Good news for tenants in budget 2018

10-10-2018 11:28am

beauf wrote: »

Because people are only looking at it from whatever angle effects then only.

Not the bigger picture.

Speaking for myself, I have no angle. I own a house (singular) and have no need to rent.

However, the double think around this issue is comical.

We have a certain amount of housing stock in this country (yes we should build more). We know, because research tells us time after time, that most people in this country would like to own a house.

We also know that the majority of people renting would like to own a house.

Yet we keep talking about the massive 'demand' for rental property, to the extent that we seriously think the government helping potential landlords outbid potential owner occupiers is a good idea.

Every time that happens we create and meet demand for rental accommodation at the same time. Nobody other than the landlord wins, and apparently the landlord doesn't even win either because the whole leasing out property business is a hiding to nothing!

So why are we allowing this to happen?

How about make it LESS attractive to be a landlord and see what happens when we give potential owner occupiers a better chance of buying their own home? Is that really such a crazy idea?

Sleeper12 · 10-10-2018 11:28am

Technocentral wrote: »

Renting should not be profit based, it should be provided by the state only.

All due respect but Daftest statement of the thread so far imo

10-10-2018 11:29am

Samuel T. Cogley wrote: »

Dying business model? Some countries have people renting their entire lives and happy to do so. Why won't you get it into your head that some people should, or actually need to rent.

If you can't make money doing it then it's a dying business model.

Are you expecting the government to prop up your business because you can't cut it?

10-10-2018 11:30am

Sleeper12 wrote: »

All due respect but Daftest statement of the thread so far imo

It isn't that daft, it was done in the UK in the post war years and was extremely successful.

That doesn't mean it will always work but it's an option for sure.

marieholmfan · 10-10-2018 11:37am

Grumpypants wrote: »

State-controlled housing. That will end well.

Yeah it will. Much better to have the state for a landlord than some gombeen. (of course not all landlords are gombeens but most are).

Mod Note
The above statement is similar to saying most tenants are gombeens. So the less of that the better please. No more generalisations.

Samuel T. Cogley · 10-10-2018 11:40am

Deleted User wrote: »

If you can't make money doing it then it's a dying business model.

Are you expecting the government to prop up your business because you can't cut it?

I said atleast three times now (in fairness between this and the AH thread) it's not about the money, it's about the huge risks involved. I'd be more than happy with a return to sanity (about half of current rents) in return for proper legislation against deadbeat tenants.

Sleeper12 · 10-10-2018 11:44am

Deleted User wrote:

If you can't make money doing it then it's a dying business model.

Everyone makes a profit from renting property. What seems to have happened during the boom is that people were given false information about renting property. Many don't seem to have been told that it's a long term investment. The investment is the property. After 20 or 30 years you end up with a property that has totally paid for itself and you made a small profit. It's at this stage where the big profits comes in.

Many small landlords have been sold a pup in that they were led to believe that they would make big profits while at the same time paying the mortgage. As a result many small landlords feel cheated and frustrated with the system. Internet rates are historically low and rents are historically high. This is as good as it gets until the mortgage is paid off

Grumpypants · 10-10-2018 11:48am

Deleted User wrote: »

Yet we keep talking about the massive 'demand' for rental property, to the extent that we seriously think the government helping potential landlords outbid potential owner occupiers is a good idea.

?

I keep seeing this, but what advantage has a landlord over a normal buyer? Reinstating the tax deduction that was unfairly taken away, just to bring them back in line with other landlords is not a gain.

Considering a buyer has multiple assistance in buying.

Can apply for a 90% mortgage (Not available to landlords).
Affordable Housing scheme (Not available to landlords).
Rebuilding Ireland home loan lets buyers get a 90% mortgage at 2% (Not available to landlords).
First time buyers can get up to 20K towards their deposit with the Help to buy scheme.(Not available to landlords).
They got Tax Relief at source. (has been phased out now) (Not available to landlords).

