Why is the cost of property, esp renting, so high in Dublin?

Donald Trump · 17-01-2020 7:18pm

kceire wrote: »

But in the real world, the Pro Landlord (as you call them), REITS, finds etc are all charging significantly more than the small individual landlord.

If tenants are willing to pay more than market value, then there is that old expression about a fool and his money.

Ush1 wrote: »

I hope he's not suggesting that because REITs can absorb costs that he's expecting them to not maximise profit by charging as much as they can.

That would be a retarded suggestion. Why on earth would it cross you mind?

The REIT getting a decent return on their investment might have another 100m sitting in their bank account which they can use to finance the development of more units. Bringing the market into equilibrium at a lower point.

Is Jimmy-1-tenant going to improve the supply of houses? He will in his bollix. Once he gets off the checkout till in the local Tesco and heads home, he can post a question onto boards.ie asking what he needs to do to fix a light socket in his pension

The Student wrote: »

Now I see your true colours with your edited post. So now landlords be they national or international are not capitalists they are exploiters. This speaks volumes about your view. You are comparing landlords of the post where tenants had no rights whatsoever with tenants now who have significant rights even more so than landlords.

I will now bow out of responding to any of your future posts on this topic as you appear unwilling to accept that being a landlord is a business and the aim of which is to earn max profits. It would appear that you want professional landlords but don't want to pay for the service they give.

You have also failed to answer questions that I an other posters have posed either because you either don't/can't answer.

Hi dude,

English absentee landlords got their lands in land grants from the crown after it was seized by force. They weren't capitalists. They didn't put any capital in - they just got their names on the deeds and wanted to live off Paddy's back. I thought that the removal of history from the Junior Cert was only proposed. Maybe they actually implemented that change.
But on a serious note, for your own good, educate yourself on basic matters related to economics and property and finance. That's my advice to you. And if you think you can make a decent return by having one house, why are you stopping at one?

Jesus the level of amateurism on this thread is staggering. From self proclaimed "businessmen". lol. It's kinda sad to witness it

Dav010 · 17-01-2020 7:28pm

Donald Trump wrote: »

They mobilize capital and do the deals. They can create the developments. Currently you might have a smaller Johnny Ronan in that role. He's not out laying blocks. His main value-add is just getting the money together. The REITs can perform the same role.

Mobilising capital to do the deals = applying for a mortgage/having cash in place, and completing the purchase. Pretty much sounds like what all LLs do, amateur and professional, except those lucky enough to inherit.

Create developments = build or renovate, again, amateurs often do that as well. Large scale “professional” investors rarely build, I’m not aware of any REIT which has its own builders, but I could be wrong. They tend to buy completed blocks, or buy subject to completion by a developer, amateurs do that as well.

I’m struggling to see the distinction between what you term professionals and amateurs, apart from scale, which means little if both abide by the RTA. Perhaps the only difference is that larger investors will be more likely to buy new developments which they can rent at the highest price, and will be more professional in increasing rent at every opportunity to maximise profits, smaller unit owners may be more inclined to connect with good tenants and hold the rent.

I thought Johnny Ronan was primarily a developer who builds to sell, is he a landlord?

Donald Trump · 17-01-2020 7:38pm

Dav010 wrote: »

Mobilising capital to do the deals = applying for a mortgage/having cash in place, and completing the purchase. Pretty much sounds like what all LLs do, amateur and professional, except those lucky enough to inherit.

Create developments = build or renovate, again, amateurs often do that as well. Large scale “professional” investors rarely build, I’m not aware of any REIT which has its own builders, but I could be wrong. They tend to buy completed blocks, or buy subject to completion by a developer, amateurs do that as well.

I thought Johnny Ronan was primarily a developer who builds to sell, is he a landlord?

FFS. Secured loans are not the only way to mobilize capital.

Sure go on down there to you bank then and mobilize 30 million to get a builder to build a development for you to rent out. There are plenty of builders out there with sites they haven't developed due to financial constraints or uncertain market. They will build them for you with money upfront.

Johnny Ronan? I don't give a shite if he's a landlord or not. People like him make money because they get the financial backing together. That is their main role. If you don't have someone like him, a project might not get developed. However a REIT can replace or compete with him - removing him from the chain. One less person to pay

Dav010 · 17-01-2020 7:43pm

Donald Trump wrote: »

FFS. Secured loans are not the only way to mobilize capital.

Sure go on down there to you bank then and mobilize 30 million to get a builder to build a development for you to rent out. There are plenty of builders out there with sites they haven't developed due to financial constraints or uncertain market. They will build them for you with money upfront.

