Do landlords in Ireland have it as tough as they think?

Beta Ray Bill · 10-10-2018 12:40pm

Brian? wrote: »

Fair? That’s subjective. I don’t really know one way or other.

It's actually not subjective at all.
Person A gets "something" for X and Person B gets the same or very similar "something" for Y, where Y is far greater than X.

Therefore person B has had to work far harder than A to have the same thing.

You may say that's down to chance, like being born into wealth (You can't choose to be or not to be born into wealth). But this is not the case, because Person A is getting a huge subsidy off a governing body and B isn't. IE someone made a decision to give A money and not B, therefore A has an unfair advantage.

Brian? wrote: »

Does it make sense to allow long term tenants to buy? Subjective again, but I believe it does. It means a more stable community can grow and eliminates a lot of social issues in an area that can come from a constantly changing demographic.

I agree with you to an extent, it depends an awful lot on who is buying.

Brian? wrote: »

Have you ever lived in a social housing scheme? I grew up in one.

I went to Scoil Eoin in Kilbarrack and live right beside a Social estate so yes.

andekwarhola · 10-10-2018 1:18pm

Arghus wrote: »

No, they do not.

I'm willing to bet that a lot of people on this very forum that are happily saying small landlords are evil were on here a few years back busy laughing at struggling people that got mortgages during the boom and boasting that they were quids-in and could 'emigrate to barcelona at a minute's notice if they wanted to'

Electric Sheep · 10-10-2018 1:22pm

grahambo wrote: »

Brian? wrote: »

It's actually not subjective at all.
Person A gets "something" for X and Person B gets the same or very similar "something" for Y, where Y is far greater than X.

Therefore person B has had to work far harder than A to have the same thing.

You may say that's down to chance, like being born into wealth (You can't choose to be or not to be born into wealth). But this is not the case, because Person A is getting a huge subsidy off a governing body and B isn't. IE someone made a decision to give A money and not B, therefore A has an unfair advantage.

If person B inherited money that was part of Y then he probably did not work harder for it than person A.

Beta Ray Bill · 10-10-2018 1:25pm

Electric Sheep wrote: »

If person B inherited money that was part of Y then he probably did not work harder for it than person A.

But their Parents did and their parents before them etc.
Hence my point about being born into wealth.

Regardless, very few people at the beginning of their working life inherit large amounts of money as it's not until they are approaching the end of their working life that their parents die

nthclare · 10-10-2018 1:25pm

andekwarhola wrote: »

I'm willing to bet that a lot of people on this very forum that are happily saying small landlards are evil were on here a few years back busy laughing at struggling people that got mortgages during the boom and boasting that they were quids-in and could 'emigrate to barcelona at a minute's notice if they wanted to'

I'd agree with you,and they'll be moaning when the arse falls out of it again.

THE ONLY REASON RENT HAS GONE SO HIGH IS FOR LANDLORDS THE RECOUP ALL THE MONEY THEY LOST WHEN THE PRICE OF HOUSE'S DROPPED. WHEN PEOPLE HADN'T A POT TO PISS IN THESE LANDLORDS WERE HAPPY OUT WHEN THEY WERE MAYBE LOOSING 100 EUROS A MONTH.

A lot of people in high places lost a lot of money from 2008....now their little Fiacra Oisine and Isobel will be off to college soon.

Time to get the serf's to pay for snowflakes education....

Tim Robbins · 10-10-2018 1:31pm

Just my own experience. In my twenties, I didn't do a masters, the Oz thing, had a boring job, lived at home, paid my mother rent and then saved up a deposit and bought a property at almost peak prices. It crashed and now has come back up. I lived in it for a while, then moved in with the Mrs and rented it out.

Most of friends are fascinated about this. Exactly how much I bought it for, how much rent I got, how much tax I pay, how much I could get if I sold it etc etc Friends of friends are fascinated. There is this under current that I am some loaded capitalist.

I try to explain, once you pay your tax and expenses you would be lucky to make 1 - 2K a year and that is for probably two weeks work that is distributed over the year. The reaction is usually no way, if you get 1K a month, that's 12K a year. Then I explain the outgoings and the fact it might be empty and that you pay the high rate of tax usually. They don't seem to get the paying tax thing. But most landlords do now. Anyway, they are still fascinated: "But you could sell it and make loads of money" then I explain no I can't blah blah blah...

So I guess there are different types of landlords. I always under charge on the basis that I get good tenants and have issues with just exploitation that the real right wing landlords get engrossed in.

I would be strongly in favour of very strict rent caps as when I hear some of the rents people paying, it just seems grossly unfair.