Sleeper12 · 10-10-2018 11:49am

Deleted User wrote:

It isn't that daft, it was done in the UK in the post war years and was extremely successful.

If that successful it would still be the system in the UK. A new system will only survive if its better than the old system. It worked for awhile in the UK after the war because people didn't expect much after being on rations for years. Once they found out there was a better way they ran towards it.

Technocentral · 10-10-2018 11:54am

People should buy and sell houses to live in, I've nothing against private ownership and profit, but renting should not be for profit.

10-10-2018 11:55am

Sleeper12 wrote: »

If that successful it would still be the system in the UK. A new system will only survive if its better than the old system. It worked for awhile in the UK after the war because people didn't expect much after being on rations for years. Once they found out there was a better way they ran towards it.

It worked in the UK until the 'right to buy' was introduced. We later copied that and almost everyone involved now agrees it was a disastrous mistake.

Sleeper12 · 10-10-2018 12:17pm

Deleted User wrote:

It worked in the UK until the 'right to buy' was introduced. We later copied that and almost everyone involved now agrees it was a disastrous mistake.

Not everyone. We have a great system in Ireland. If FG didn't take its eye off the ball in 2012 and ignore the warnings we wouldn't be in this mess. FG actually made things worse by giving first time buyers more money in the form of a grant to push prices higher. The grant did nothing to encourage builders to build more. They would have been far better giving builders & investors an incentive to build.

I do agree that eventually when we have sorted the property market & there is no shortage that the government needs to bring in higher standards in rented property. I get attacked each time I say this but if your property is in reasonable condition than higher standards won't negatively effect you. I can only assume that the ones who attack the idea have something to hide.

Every taxi has to meet higher minimum standards than rental property in Ireland. It has to be clean. It can't have bad smells. Carpet has to be clean. They can be randomly stopped & checked. You can report a taxi at any time and they are checked every year. Most people spend a few hours per year in taxis and they have this standard yet the place that you live doesn't have to meet these standards. The system is nuts. Better minimum standards will only hurt bad landlords.

Grumpypants · 10-10-2018 12:20pm

Sleeper12 wrote: »

Everyone makes a profit from renting property. What seems to have happened during the boom is that people were given false information about renting property. Many don't seem to have been told that it's a long term investment. The investment is the property. After 20 or 30 years you end up with a property that has totally paid for itself and you made a small profit. It's at this stage where the big profits comes in.

Many small landlords have been sold a pup in that they were led to believe that they would make big profits while at the same time paying the mortgage. As a result many small landlords feel cheated and frustrated with the system. Internet rates are historically low and rents are historically high. This is as good as it gets until the mortgage is paid off

What happened to tons of landlords is the same as my story. I bought a house to live in and 5 years later lost my job. Because I owned a house I couldn't get a free house or any rent allowance from social welfare. Again punishing those that make an effort.

I still had to pay that mortgage so had to move to get work. I was an accidental landlord in negative equity in one city and a tenant in another (which means I lost the tax relief at source and the rent relief, again punishing those who try). I can't sell as I can't take a loss of tens of thousands of Euro. I've no option but to rent out the property until the price rises to a level that I can take the loss.

I get taxed to death on my wages, I got taxed to death buying the house, I get taxed to death for any tiny income I get from the loss making house. And to top it all off when I come to sell the house I'll get hit with an extra tax as it is now an investment property not a PPR.

I'm fed up with constantly getting hammered at every angle, and constantly made out to be "creaming it" in the media which is totally untrue. I get €920 rental income, and it costs me €790 a month between my mortgage and expenses. So I make a "profit" of €130 and I pay €300 tax on that because a mortgage isn't an allowable expense!! It costs me €170 a month.

Most like me are just waiting until they can sell without losing a huge chunk and will never make a profit. Even if I clear my mortgage in 14 years the value of the house will have had to double for me to break even.

That's the reality for most landlords. And why we are leaving in droves and driving a huge shortage of rental properties.

