Accidental Landlord Question -

You can change it around what ever way you want but people will see the mortgage payments as a cost. There is absolutely no reason to break it down the way you want to look at. The minor tax break is the only reason a landlord will look at it.

You aren't a landlord and you don't get to decide how they should look at their finance in your particular pedantic way. At the start it costs you and as time goes on rent will exceed mortgage payments until there are none and you own the house. Simple plan and similar to how many businesses operate. The government messed around with policies and landlords left the market and the amount of rentals reduced.

But debt repayment isnt a cost. It is repayment of debt. Balance sheet item, nothing to do with profit and loss

Why are you demanding a 5% rate of return - equal to your hypothetical Bank. What are you putting into the deal, or risking, that has you equal with the lender?

The Bank is the one taking most of the risk and yet I can fix a 30 year mortgage now for less than 4%. I mean, let's put this into perspective. You are putting up say 100k and the bank 400k for a house. You are requiring a return of 25k per year on your 100k with your quoted 5% (of the total value). So in actuality that is 25% you are asking for. You are also most likely actually beating that net after even high expenses and before tax (which is personal to you and the same as any income) on your 500k house!

Now let's look at the leverage effect on capital appreciation. property is a good hedge for inflation over any reasonable length of time. It tends to beat inflation where there is a rising population as older areas are always more desirable when newer areas are built. But you get the enitre benefit of that inflation. The bank does not get a slice. So, again, a 5% rise in property prices YoY puts another 25k onto your wealth for your 100k. You can claim it works the same for downside i.e. the leverage effect, but not really because (1) there is an asymmetry/skew in the distribution of price changes (see point about inflation), and (2) the old adage of not being able to get blood from a stone will limit your downside (as caused the last economic crash in the country when losses were absorbed by banks and the State)

So what we have here is a system where the Bank puts up most of the money, takes the majority of the risk, has no scope from upside from volatility and only needs 4%. Whereas you are getting 50% return on what you put in for very little risk using conservative figures above. And still moaning that you aren't getting enough. Diddums.

You are picking a very specific point in time there with your 2008, and deliberately so. It is something that I would almost use "dishonest" to describe. You need to take into account your 17 years rent in the intervening years too and your historically low, and prolonged at that, interest rates

Please refer to Ray's above post as to the realities of the situation. To paraphrase it was along the lines of "well at first you put a little bit in, then someone else covers the mortgage and everything else fully via their rent, then you make ongoing additional income on top, and then you get a tax free lump sum at the end plus most of a large chunk of capital appreciation". That's not the way the system should be, but it is the way that it has been geared towards allowing certain sections to live off the backs of others.

I won't say it's greed for tenants as there paying a fair price. Again OP is increasing price based on what he can get not what he needs.

The other people are being ripped off, by greedy LL but what choice do they have? Not everyone remote works or can leave the country.

@jo187

My point about rent credit, HAP etc was for going forward Surely applying for these is a better option than pulling the plug and returning home ?

However, maybe the tenant knows they earn too much and their only hope was laying it on heavy with the generous landlord? That is speculation on my behalf but not beyond the realms of possibility either.

Amway, we now know the property is in a RPZ so the rent cannot go to €1400 unless the rules change. The property will be registered and the LL will regularise their tax and make very little profit off a low rent. This may result in them selling up and taking a profit on the appreciation.

By the way, the rent went to €675 because the mortgage increased to €600. Quote

we upped the rent to €675 when our mortgage went up - at one stage the mortgage got to €600 per month and the rent was €675

All they wanted was the rent to cover the mortgage but sadly made no provision for tax. Yet it suits some posters here to label the LL as greedy.

That's all very nice but nobody has to listen to how you think it should work. People investing in property can look at it the way I suggest instead and have and continue to do so. It doesn't matter what is actual "costs" outgoings are going to be seen as a expenditure to be covered at some point. Doesn't matter whether you approve or not, gearing an asset is popular.

Your field analogy is nonsense and you are intentionally suggesting landlords do nothing with property by using a field. Landlords have to maintain the property and have it suitable for renting along with dealing with tenants. That is time and money the landlord must do and not a passive investment as you are suggesting. You know that but want to dismiss/hide it.