Keyzer · 10-10-2018 2:02pm

Yer Da sells Avon wrote: »

It doesn't seem to protect tenants very well either, considering (a) what we're currently paying, and (b) the absence of security of tenure. I live in dread of getting a phone call from my landlord, saying he's returning to Ireland and wants his apartment back. We really need a better system - one that makes it easier to kick someone out for not paying their rent, but also makes it impossible to kick someone out if they are paying their rent, abiding by the tenancy agreement, etc.

Although I understand where your coming from, making it impossible to get your property back if you are renting it out is a ridiculous suggestion.

Church on Tuesday · 10-10-2018 2:06pm

Samuel T. Cogley wrote: »

For whatever reason you've been dealing with slumlords. The vast majority of LL's are properly registered and deal with EFT. The alternative is to give up on various tax allowances and run the risk of being reported to the RTB.

The reason is that I needed a place to live.

There are some decent landlords who do things by the book, they are the minority though. That's just the reality.

Samuel T. Cogley · 10-10-2018 2:08pm

Church on Tuesday wrote: »

The reason is that I needed a place to live.

There are some decent landlords who do things by the book, they are the minority though. That's just the reality.

It's simply not though. The majority do things by the book. Granted in a given market segment you may get more chancers.

Edgware · 10-10-2018 2:23pm

Church on Tuesday wrote: »

The reason is that I needed a place to live.

There are some decent landlords who do things by the book, they are the minority though. That's just the reality.

No its not the reality. There are good landlords and good tenants. There are bad landlords and bad tenants. The dirtbirds usually find each other and deserve each other

Tim Robbins · 10-10-2018 2:44pm

People of both a left wing persuasion and right wing persuasion were fascinated about any financial info regarding the apartment.

My bonus for the best job I had one year was 13K which is over 6 times as much as I would make from the apartment in a very good year; but people rarely talk or have any interest in that.

Graces7 · 10-10-2018 2:46pm

Church on Tuesday wrote: »

The reason is that I needed a place to live.

There are some decent landlords who do things by the book, they are the minority though. That's just the reality.

Most of my rural landlords could barely , literally , read and write and had no idea of the rules.

Graces7 · 10-10-2018 2:48pm

Edgware wrote: »

No its not the reality. There are good landlords and good tenants. There are bad landlords and bad tenants. The dirtbirds usually find each other and deserve each other

Patently not true. I did not deserve most of my former landlords and they did not deserve a good tenant like myself

hatrickpatrick · 10-10-2018 2:50pm

roger_rabbit wrote: »

the only ideology which prevails right now is that of the left wing media and left wing politicans who oppose the idea of private property earning income full stop , we are swamped with left wing ideology in this country on a daily basis and it has created a truly toxic and false narrative when it comes to the issue of landlords , tenants and property in general .

That's my own ideology in fact, and I have no idea where you're getting the idea that government, whether local or national, agrees with it.

amcalester · 10-10-2018 2:52pm

Graces7 wrote: »

[/B]

Patently not true. I did not deserve most of my former landlords and they did not deserve a good tenant like myself

You should have properly vetted your potential landlords.

Squatter · 10-10-2018 2:52pm

Graces7 wrote: »

Most of my rural landlords could barely , literally , read and write and had no idea of the rules.

But you lived in the backwoods of the Iveragh peninsuala - a place so remote that your landlord's mongrel sheepdog was also his second cousin!

You could probably add that some of your rural landlords were themselves living in accommodation that, to any reasonably sophisticated tenant, would appear primitive, squalid and antiquated.

Irishcrx · 10-10-2018 2:57pm

I don't think generally people really understand that landlords don't profit a huge amount from a single house tenancy and then have to balance the risk vs reward , one bad tenant + rent arrears , damages and legal costs could well put you off ever doing it again and you have pretty much no legal backing in any sort of speedy manner, one bad tenant and there profits for that year could be in minus.

People spout high rents etc etc , yes and higher rental income = higher tax outgoings.

Example

Rental Income - €2,000 per month
Tax on income (Higher Rate) - €1040
Mortgage Payment - €700

Profit = €260

Trust me , €260 a month isn't a lot for the hassle that comes with being a landlord. Yes certain repairs can be written off as well as other deductions end of year but it isn't the goldmine people assume it to be unless you are already rich and rent a large number of properties and thus can afford the odd loss.

Andrewf20 · 10-10-2018 3:00pm

It's easy to be an expert in hindsight. For those who bought before the bubble, there was no real warning that the world economy would collapse in 2007. And with house prices rising there was a real feeling of missing the boat if you didn't get a property.

So I do sympathise with accidental landlords. Alot would happily get out of the landlord game if they could.