Sleeper12 · 10-10-2018 12:37pm

Grumpypants wrote:

What happened to tons of landlords is the same as my story. I bought a house to live in and 5 years later lost my job. Because I owned a house I couldn't get a free house or any rent allowance from social welfare. Again punishing those that make an effort.

You are the lost generation. While banks were bailed out lumping my grandchildren with debt the only thing done for the likes of yourself was the government made it harder for banks to repossess your home. Whilst this was a positive thing to do there is much more could have been done. Anyone that paid huge stamp duty in the 0s on their private home should have been exempt from property tax for up to 10 years for example. Mortgage interest relief could have been extended etc.

The likes of yourself got a raw deal. There is no denying that. Others actually lost their homes & became part of the 10,000. Some people forget that there are some genuine & deserving cases on the housing list

Grumpypants · 10-10-2018 1:02pm

Sleeper12 wrote: »

You are the lost generation. While banks were bailed out lumping my grandchildren with debt the only thing done for the likes of yourself was the government made it harder for banks to repossess your home. Whilst this was a positive thing to do there is much more could have been done. Anyone that paid huge stamp duty in the 0s on their private home should have been exempt from property tax for up to 10 years for example. Mortgage interest relief could have been extended etc.

The likes of yourself got a raw deal. There is no denying that. Others actually lost their homes & became part of the 10,000. Some people forget that there are some genuine & deserving cases on the housing list

Lots of deserving families. Including the one in my house. The mum had to stop working to care full time for her sick kid. Up until this year, I was only getting €600 from the council, in a zone that regularly gets €1200 a month.

I'm a private landlord providing social housing and taking a huge loss doing it as I couldn't see them being put out on the street. And then I see the likes of Murphy yesterday saying it was a landlords budget yesterday, that we don't deserve any help.

10-10-2018 1:09pm

Grumpypants wrote: »

What happened to tons of landlords is the same as my story. I bought a house to live in and 5 years later lost my job. Because I owned a house I couldn't get a free house or any rent allowance from social welfare. Again punishing those that make an effort.

I still had to pay that mortgage so had to move to get work. I was an accidental landlord in negative equity in one city and a tenant in another (which means I lost the tax relief at source and the rent relief, again punishing those who try). I can't sell as I can't take a loss of tens of thousands of Euro. I've no option but to rent out the property until the price rises to a level that I can take the loss.

I get taxed to death on my wages, I got taxed to death buying the house, I get taxed to death for any tiny income I get from the loss making house. And to top it all off when I come to sell the house I'll get hit with an extra tax as it is now an investment property not a PPR.

I'm fed up with constantly getting hammered at every angle, and constantly made out to be "creaming it" in the media which is totally untrue. I get €920 rental income, and it costs me €790 a month between my mortgage and expenses. So I make a "profit" of €130 and I pay €300 tax on that because a mortgage isn't an allowable expense!! It costs me €170 a month.

Most like me are just waiting until they can sell without losing a huge chunk and will never make a profit. Even if I clear my mortgage in 14 years the value of the house will have had to double for me to break even.

That's the reality for most landlords. And why we are leaving in droves and driving a huge shortage of rental properties.

Let's pick this apart.

Firstly it would be interesting to know when you bought. You have 14 years to clear the mortgage, if it was a 25 year mortgage then you probably bought near the top of the boom, but if it was a tracker (again, it should be based on the timings) then you really shouldn't still be in negative equity based on making repayments for 11 years.

So just sell up?

You say you are 'losing' €170 a month. But how much of the mortgage principal are you paying off every month? Are you including that in your analysis, and if not why not?

The Student · 10-10-2018 1:09pm

Sleeper12 wrote: »

Not everyone. We have a great system in Ireland. If FG didn't take its eye off the ball in 2012 and ignore the warnings we wouldn't be in this mess. FG actually made things worse by giving first time buyers more money in the form of a grant to push prices higher. The grant did nothing to encourage builders to build more. They would have been far better giving builders & investors an incentive to build.

