry”.

So why don’t REITs pay corporation tax or CGT?

They must not be much effort put into the investigations.

Although I think you are allowed someone stay over a few nights a week, so it's probably not the easiest thing to prove.

Fairly sure this is just because BTL mortgage rates are so high at c.4%. Gross rental yields before costs are 6%+ (ignoring potential capital appreciation), before taxes and costs etc. are top notch.

The only reason a landlord wouldn't be making money hand over fist is because the person loaning them the money (the bank) is getting all of the benefit.

If you can fund the purchase of a rental out of your own money then the returns are incredibly attractive. 4-5% gross yield (6% less costs) + capital appreciation on top - not many investments can match that

if you borrowed the money off the bank, then you're nothing but a middle man/vessel by which the bank is investing (very profitably) in that rental. Why should an individual in such circumstance expect to make significant profit though? Pretty much any joe soap can do it. When you're not providing the capital and you're outsourcing the handling of it to a letting agent, then what exactly are you providing? Not a whole lot therefore profits will rightly go to the capital provider (bank) plus service provider (letting agent).

Further to your point, I have 150k sitting in cash and shares right now. I would be very happy to invest that in building a rental property if I felt it was worth the risk. It is absolutely not. I'll get better returns sticking my capital in an index tracker and have no risk of someone trashing my investment, overholding it, having to pay them to leave, having to fix ovens or lights or whatever. I think you would have to be nuts to be a landlord in this country unless doing it at scale (you know, those funds that everyone hates). At least that way you can spread your risk.

So instead of building a rental property to house a family, increasing the supply of property an iota and driving down prices for renters and buyers, the smart thing for me to do with my resources is basically anything else.

That's the reality.

All investments are taxed in such a manner. Equities for example dividends are at a marginal rate + gains at 33%. Not many investment firms are projecting gross yields above 6% including capital appreciation so the return on property even with the tax rate looks very attractive. The mortgage bit is a non issue, if you can't put up your own funds to buy it then your return isn't going to be as good because it's someone else's money at risk, simple. If you can't afford to buy a property with your own money, buy a REIT instead.

Nobody borrows a few 100 grand from the bank to throw into the S&P 500 because the rate they'd charge you would make it unattractive, same will hold for property.

The risk bit is a little less clear. As was seen in the crisis, when stuff really goes south and negative equity hits, rents plummet...the mortgage quickly stops being paid and it's ultimately the bank who takes the bath..hence the 4% mortgage rate. So again, the bank takes the risk, the bank makes the gain...the "landlord", an intermediary putting the banks money to work hopefully taking a sliver off the top and then some capital gains (of which there has been plenty of late!)

If you could afford to buy an apartment then your returns relative to risk would compare very favourably with an equity fund (even parking for a second that you can't invest in an index tracker as an irish citizen due to the insane tax implications). In fact, investment models need to adjusted at the minute because the risk-reward on property is so good that traditional optimization tools want to bundle everything into it (which generally isn't suitable due to liquidity constraints). Your point about diversification is very well made, and it's why investing in REITs makes way more sense to get property exposure in a diversified way when you're not wealthy.

What you've described is just a fact of life - you're not wealthy enough to individually get involved in the provision of housing in an efficient manner. I don't see this as a problem that a system can fix.