Johnny Ronan? I don't give a shite if he's a landlord or not. People like him make money because they get the financial backing together. That is their main role. If you don't have someone like him, a project might not get developed. However a REIT can replace or compete with him - removing him from the chain. One less person to pay

This is complete nonsense. What you are saying is that one person is more professional than another due to scale. One has access to 30 million, another has access to 300k, the former is more professional than the latter based on scale. Or even better, one requires 30m to buy a property, the other does not need finance at all due to cash reserves, the former has a huge debt, the latter has none, but you think the former is more professional. It’s silly.

People “like him” nearly bankrupted the country, very professional indeed.

Donald Trump · 17-01-2020 7:49pm

Dav010 wrote: »

This is complete nonsense. What you are saying is that one person is more professional than another due to scale. One has access to 30 million, another has access to 300k, the former is more professional than the latter based on scale.

I think maybe you are feeling insulted by not having the term "professional" applied to you? Is that the issue?

Would you prefer to use a different term maybe? "part time landlord"? "small scale landlord"? "hobby landlord"?

Dav010 · 17-01-2020 7:52pm

Donald Trump wrote: »

I think maybe you are feeling insulted by not having the term "professional" applied to you? Is that the issue?

Would you prefer to use a different term maybe? "part time landlord"? "small scale landlord"? "hobby landlord"?

I’m comfortable with any. I’ve been buying, developing, selling and renting for nearly 30 years, commercial and residential.

You are clueless.

Ush1 · 17-01-2020 7:55pm

Posts aren't even making sense at this stage. Like the real Donald.

Something something Johnny Ronan something mobilising capital something something development professional amateur....etc...

Donald Trump · 17-01-2020 7:58pm

Dav010 wrote: »

This is complete nonsense. What you are saying is that one person is more professional than another due to scale. One has access to 30 million, another has access to 300k, the former is more professional than the latter based on scale. Or even better, one requires 30m to buy a property, the other does not need finance at all due to cash reserves, the former has a huge debt, the latter has none, but you think the former is more professional. It’s silly.

People “like him” nearly bankrupted the country, very professional indeed.

I think you misinterpreted my post there dude. I said there are more ways to mobilize capital than secured bank loans.

I jokingly suggested to you to go down to look for 30m off your bank to finance a development to see if you would get the point that not only would that be unlikely, it would be an extremely stupid thing to be allowed to do. I think it went over your head.

Do I think that having solely the likes of Ronan is a good idea? Of course not. But unless you have the likes of these large funds to compete with him, then that is all you will have. You rocking up on your own with 300k isn't worth a shite to the likes of these projects. It's no good to them. The thing for you to do is get together with 99 of your buddies on here. All throw your 300k into the pot. Hire yourselves a proper manager etc. and all have a share in the company. Now go out and use the 30m to do something. And actually run it as a business.

Donald Trump · 17-01-2020 7:59pm

Dav010 wrote: »

I’m comfortable with any. I’ve been buying, developing, selling and renting for nearly 30 years, commercial and residential.

You are clueless.

Good for you. Do you have a side job?

Dav010 · 17-01-2020 8:01pm

Donald Trump wrote: »

Good for you. Do you have a side job?

Dear God, please don’t say that I am an “amateur” if I do, as if it makes any difference to how I operate my properties, it really would be the icing on this particular mud cake. Dude.

Donald Trump · 17-01-2020 8:05pm

Dav010 wrote: »

Dear God, please don’t say that I am an “amateur” if I do, as if it makes any difference to how I operate my properties, it really would be the icing on this particular mud cake. Dude.

Dude, I have no idea what you are. You might well be the type I was suggesting earlier - the local supermarket analogy. You might be a professional landlord who is making their living from it. Or you could be a speculator, or a small scale developer. Those are all different roles.

Do you consider yourself a little more knowledgeable than an accidental landlord who was moving house in 2006 and believed in the hype at the time and decided to hold onto their old house as a "safe as houses" investment too?

Dav010 · 17-01-2020 8:12pm

Donald Trump wrote: »

Dude, I have no idea what you are. You might well be the type I was suggesting earlier - the local supermarket analogy. You might be a professional landlord who is making their living from it. Or you could be a speculator, or a small scale developer. Those are all different roles.

Do you consider yourself a little more knowledgeable than an accidental landlord who was moving house in 2006 and believed in the hype at the time and decided to hold onto their old house as a "safe as houses" investment too?

Completely irrelevant. The RTA sets out the obligations for all Landlords, large or small scale, financed or cash buyers.

17-01-2020 10:55pm

Donald Trump wrote: »

You'll need to be a little clearer. Who are you talking about? The professional person? They aren't necessarily trying to get the capital paid for free. .