I do agree that eventually when we have sorted the property market & there is no shortage that the government needs to bring in higher standards in rented property. I get attacked each time I say this but if your property is in reasonable condition than higher standards won't negatively effect you. I can only assume that the ones who attack the idea have something to hide.

Every taxi has to meet higher minimum standards than rental property in Ireland. It has to be clean. It can't have bad smells. Carpet has to be clean. They can be randomly stopped & checked. You can report a taxi at any time and they are checked every year. Most people spend a few hours per year in taxis and they have this standard yet the place that you live doesn't have to meet these standards. The system is nuts. Better minimum standards will only hurt bad landlords.

The HAP standards are too high. We have a housing crisis and yet the council insist on high standards.

Also to compare a rented property to a taxi is unrealistic. A taxi driver can control his taxi and can clean it up as he needs to, with a property the landlord can give a property in great condition but unless the tenant keeps is cleaned and aired then it gets into disrepair and then the landlord has to prove it was not like that when given to the tenant.

godtabh · 10-10-2018 1:10pm

Technocentral wrote: »

People should buy and sell houses to live in, I've nothing against private ownership and profit, but renting should not be for profit.

Then who provides the rental stock? No profit then the no landlords. The goverment wont supply the stock.

The Student · 10-10-2018 1:16pm

Grumpypants wrote: »

Lots of deserving families. Including the one in my house. The mum had to stop working to care full time for her sick kid. Up until this year, I was only getting €600 from the council, in a zone that regularly gets €1200 a month.

I'm a private landlord providing social housing and taking a huge loss doing it as I couldn't see them being put out on the street. And then I see the likes of Murphy yesterday saying it was a landlords budget yesterday, that we don't deserve any help.

I am also in the same position. I developed a friendship with the tenants who have been with me for years and when one of them lost there job I kept the rent low. I am now stuck with the low rent in a rent pressure zone.

If my tenants ever leave I will be selling up as I am stuck with the low rent and don't want to risk new tenants on the low rate and the anti landlord stance that is out there now.

I am willing to break even on my tenants as they are model tenants who keep the house as it is their own and they have made it a home rather than just a house. But once they signal they are leaving the property will be placed on the open market.

I have always said that while they are my properties they are their homes and only if something major changes in either my circumstances or legislation will I look to sell.

With the anti landlord stance and the rent pressure zones I will be selling once my good tenants leave.

Fian · 10-10-2018 1:19pm

Deleted User wrote: »

Providing housing? Landlords do not provide housing. People who build houses provide housing.

Let's imagine a single village containing ten families and ten houses. Daddy in one lucky family inherits a lot of money and buys all the houses in the village. His family live in one and he lets the other 9 out to the other 9 families.

Would you say that the landlord in this case is 'providing housing'? Do you think it makes sense to make it easier for him to buy these houses and make more money from them? Should the government get involved to help this poor chap?

More importantly, if he left the market and sold up, and the other 9 families got a home of their own - did we lose something?

this is the fundamental question isn't it. You are absolutely right, if losing the landlord here does not exacerbate teh housing situation then there is no reason whatsoever that Government should care about landlords exiting teh sector.

But let's take your scenario and make it a bit more realistic, move it from the hypothetical village to a more realistic city.

So daddy has bought 9 houses and has rented them out. He decides to exit, should we care?

Lets say the nine houses are 4bed semi-Ds. a realistic occupancy profile would be let's say 6-8 adults in each. He sells them up to owner occupiers. Lets say the purchasers are a typical family, 2 adults and 2 children. We now have one household living in a property where there were lets say 2 couples and 4 singles living before. There are now lots more people looking for alternative rental accomodation, the corresponding benefit is that there is one less family looking to buy or rent.

This is a less efficient/productive use of the housing stock. This is why there is a desire that landlords not exit the sector.