To this day, whether there is another world crash around the corner or not, getting on the property ladder is still like chasing a run away train, whereby you are trying to save money / gain salary faster than house prices increase.

n97 mini · 10-10-2018 3:14pm

Irishcrx wrote: »

Example

Rental Income - €2,000 per month
Tax on income (Higher Rate) - €1040
Mortgage Payment - €700

Profit = €260

As a rule of thumb, the rent has to be double the mortgage repayment to cover the mortgage after tax. If it doesn't the landlord has to cover the shortfall. Looking at property prices in Dublin it's very difficult to actually make this happen if you have a job, so people are less inclined to be landlords. Less landlords = less properties to rent = higher rents. It all comes down to supply and demand.

Ironically if profit on the rental was taxed, as it is in business, and not turnover, it would increase the supply and rents would actually fall.

Floppybits · 10-10-2018 3:26pm

Irishcrx wrote: »

Example

Rental Income - €2,000 per month
Tax on income (Higher Rate) - €1040
Mortgage Payment - €700

Profit = €260

I would argue that your profit is even less than that when you take into account insurance, Management fees (if you have them), sinking fund for repairs and replacements. After those are paid you wont be even seeing much change out of your €260 profit.

Beta Ray Bill · 10-10-2018 3:27pm

n97 mini wrote: »

Ironically if profit on the rental was taxed, as it is in business, and not turnover, it would increase the supply and rents would actually fall.

Yeah but then the bubble wont stop inflating and we don't want that.

See I think you can actually do this if you sent up a Ltd company and transfer the house into the company.

You then only pay 42% tax on the profit you transfer from the company to yourself right? You need to balance the books at the end of the year though so that your Ltd company doesn't make a profit or loss otherwise you're hit with 12.5 corporation tax right?

I think the problem is getting the house out of the Ltd company if you ever wanted to sell it and not be hit with Tax.

Brian? · 10-10-2018 3:29pm

grahambo wrote: »

It's actually not subjective at all.
Person A gets "something" for X and Person B gets the same or very similar "something" for Y, where Y is far greater than X.

Therefore person B has had to work far harder than A to have the same thing.

You may say that's down to chance, like being born into wealth (You can't choose to be or not to be born into wealth). But this is not the case, because Person A is getting a huge subsidy off a governing body and B isn't. IE someone made a decision to give A money and not B, therefore A has an unfair advantage.

Ok. Let’s say I agree it’s not fair, solely on a monetary stand point, what do you propose is done?

I agree with you to an extent, it depends an awful lot on who is buying.

It does. But the people with the means and decent foresight to buy are the ones you want to keep in an area, imo.

I went to Scoil Eoin in Kilbarrack and live right beside a Social estate so yes.

So no? You lived beside and not in a social housing estate? I know I’m being pedantic.

Brian? · 10-10-2018 3:29pm

Sultan_of_Ping wrote: »

It makes sense to sell the asset if it's not performing.

If people are paying rent then the income stream can be re-cycled to generate capital to build more houses.

The problem with social housing is that the discount against the market rent is waaaaaaaay too generous and the amount of tenants not paying is too high.

People get a property that suits their needs and their ability to pay, but then that's never reviewed. There should be more frequent reviews (of need and affordability) and more energetic management of the social housing stock.......so we can have more of it.

Agreed. 100%.

Beta Ray Bill · 10-10-2018 3:34pm

Brian? wrote: »

Ok. Let’s say I agree it’s not fair, solely on a monetary stand point, what do you propose is done?

Steady on there!!!!
Never said I had an answer!!!!

I suppose in an ideal world it would either be ALL social housing (very few people would own property)
OR
Completely private, and state provides absolutely no assistance.

I'd be leaning towards the 2nd option given this is Ireland.

The "Mix" we have at the moment isn't really great.

Brian? wrote: »

So no? You lived beside and not in a social housing estate? I know I’m being pedantic.

Yes and No, I spent a lot of my youth (up til about 12) hanging around Kilbarrack, as that's where my friends from school were.
That changed to Donaghmede when I went to secondary school

Floppybits · 10-10-2018 3:37pm

grahambo wrote: »

That changed to Donaghmede when I went to secondary school

You went posh then.

cruizer101 · 10-10-2018 3:38pm

Irishcrx wrote: »

Example

Rental Income - €2,000 per month
Tax on income (Higher Rate) - €1040
Mortgage Payment - €700

Profit = €260

I made some corrections

Example

Rental Income - €2,000 per month
Mortgage Payment - €700 (lets say 50/50 interest principle)
Mortgage interest Relief - €262.50 (75% of the interest €350)
Tax on remainder income (Higher Rate) - €903.50
Net Income - €1,096.50

Expenses (Managment etc) - €200
Mortgage Interest - €350
Profit = €546.50

Mortgage Interest is an expense but your full mortgage payment isn't. It is profit that you use to pay back a loan, when that loan is payed back you own that asset so the money isn't gone it is still yours just tied up in an asset.

