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2% max rental increase allowed inflation 7% plus

12346

Comments

  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


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



  • Registered Users, Registered Users 2 Posts: 70,172 ✭✭✭✭L1011


    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.



  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


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



  • Registered Users, Registered Users 2 Posts: 23,771 ✭✭✭✭ted1


    Cost of living.

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



  • Registered Users, Registered Users 2 Posts: 370 ✭✭DFB-D


    Who is matching inflation these days?

    Unless you happen to own oil reserves...



  • Registered Users, Registered Users 2 Posts: 6,003 ✭✭✭handlemaster


    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



  • Registered Users, Registered Users 2 Posts: 370 ✭✭DFB-D


    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.



  • Registered Users, Registered Users 2 Posts: 13,503 ✭✭✭✭Mad_maxx


    Stocks fall in times of inflation as bond yields rise



  • Registered Users, Registered Users 2 Posts: 6,003 ✭✭✭handlemaster


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



  • Registered Users, Registered Users 2 Posts: 5,415 ✭✭✭Padre_Pio


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

    Savings are not a factor in this.



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  • Registered Users, Registered Users 2 Posts: 20,643 ✭✭✭✭Donald Trump


    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.



  • Registered Users, Registered Users 2 Posts: 13,503 ✭✭✭✭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



  • Registered Users, Registered Users 2 Posts: 7,984 ✭✭✭Grumpypants


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



  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


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



  • Registered Users, Registered Users 2 Posts: 4,060 ✭✭✭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.



  • Registered Users Posts: 8,239 ✭✭✭Pussyhands


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



  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


    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.



  • Registered Users, Registered Users 2 Posts: 4,587 ✭✭✭FishOnABike


    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.



  • Registered Users, Registered Users 2 Posts: 7,984 ✭✭✭Grumpypants


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



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  • Registered Users Posts: 8,239 ✭✭✭Pussyhands


    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.



  • Registered Users Posts: 8,239 ✭✭✭Pussyhands




  • Registered Users, Registered Users 2 Posts: 1,279 ✭✭✭The Student


    Property is a depreciation item, you can however re value or leave as is and when you dispose of it any gain on the book value you pay tax on.



  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


    You do realize why we need rentals?

    Actually you probably dont. Who am I kidding.

    Waste of time.



  • Registered Users Posts: 8,239 ✭✭✭Pussyhands




  • Registered Users, Registered Users 2 Posts: 6,003 ✭✭✭handlemaster


    Additonal taxes. Registrations of tenancy. Loss of property rights. Tenants gaming the system. Redo your figures



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  • Registered Users, Registered Users 2 Posts: 370 ✭✭DFB-D


    Property is generally not depreciated because depreciation does not reflect the nature of the asset.

    Industrial buildings are usually the only building to be depreciated.

    Deprecation is ignored for tax as is profit on sale of the item. For tax purposes the tax written down value is compared to the sale price to determine if a balancing charge is payable.

    For obvious reasons, capital allowances are not available to most types of property.



  • Registered Users, Registered Users 2 Posts: 370 ✭✭DFB-D


    What is the additional cost of loss of property rights year on year? Or if you don't have a tenant who games the landlord, there is no cost?

    The taxes for a landlord generally remain the same, except the allowable deduction for mortgage interest increased.

    About time all this whining stopped. Property prices are high enough to sell if anyone wants out. Any landlord who moans about loss of property rights shouldn't really be a landlord, what are they expecting? The tenant to mail cheque's without occupying the property?

    Not saying being a LL is easy, but no need to be bitter about it!



  • Registered Users Posts: 8,239 ✭✭✭Pussyhands


    What additional taxes?

    Registrations of tenancy? Didn't you always need to do this, in any case, it's just a business expense. A taxis car tax can go up year on year, doesn't mean you're entitled to a pay increase.

    Loss of property rights? That's the risks of investing in property!

    Tenants gaming the system? Was always possible, you knew that before entering the game.



  • Registered Users, Registered Users 2 Posts: 6,893 ✭✭✭Allinall


    Taxis are getting a 12% price increase because of increased costs.



  • Registered Users, Registered Users 2 Posts: 1,093 ✭✭✭DubCount


    😂😂😂

    If you saw someone drowning would you tell them "you knew the risks of swimming" before you walked away?