I’m only skimming your posts as they are absolute nonsense but one point you keep making is how “amateur” landlords (a totally idiotic term) want their capital paid for free where as you think they should be happy to top it up from their day job.

Then you expect a “professional” LL to only work on his rental business and not expect his capital paid. How in the name of god do you think a “professional” LL can operate a business where he is not bringing in enough revenue to cover his loans never mind make a profit to pay himself a wage.

A 6 month old child a has a better understanding of economics than you are demonstrating. And your constant use of the irritating word “dude”......

Donald Trump · 17-01-2020 11:08pm

Lilith Steep Broom wrote: »

I’m only skimming your posts as they are absolute nonsense but one point you keep making is how “amateur” landlords (a totally idiotic term) want their capital paid for free where as you think they should be happy to top it up from their day job.

Then you expect a “professional” LL to only work on his rental business and not expect his capital paid. How in the name of god do you think a “professional” LL can operate a business where he is not bringing in enough revenue to cover his loans never mind make a profit to pay himself a wage.

A 6 month old child a has a better understanding of economics than you are demonstrating. And your constant use of the irritating word “dude”......

Hey dude,

This is kind of basic. I can't really explain it much more simpler.
Assume zero inflation because I frankly don't want to make it even slightly more difficult for you to understand.

Lets suppose that you buy you rental house for 300k and you just put all the income after expenses and tax into paying down the mortgage and interest. Fast forward 30 years, there is 100k outstanding on the loan. But you have a house worth 300k which you will sell.
Have you made a loss?

From your post above it appears that you would think that you have. Suppose you have 1 Euro outstanding on the loan, and you sell the property at the end. Do you still think it is a loss? Can you really not understand that you don't have to have the entire capital amount paid down by the tenant for you in order for you to make anything?

I'm honestly flabbergasted at some of the ignorance on here. Honestly I am.

Donald Trump · 17-01-2020 11:14pm

Dav010 wrote: »

Completely irrelevant. The RTA sets out the obligations for all Landlords, large or small scale, financed or cash buyers.

Your post is irrelevant. (BTW, I assume you mean RTB, being such a consummate professional yourself).

RTB is purely to enforce and protect tenants rights. It has nothing to do with how you might finance or develop housing or how you raise your capital or manage your risks along the way.

Again, I find this astounding. An analogy might be if I run a restaurant. I might have to follow standard and be subject to health and safety rules on cleanliness. That is in order to ensure that my customers are protected. That has nothing to do with how I finance the business or what I put on the menu.

17-01-2020 11:20pm

Donald Trump wrote: »

Hey dude,

This is kind of basic. I can't really explain it much more simpler.
Assume zero inflation because I frankly don't want to make it even slightly more difficult for you to understand.

Lets suppose that you buy you rental house for 300k and you just put all the income after expenses and tax into paying down the mortgage and interest. Fast forward 30 years, there is 100k outstanding on the loan. But you have a house worth 300k which you will sell.
Have you made a loss?

From your post above it appears that you would think that you have. Suppose you have 1 Euro outstanding on the loan, and you sell the property at the end. Do you still think it is a loss? Can you really not understand that you don't have to have the entire capital amount paid down by the tenant for you in order for you to make anything?

I'm honestly flabbergasted at some of the ignorance on here. Honestly I am.

Why would you plan on running a business that wasn’t cash flow positive? The aim should be to cover the mortgage and make a profit. Yes it might need top up due to circumstances but it shouldn’t always this way. When getting into it you should be doing so to make extra income and pay the mortgage not cost yourself money topping up the mortgage.

Back to my main point how is a professional LL supposed to run a business that’s losing money constantly and can’t even service it’s loans?

Graham · 17-01-2020 11:24pm

Dav010 wrote: »

Completely irrelevant. The RTA sets out the obligations for all Landlords, large or small scale, financed or cash buyers.

Donald Trump wrote: »

Your post is irrelevant. (BTW, I assume you mean RTB, being such a consummate professional yourself).

RTB is purely to enforce and protect tenants rights.

I assume the A refers to Act, as in Residential Tenancies Act

Heebie · 17-01-2020 11:27pm

Capitalists call it "the law of supply and demand"
I call it "greed"

DubCount · 17-01-2020 11:33pm

Heebie wrote: »

Capitalists call it "the law of supply and demand"
I call it "greed"

No doubt you'll turn down the next pay rise you're offered

Donald Trump · 17-01-2020 11:34pm

Lilith Steep Broom wrote: »

Why would you plan on running a business that wasn’t cash flow positive? The aim should be to cover the mortgage and make a profit. Yes it might need up due to circumstances it’s not only this way but when getting into it you should be doing so to make extra income and pay the mortgage not cost yourself money topping up the mortgage.