I'm not under any illusion that there are massive profits to be made (the above actually seems like high rent given the mortgage) and troublesome tenants could easily wipe out profits but it annoys me that paying down the principle on a mortgage is seen as an expense it is just transferring your money slowly into an asset, it is still your it is just tied up in a property.

ImARebel · 10-10-2018 3:51pm

and then there is us playing it by the book only putting it up by the allowed 4%, everyone else is playing dirty kicking out tenants and getting more money on the next one, we're actually 800eur under current market value

that hurts...

yes i know we can lie and kick them out and all of that.. but i (probably stupidly) feel no good will come of that money if we do something like that

so we suck it up and get on with it... bitter pill to swallow at the same time

Laois_Man · 10-10-2018 3:54pm

cruizer101 wrote: »

I made some corrections

Example

Rental Income - €2,000 per month
Mortgage Payment - €700 (lets say 50/50 interest principle)
Mortgage interest Relief - €262.50 (75% of the interest €350)
Tax on remainder income (Higher Rate) - €903.50
Net Income - €1,096.50

Expenses (Managment etc) - €200
Mortgage Interest - €350
Profit = €546.50

Mortgage Interest is an expense but your full mortgage payment isn't. It is profit that you use to pay back a loan, when that loan is payed back you own that asset so the money isn't gone it is still yours just tied up in an asset.

I'm not under any illusion that there are massive profits to be made (the above actually seems like high rent given the mortgage) and troublesome tenants could easily wipe out profits but it annoys me that paying down the principle on a mortgage is seen as an expense it is just transferring your money slowly into an asset, it is still your it is just tied up in a property.

I doubt there's very many Landlords in the country taking in €2,000 per month and paying only €700 mortgage.

Although the money is paying of an asset, in many cases the value of that asset may have been an overall loss/profit/break-even depending on when you purchased the house. So yeah, if you purchased in Dublin in the 90's or inherited, you're laughing. But if you bought in '05-'07 say in the Dublin commuter belt, the rental income for the last ~12 years would not have been paying the mortgage and the value of the property is still at 70%-75% what you paid for it.

steddyeddy · 10-10-2018 4:00pm

grahambo wrote: »

^^^ This ^^^
is ALOT of people.

It's completely unprofitable to Rent a house that has a recently drawn down mortgage on it.

The only way you can make a living on being a Landlord is if you inherit a property.

The other option is Air B&B. Short term lets are 0 hassle and quite profitable.
But the government don't want this now*, and could be planning to make a move against it.
I think it's a bad idea, interfering with the Free Market always makes things worse.

But may I say that's hard but also the case for people in any job. The luxury is that you can potentially be a landlord and work. In other words you can generate money from an asset and then work to generate profit. You'll have the advantageous situation of not paying that much of your wages on your mortgage and/or rent.

The fact that it's hassle isn't indicative that it's not advantageous.

Beta Ray Bill · 10-10-2018 4:07pm

cruizer101 wrote: »

I made some corrections

Example

Rental Income - €2,000 per month
Mortgage Payment - €700 (lets say 50/50 interest principle)
Mortgage interest Relief - €262.50 (75% of the interest €350)
Tax on remainder income (Higher Rate) - €903.50
Net Income - €1,096.50

Expenses (Managment etc) - €200
Mortgage Interest - €350
Profit = €546.50

Mortgage Interest is an expense but your full mortgage payment isn't. It is profit that you use to pay back a loan, when that loan is payed back you own that asset so the money isn't gone it is still yours just tied up in an asset.

I'm not under any illusion that there are massive profits to be made (the above actually seems like high rent given the mortgage) and troublesome tenants could easily wipe out profits but it annoys me that paying down the principle on a mortgage is seen as an expense it is just transferring your money slowly into an asset, it is still your it is just tied up in a property.

Good Post

Bit in Bold got me too, seem very low.
My Mortgage is €1751 per month, I'd need to be renting for near €3k a month to balance out.

EDIT: I think you're numbers are wrong (903/40)*100 = 2257.5 ?

steddyeddy wrote: »

But may I say that's hard but also the case for people in any job. The luxury is that you can potentially be a landlord and work. In other words you can generate money from an asset and then work to generate profit. You'll have the advantageous situation of not paying that much of your wages on your mortgage and/or rent.

The fact that it's hassle isn't indicative that it's not advantageous.

You still have to live somewhere.
Post above show not a huge amount of profit to be made.
You cannot put a price on Hassle.
Hassle = Least desirable thing.

Do landlords in Ireland have it as tough as they think?

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