Let's move then to a worse scenario. Let's just say the landlord has one or two rental properties rather than ten, which is the case for the vast majority of landlords in ireland. Let's imagine he has had them over 20 years and the mortgages are paid off. Let's say he is browned off with rental controls, tenants increased rights and increased regulatory requirements. Say he is alarmed at proposals to prevent him reposessing the property if he decides to sell, unwilling to pay to bring his property up to the required standards or to invest in repairs, resentful that he receives less than half of the rent after tax and concerned that he could face significant losses if a tenant decides to overhold or causes significat damage to his property. He is getting on in years and decides its all just not worth the hassle anymore. He figures the property is an inheritance for his kids and decides it will appreciate over time, he doesn't need to extract money from it and just decides to leave it vacant. This one is hopefully far less common but still this is a very clear loss and Government will not want to push anyone into this space. Not because they are worried abotu the landlord but again because it exacerbates the rental crisis.

Finally lets move to the biggest issue. Realistically landlords are not easily going to sell up even if they grumble and even less likely to just leave a property vacant. some will but many won't. If they are unhappy with the regulation of the sector and legal and tax burdens imposed they are however less likely to make fresh investments. Capital is highly mobile, it is very easy to decide "nah i would rather invest in bonds/shares/unit funds etc. rather than buy a property that i will have to manage myself.

One of the most efficient ways to address the housing/rental crisis is obviously to build more 2bed and one bed appartments. An increased supply of these wouyld be great news for tenants and for purchasers. So if you are a developer who are you planning to sell your block of appartments to? Obviously investors rather than owner occupiers, owner occupiers would tend to go for a 3 bed semi-D outside the city centre rather than an appartment, even if the appartment would suit them better in the imediate term before kids come along. If fresh landlord investment is dis-incentivised you have less appartment blocks being built, because developers are concerned there will be insufficient demand from investory purchasers. This is bad news for the rental crisis and is perhaps the biggest reason why balance is required. the developer is not going to risk the enormous amount of capital required to build teh appartment block if he is worried about what legislative proposals are coming next and worried that potentiall investors are deterred from buying because they are concerned at price controls, increased regulation, difficulty in regaining posession and the uncertainty of what might come next.

The Student · 10-10-2018 1:26pm

Fian wrote: »

this is the fundamental question isn't it. You are absolutely right, if losing the landlord here does not exacerbate teh housing situation then there is no reason whatsoever that Government should care about landlords exiting teh sector.

But let's take your scenario and make it a bit more realistic, move it from the hypothetical village to a more realistic city.

So daddy has bought 9 houses and has rented them out. He decides to exit, should we care?

Lets say the nine houses are 4bed semi-Ds. a realistic occupancy profile would be let's say 6-8 adults in each. He sells them up to owner occupiers. Lets say the purchasers are a typical family, 2 adults and 2 children. We now have one household living in a property where there were lets say 2 couples and 4 singles living before. There are now lots more people looking for alternative rental accomodation, the corresponding benefit is that there is one less family looking to buy or rent.

This is a less efficient/productive use of the housing stock. This is why there is a desire that landlords not exit the sector.

Let's move then to a worse scenario. Let's just say the landlord has one or two rental properties rather than ten, which is the case for the vast majority of landlords in ireland. Let's imagine he has had them over 20 years and the mortgages are paid off. Let's say he is browned off with rental controls, tenants increased rights and increased regulatory requirements. Say he is alarmed at proposals to prevent him reposessing the property if he decides to sell, unwilling to pay to bring his property up to the required standards or to invest in repairs, resentful that he receives less than half of the rent after tax and concerned that he could face significant losses if a tenant decides to overhold or causes significat damage to his property. He is getting on in years and decides its all just not worth the hassle anymore. He figures the property is an inheritance for his kids and decides it will appreciate over time, he doesn't need to extract money from it and just decides to leave it vacant. This one is hopefully far less common but still this is a very clear loss and Government will not want to push anyone into this space. Not because they are worried abotu the landlord but again because it exacerbates the rental crisis.

