Irish Property Market chat II - *read mod note post #1 before posting*

4 years is too long to wait.

Rumours that the cap will be raised to 4%, but that it will be removed completely when the tenant leaves, so the LL can then revert to market rent/whatever they want to charge.

That is why a proper punitive vacancy tax is needed.

In reality the LL already raise the rent to market rate once the tenant leaves if the are not registered with the RTB which many aren't so I dont see this making a huge difference in increasing investment in the private rental sector

The cap should never have been set as anything other than the rate of inflation. When they first introduced the 4% rate it was unfair as inflation was running at 0%, when inflation was running at 10%+ landlords were unable to keep up with their own costs

Removing it completely is a bad idea as then you are left with crazy high rents that lead to the much hated rent pressure zones and you are caught in an infinite loop

The rental sector is a very complex beast and regulating it needs complex legislation. I would propose that rental rates should be a set amount decided upon by an outside body. The idea of me paying more than my nextdoor neighbour or moving over the road to get cheaper rent is foolish

The cap in its current form can't stay. A cap that isn't directly reflective of inflation is crazy one way or another, but having no cap would drive rental prices nuts and add to our homeless figures, which are already in crisis mode.

Unless we build many more houses we need a cap to protect the people from homelessness

Not removing the cap will drive our homeless figures up. Simply because no new rentals will get built.

We cant build more homes for rent without removing the cap. Thats the point.

The govt will probably need to subsidise the rent increases that come from removing the cap, at least in the short term, until supply catches up and rents naturally deflate.

Sticking with what we are doing now and leaving the cap and RPZ in place is the worst option of all, as new supply will literally dry up and homelessness will increase; New jobs and investment will start to bypass the country altogether.

So the government down valued landlords properties by introducing the possible rent via RPZ and then get to buy them at a lower price. Doesn't sound fair.

I already explained why properties go up in value not related to inflation and you want to decide how much they can make and curtail the benefits of the risk they take. Why would a landlord buy a rundown property do it up and rent in an area hoping it would improve? In your eyes if that happens the landlord should not get the rewards but the tenants should. This is precisely how many areas become gentrified and areas improve. Of course shops can up their price in the area as it is a free market. That is not a equal playing field but a sense of entitlement to profits/income made by a landlord. Are the tenants going to pay the landlord if they lose money on their investment?

100% mortgages are a bad idea. Instant negative equity if something happens

If you start thinking about homes as places where people live, rather than profit machines, you'll see it makes complete sense

We have minimum levels required when a property is rented out... The landlord that buys the rundown property and gets it ready for rental has likely spent less on it than the landlord that buys turnkey

@Red Silurian

Here is a turnkey minimum standards rental property

https://www.daft.ie/for-sale/house-562-north-circular-road-north-circular-road-co-dublin/6142240

How long before an investor would get a return ?

How much more money do you think they should spend improving the property? Should rents go up as a result?

Well if you are going to be that ridiculous you are not being serious.

It is less return than putting the money in the bank without any of the risk and effort. You are assuming the property will increase in value, aren't consider tax, insurance, repairs etc…

You are like a child with your understanding of economics. No investor is going to do such a stupid investment for a year as property is a long term investment. Not many are full cash buyers so most likely a loan is involved so no real profit on their investment for many years as in decades while there is a risk and liabilities. Tenants do just stop paying rent

You want all the perks of investment for tenants and no incentives for investors. Just admit you don't care about people who invest in property and want some idealised version of a housing market where investors don't make money.

It isn't going to happen as it will mean less rentals when we need much more than we have.

If you don't think that property needs investment to bring the standard up we have very different views on what rentals should be like. If there is no reason to invest money in rental properties the standards will just keep going down as exiting lets will not be well maintained.

Absolutely no understanding. 65K is gross rent so you get less than half of that and then there is the expenses along with estate agent fees when selling it, CGT if the price went up. You would be lucky to clear 4k if prices stayed the same after all fees, tax and costs.

That is if you had the cash but with a mortgage you would lose money. So when I asked you how long before the investor gets a return the answer is certainly not a year

Important to note you would pay DIRT on the interest of your bank. You're also assuming you will need to put work into it to the tune of €28.5k which is laughable

Taking out a mortgage on something worth €800k, assuming you have the 30% deposit required for buy-to-let, according to the AIB mortgage calculator you're looking at a monthly repayment of about €3k/month for 25 years.

If you don't adjust rent prices and pay 50% of the rent in Income tax you're looking at a net of €2,700. So you're effectively paying €300 a month for a house on Dublin's North Circular Road. After year 1 you've effectively paid €3,600. Apartment price inflation in Dublin is running at 3.9% so you're looking at selling for 831,200 after 12 months

That's a €27,600 profit in 12 months, again assuming you don't raise the price the tennants pay for doing very little, if any, work

And 2% more in rent allowed every year under current rules, 65k becomes 66.3k, becomes 67.6k without lifting a finger

Why would people not want to live there ,is it a very rough area .

Imo on face value it looks ok value wise unless there is hiden reason for sale , I can not imagine it will sit for too long at 800k .Would you expect more then 8% yield for the likes of this?