Back to my main point how is a professional LL supposed to run a business that’s losing money constantly and can’t even service it’s loans?

Why can it not be cash flow positive? In order for it to be cash flow positive, you only need to be able to cover expenses.

Interest expense on a 10 year loan is 3% fixed.

Average rent in Dublin is about 2k a month. Average house price is about 375k. That's a yield of 6.4%. Lets knock off 10% of the rent on expenses and maintenance. That gets you to about 5.7%. Take off the interest costs and you are getting to 2.7%. That's a positive number.

Now at the end of the 10 years you can sell the house and pay off the loan. Then you can also consider that Real Estate is a great hedge for inflation.
Even though prices can go down as well as up, the chances of the house being lower in value nominally than it was 10 years ago are very low (barring you buy at a bubble....and lets be honest, there were plenty of people warning about the bubble....even Bertie Ahern was moaning about them and saying they should commit suicide). And that is ignoring that even though your interest remains fixed, your rents go up over time. At a 4% annual increase, after 10 years you are talking about 48% more that at day 0.

So that is cash flow positive for you. If you managed enough houses, you'd make a decent salary out of it

Donald Trump · 17-01-2020 11:35pm

Graham wrote: »

I assume the A refers to Act, as in Residential Tenancies Act

Possibly. but my point still stands. It has nothing to do with how you might finance an investment. It only covers how you deliver the product to the consumer.

riclad · 17-01-2020 11:46pm

Say you buy a house ,and get a loan for 200k,
pay the loan after 25 years ,
the loan will cost you 400k approx if you take into account interest payments.
The average landlord pays 40 per cent on rental income .
you will have to carry out repairs on the house .
eg boilers need to be serviced or replaced .
Its hard to work out what a house will be worth in 20 years .you may not make much of a profit for the first 10 years .
right now house,s in dublin are not going up in value in most area,s ,
due to concerns about brexit and other factors .

riclad · 18-01-2020 12:00am

House,s are very cheap in cavan, and donegal,
but would you want to live there, could you get a job there ?in citys there is a shortage of rental units, If a builder buys a site ,it makes more sense to build apartments on it than a 3bed house with a large garden.
house prices vary from county to county.

Dav010 · 18-01-2020 12:59am

Donald Trump wrote: »

Possibly. but my point still stands. It has nothing to do with how you might finance an investment. It only covers how you deliver the product to the consumer.

Consumer law and tenancy law are two very different laws, tenancies are covered by the RTA, consumer laws by the Sale of Goods and Services Act. Consumer law does not apply to tenancies.

fash · 18-01-2020 7:25am

Heebie wrote: »

Capitalists call it "the law of supply and demand"
I call it "greed"

You should cut back, work harder, save up and but a place- and then rent it out cheaply - that will show them.

Wanderer78 · 18-01-2020 7:32am

Shelga wrote:

Would be good to strip all this back to basics and understand how it has come to this. The cost to buy is also quite high, but rent is the real killer, IMO. Would be great to hear from people who know about such things and hear their takes on it.

Its a complicated one, but we ve endured failed and failing housing/accommodation policies for a long time now, to the point, it's failing many landlords and tenants now, and nobody really seems to know what to do next. It's almost impossible to know where to start with it

handlemaster · 18-01-2020 8:34am

Donald Trump wrote: »

Who said it's a great gig? There are plenty on crying that it should be a great gig i.e. that they should be allowed to gazump on a house or apartment and then have the rival bidder rent it from them and pay for their mortgage.

Why not just have what is effectively the equivalent rule? That if you see a house that you think will be nice for your pension in 30 years, that you can let Jimmy buy it and pay the mortgage and then in 30 years you are allowed to take it from him and sell it. It's the same attitude. In both scenarios it is the Bank's money you are buying it with. In both scenarios Jimmy will pay the mortgage. And in both scenarios you can sell it in 30 years and keep the money.

Said like the real Donald, lots of holes in that statement

handlemaster · 18-01-2020 8:36am

Heebie wrote: »

Capitalists call it "the law of supply and demand"
I call it "greed"

Why do you call it greed ?

Ray Palmer · 18-01-2020 11:00am

handlemaster wrote: »

Why do you call it greed ?

Because he doesn't understand what supply and demand is.

Dav010 · 18-01-2020 11:06am

Ray Palmer wrote: »

Because he doesn't understand what supply and demand is.

Maybe he/she is a Michael Douglas fan. Greed is good.The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. ... Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.

Why is the cost of property, esp renting, so high in Dublin?

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