Finally lets move to the biggest issue. Realistically landlords are not easily going to sell up even if they grumble and even less likely to just leave a property vacant. some will but many won't. If they are unhappy with the regulation of the sector and legal and tax burdens imposed they are however less likely to make fresh investments. Capital is highly mobile, it is very easy to decide "nah i would rather invest in bonds/shares/unit funds etc. rather than buy a property that i will have to manage myself.

One of the most efficient ways to address the housing/rental crisis is obviously to build more 2bed and one bed appartments. An increased supply of these wouyld be great news for tenants and for purchasers. So if you are a developer who are you planning to sell your block of appartments to? Obviously investors rather than owner occupiers, owner occupiers would tend to go for a 3 bed semi-D outside the city centre rather than an appartment, even if the appartment would suit them better in the imediate term before kids come along. If fresh landlord investment is dis-incentivised you have less appartment blocks being built, because developers are concerned there will be insufficient demand from investory purchasers. This is bad news for the rental crisis and is perhaps the biggest reason why balance is required. the developer is not going to risk the enormous amount of capital required to build teh appartment block if he is worried about what legislative proposals are coming next and worried that potentiall investors are deterred from buying because they are concerned at price controls, increased regulation, difficulty in regaining posession and the uncertainty of what might come next.

Very good post.

marieholmfan · 10-10-2018 1:27pm

The state can easily fill the gap. Private landlords are unnecessary and private property development is unnecessary.

Fian wrote: »

this is the fundamental question isn't it. You are absolutely right, if losing the landlord here does not exacerbate teh housing situation then there is no reason whatsoever that Government should care about landlords exiting teh sector.

But let's take your scenario and make it a bit more realistic, move it from the hypothetical village to a more realistic city.

So daddy has bought 9 houses and has rented them out. He decides to exit, should we care?

Lets say the nine houses are 4bed semi-Ds. a realistic occupancy profile would be let's say 6-8 adults in each. He sells them up to owner occupiers. Lets say the purchasers are a typical family, 2 adults and 2 children. We now have one household living in a property where there were lets say 2 couples and 4 singles living before. There are now lots more people looking for alternative rental accomodation, the corresponding benefit is that there is one less family looking to buy or rent.

This is a less efficient/productive use of the housing stock. This is why there is a desire that landlords not exit the sector.

Let's move then to a worse scenario. Let's just say the landlord has one or two rental properties rather than ten, which is the case for the vast majority of landlords in ireland. Let's imagine he has had them over 20 years and the mortgages are paid off. Let's say he is browned off with rental controls, tenants increased rights and increased regulatory requirements. Say he is alarmed at proposals to prevent him reposessing the property if he decides to sell, unwilling to pay to bring his property up to the required standards or to invest in repairs, resentful that he receives less than half of the rent after tax and concerned that he could face significant losses if a tenant decides to overhold or causes significat damage to his property. He is getting on in years and decides its all just not worth the hassle anymore. He figures the property is an inheritance for his kids and decides it will appreciate over time, he doesn't need to extract money from it and just decides to leave it vacant. This one is hopefully far less common but still this is a very clear loss and Government will not want to push anyone into this space. Not because they are worried abotu the landlord but again because it exacerbates the rental crisis.

Finally lets move to the biggest issue. Realistically landlords are not easily going to sell up even if they grumble and even less likely to just leave a property vacant. some will but many won't. If they are unhappy with the regulation of the sector and legal and tax burdens imposed they are however less likely to make fresh investments. Capital is highly mobile, it is very easy to decide "nah i would rather invest in bonds/shares/unit funds etc. rather than buy a property that i will have to manage myself.