You completely ignored what the government did which would have knocked your view of calculations where people did end up in debt and subsidising tenants. It is those actions and behaviour that made people sell up and not invest causing the lack of rentals. They were warned beforehand and they still did it and it happened. Now they are going to change the rules.

I invested money into my rentals when it made sense the RPZ made it so it so it didn't make sense. Meaning rental stock standards at best stayed the same but in reality made them worse.

Your post encapsulates the main issue with the small time amateur landlord sector. People should not get into something they don't understand, and worse, might not have the ability to understand even after years doing it. Unless fortune favours them, there can only be heartache.

Prospective accidental landlords should take note.

On the Revenue side of things :

Sit down with an Accountant. He will ask for your rental income and expenses. Mortgage Interest may blow a hole in the profit which is what you want. Splitting the figures between yourself and the Mrs may help.

There might be surcharges.

Once they calculate the tax owing they will tell you the overall liability.

The most important thing here is that when the accountant uploads these returns they are also paid in the same motion. Old liabilities unpaid are more than likely going to attract Revenues attention.

As for the RTB, go get some advice off a management company. I rent out a house as well and they do all this for me.

Yes there will be a fee, but it's money well spent.

And good luck.

There is no "correct" way to look at it, people are free to look at it anyway they want. That is your problem and and you are advising people on what you think is "correct". You are wrong because there is only how you think it should be done. If people followed your "theory" they would have lost more money and be tied to an unsustainable model while people were losing their jobs and in negative equity. I will look at it my way and own an additional property which will be part of my pension plan. You are free to invest in your pension how you see fit but you better make sure they aren't investing in any rental properties or you are just the same as a landlord.

Regulations do change but they don't need to be populist ill thought out ideas that put extra burden on the service provider while they are already in trouble, this is what the government did. Then when rents were rising they blocked that with RPZ. Making LLs subsidise tenants from the market rates. You talk of double dipping and that is what the government did. It is also important to note all you are saying is LLs should maximise their rent as much as possible for fear of changes. You shouldn't have any complaints about that because you are saying they must account for such things.

Only if tenants are unilaterally allowed to decide what to give the landlord. This is veering towards victim complex mentality.

Back when the crash happened, there was no shortage of rental properties and rents decreased. Many rented cash-in-hand under the table - justifying their fraud by some version of "ah sure it won't pay me mortgage if I have to pay tax on it". Given a cheap rent to make sure they had something coming in. But that was their choice.

Actually no the tenant won't have to pay as the OP can't increase it if they are in one of those zones they can only increase it by x amount up from the last rent and can only do that every year or 2 so the OP will with taxes could be down on money.

I'd say you must be public sector if buying a house and collecting rent, with one or maybe two calls per year to send an electrician over counts as an active investment.

Enjoy your early retirement. 5 years to go yet.

@Donald Trump

You certainly picked the correct user name. Slagging off or demeaning people that have a different view than yours only shows the type of person you are. Just like the real person of the same name.

Nobody is saying what the OP did was right and they have got themselves into a bit of a mess. With the low rent plus interest cost, I doubt it was done to defraud the State of lots of tax, unlike your VAT and excise fraud example on the cigarettes. That's absolutely a crime with those involved knowing this. Letting out property without any notion of the requirement to pay tax is very naive, but is not a crime.

Sometimes it's just nice to be nice and give people the benefit of the doubt.

No need for the victim complex. Nobody was getting slagged about anything. Being a landlord is a passive investment. It's the ultimate passive investment in fact as many hold the property for decades. I consider myself a passive investor in equities. Now, I'll spend at least a few hours a week keeping up to date on markets. But that doesn't make me not a passive investor.

Where did I attack the OP? Again it is the victim complex showing. My post was in response to you sying

the scenario you posted also benefitted the tenant,

which was a hypothetical scenario where a landlord charges a little bit less to fill their place but uses that to justify to themselves why they shouldn't have to pay tax. I used an analogy I hoped you would understand as logic goes out the window for some people when landlording is mentioned and they appear to think that different rules should apply for some reason. So in the same way that a man selling smuggled cigarettes with a counterfit stamp wouldn't expect to get credit for selling below other's prices, a landlord who doesn't declare their income for tax shouldn't expect to get credit for renting below other's prices.

And yes, failure to pay tax due is a crime. Again, lest you get your knickers in a twist, that is a general statement of fact and not directed at you or whomever else you imagine.