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  • Registered Users, Registered Users 2 Posts: 1,279 ✭✭✭The Student


    if as everyone wants landlords to be seen as a business then as an asset of the business (whether it is a legal entity or not) then as an asset of the business the property (as an asset used to generate income for the business) can be depreciated.

    Capital allowances are allowed for properties used in business to generate income. Because the small landlord is not seen as a business for tax purposes then they don't depreciate the asset.

    Depreciation is a "paper cost" in the P&L so it is not ignored for tax nor is profit on sale. If the carrying cost in your accounts is less than the sale price then a balancing payment is due.



  • Registered Users Posts: 1,128 ✭✭✭Fattybojangles


    Tenants should only eat bread and water so they can afford to pay off some arseholes mortgage for them.



  • Registered Users Posts: 1,128 ✭✭✭Fattybojangles


    Perhaps they could get a real job like everyone else?



  • Registered Users, Registered Users 2 Posts: 12,556 ✭✭✭✭AckwelFoley


    Some incredibly moronic replies to this thread.


    It's no wonder property owners are leaving the rental market



  • Registered Users, Registered Users 2 Posts: 7,984 ✭✭✭Grumpypants


    Have one thsnks. Don't worry, as long as you are paying your tax. Your tax is paying my mortgage. Cheers for investing in my financial future. Keep up the hard work.



  • Registered Users, Registered Users 2 Posts: 370 ✭✭DFB-D


    Sorry but depreciation and profit on fixed assets are both added back before income tax (for CT too if a company) is calculated.

    Capital allowances are deducted to reduce your taxable income instead.

    In sale, the tax written down value is used, a business might depreciate an asset over 5 years on their books but for tax it is 8 etc. If you ever get the chance to examine what is in deferred tax, you will be likely to see a balancing between depreciation charged and capital allowances claimed.

    There are no capital allowances available on property unless it meets the criteria for the industrial property capital allowance.

    Not surprisingly, a private individual and a company cannot claim capital allowances on property, you would be claiming capital allowances against income annually but paying it back when sold.

    I've no idea where you got the term paper cost from, probably not an Irish term? Revenue do summaries on various topics, there is one on common add backs and capital allowances if I remember correctly.



  • Registered Users, Registered Users 2 Posts: 529 ✭✭✭Smouse156


    Can this thread please be closed? It’s pretty ridiculous Landlords complaining about not matching inflation for a single year following 8 years of beating inflation.



  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


    I think it is being explained in this thread how not making a profit leads to less supply, higher prices, less maintenance, And 2% will not solve that situation. I know lots pf people like to stick their fingers in their ears and sing, but as a country we need to understand why we are where we are before we can get out of the situation.



  • Registered Users, Registered Users 2 Posts: 1,093 ✭✭✭DubCount


    According to the RTB, the average price of new rentals in 2021 increased by 9%. Cheaper (below market value) rentals are leaving the market, and the limited number of new rentals (mostly coming from corporate funds) are just getting more expensive (way above 2%).

    Rent controls just do not work at controlling rent prices. Whether you believe landlords are money grabbing fat cats or just regular business people, the forces of supply and demand is what determines price in the end.



  • Registered Users, Registered Users 2 Posts: 975 ✭✭✭redarmyblues


    It is irrelevant what rental rates are when there is little or no supply "There was a 48 per cent drop in the number of new tenancies registered with the RTB in the last three months of 2021, compared with the same period in 2020, down to 9,350 new tenancies." according to....

    https://www.irishtimes.com/news/ireland/irish-news/rents-increase-by-9-across-new-tenancies-rtb-figures-show-1.4862673



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  • Registered Users, Registered Users 2 Posts: 2,195 ✭✭✭Fian


    This is the fundamental issue.

    You generally measure an investment in terms of yield - what percentage of the value i have invested is the investment generating in income for me. The value you have invested is "the money you have on the table" - in other words the amount you would get returned to you if you liquidated the investment. Not the amount you originally bet, the amount that you have on the table now. So if i put €10 on a roulette wheel and the number came up so i won €500 if it "let it ride" I would be betting €500 on the second spin, not €10.

    Property prices are increasing faster than 2% per annum. Income is increasing at less than 2% (2% capped nominal increase less increasing expenses - management fees, insurance, maintenance costs are all increasing.) This means the yield is inevitably falling. Sooner or later landlords reach a point where it makes sense to get out of the investment and reinvest elsewhere - somewhere they can get a higher yield on the money they get from selling and generate a higher income for themselves. Or at least a comparable yield with less risk. That might be in stocks/bonds or it might just be in property in another EU state where they can get a higher return relative to risk. It is easy to move money around, there are investments other than Irish property available. Or it might just be that they don't re-invest because they feel the return doesn't justify the amount of investment they have at risk/hassle and they take their money off the table.

    That is clearly happening on an ongoing basis, there is still an appetite for REITs to invest and apply market rents on new builds so they get a sufficient yield, but these new (expensive!) rentals coming into the market are not enough to even maintain current levels of availability - they are outweighed by the number of smaller investors exiting.

    Tenants don't get much benefit from rent controls when they result in no properties being available for them to rent. Scrapping rent controls would certainly not fix the rental sector, that doesn't mean that persisting with them isn't making things worse.



  • Registered Users, Registered Users 2 Posts: 1,827 ✭✭✭ballyharpat


    ???? IS this in any way constructive or based on reality?

    People that sit on a computer can be deemed as not having a real job, people that run a business from home and have hands on staff do the work can be deemed as not having a real job.


    People that invest in the stock market can be deemed as not having a real job.


    If landlords choose to do it, if they can do it efficiently with as little work hours as possible , more power to them.


    I know I could turn mine over to property management companies, increase prices by 20% and pay a management fee of 10%, so I'd be about 9% better off. But I actually enjoy giving a break to my good tenants. Currently, I was sick, so cannot travel or do things I normally would, so I surprised my tenants with a do-over in one property, painted it all completely, put down new wood floors in kitchen, sitting room and hallway.



  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


    I believe it has gone too far now and cannot see a way back at all. Who is going to invest now apart from REITs at top dollar. Wont be long now before the final holdouts of ordinary landlords are gone. Its nearly there already.

    And as you correctly pointed out the average is increasing not only because new rentals are coming on for top dollar, but also because any cheaper properties are completely leaving the market because they just arent sustainable anymore (and also there is a constant threrat of things getting worse for the owners), pushing the average up even higher.

    Some people were staying put in those rent controlled properties, but as they are being sold those people have no choice than to now rent at the top of the market. I see no fix for this situation at all. You have to get more investors coming in, but it just is not attractive - quite the opposite in fact (unless you are a REIT able to charge top dollar for new to the market property).



  • Registered Users Posts: 1,128 ✭✭✭Fattybojangles




  • Registered Users, Registered Users 2 Posts: 975 ✭✭✭redarmyblues


    In the real world there are no properties to rent where there are no institutional investors One listed to rent in Sligo ATM and that one seems to be there for months. Once upon a time you would have 30 or so as the academic year ends.



  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


    I heard on the radio today that they were talking in the dail about capping the rents on first lettings for the REITs.

    Its almost like they are trying to give the REITs a reason to not supply anymore new properties to the market too.

    Is there no thought process in the brains of our politicians. That might have worked had they not driven all of the other rental supply out first. It will have the opposite effect to what they think it will if they do it now.



  • Registered Users, Registered Users 2 Posts: 7,984 ✭✭✭Grumpypants


    "New tenancies" being the key bit.


    Many factors there. Previous tenant was there for years and under paying. So it is brought up to a fair market value.


    To up the rent you have to spend a considerable amount to renovate it, this will drive up the price.

    Houses being bought at a higher price are rented out at a higher price.





  • Well some REITs had set rents so high that apartments were empty for months on end



  • Registered Users, Registered Users 2 Posts: 1,827 ✭✭✭ballyharpat


    this is a big cost, I wanted to get a tiler, the cost was up around e700 for 2 days labour, tiles were another 400. 2-3 years ago, this would have been 250 materials, 400 labour. so expenses are up 50% in that situation.

    For someone like me, I can do it myself, so I will, to keep costs down, but for a regular landlord, That could be half the profit for a year on a property, they cannot raise the rent much after doing work, so there is zero incentive to improve the property. It then gets to the point that its dilapidated, so the tenants start complaining, then you have the authorities called, then the landlord sells. This is one of the effects of inflation, but rent not being increased in line with inflation.



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  • Registered Users, Registered Users 2 Posts: 13,503 ✭✭✭✭Mad_maxx


    The public have been conditioned into an anti landlord mindset by a singular public discourse around the issue of housing, Marxists like Rory Hearne dominate the debate and do a huge amount of harm, Hearne is motivated by socialist ideology and would sound the same even houses in rathmines were 800 per month



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