One of the most efficient ways to address the housing/rental crisis is obviously to build more 2bed and one bed appartments. An increased supply of these wouyld be great news for tenants and for purchasers. So if you are a developer who are you planning to sell your block of appartments to? Obviously investors rather than owner occupiers, owner occupiers would tend to go for a 3 bed semi-D outside the city centre rather than an appartment, even if the appartment would suit them better in the imediate term before kids come along. If fresh landlord investment is dis-incentivised you have less appartment blocks being built, because developers are concerned there will be insufficient demand from investory purchasers. This is bad news for the rental crisis and is perhaps the biggest reason why balance is required. the developer is not going to risk the enormous amount of capital required to build teh appartment block if he is worried about what legislative proposals are coming next and worried that potentiall investors are deterred from buying because they are concerned at price controls, increased regulation, difficulty in regaining posession and the uncertainty of what might come next.

listermint · 10-10-2018 1:28pm

The Student wrote: »

I am also in the same position. I developed a friendship with the tenants who have been with me for years and when one of them lost there job I kept the rent low. I am now stuck with the low rent in a rent pressure zone.

If my tenants ever leave I will be selling up as I am stuck with the low rent and don't want to risk new tenants on the low rate and the anti landlord stance that is out there now.

I am willing to break even on my tenants as they are model tenants who keep the house as it is their own and they have made it a home rather than just a house. But once they signal they are leaving the property will be placed on the open market.

I have always said that while they are my properties they are their homes and only if something major changes in either my circumstances or legislation will I look to sell.

With the anti landlord stance and the rent pressure zones I will be selling once my good tenants leave.

Break even like what? Tenants paying down the mortgage in total. i.e you not paying down the mortgage. For the Asset that you will end up with paid down by someone else.

that sort of break even ? It strikes me people dont know what the term means.

Claw Hammer · 10-10-2018 1:35pm

Deleted User wrote: »

Let's pick this apart.

Firstly it would be interesting to know when you bought. You have 14 years to clear the mortgage, if it was a 25 year mortgage then you probably bought near the top of the boom, but if it was a tracker (again, it should be based on the timings) then you really shouldn't still be in negative equity based on making repayments for 11 years.

So just sell up?

You say you are 'losing' €170 a month. But how much of the mortgage principal are you paying off every month? Are you including that in your analysis, and if not why not?

The poster has stated that he is in negative equity. Are you criticising him for buying at the wrong time? Not paying enough of? Not getting a good enough interest rate. The poster states he is cash flow negative. He states that he is technically making a profit but that only leaves him owing less on the property and does not translate into bankable cash. The poster is the classic example of who is paying for the crash. he is paying the highest taxes, the highest interest rates and is carrying a responsibility for a tenant who really should be the state's problem

marieholmfan · 10-10-2018 1:35pm

godtabh wrote: »

Then who provides the rental stock? No profit then the no landlords. The goverment wont supply the stock.

The government can easily do it. What do you think a council house is.

10-10-2018 1:37pm

Claw Hammer wrote: »

The poster has stated that he is in negative equity. Are you criticising him for buying at the wrong time? Not paying enough of? Not getting a good enough interest rate. The poster states he is cash flow negative. He states that he is technically making a profit but that only leaves him owing less on the property and does not translate into bankable cash. The poster is the classic example of who is paying for the crash. he is paying the highest taxes, the highest interest rates and is carrying a responsibility for a tenant who really should be the state's problem

I'm trying to diagnose what the problem is and haven't received an answer yet.

I bought close to the top of the market, I paid a fortune in stamp duty, I pay a mortgage every month and pay property tax every year. That's life.

The flip side is I got a tracker on a very low rate so I pay off a good chunk of the principal every month. Swings and roundabouts.

I don't know the exact circumstances of the poster so I am wondering what they actually are, is that a crime now?

10-10-2018 1:38pm

marieholmfan wrote: »

The government can easily do it. What do you think a council house is.

In addition, the question is always asked as if we need as much rental stock as we have now, when all available evidence is that when people have the choice they prefer to own.

If we help people own their own homes then the requirement for rental stock plummets.

godtabh · 10-10-2018 1:40pm

marieholmfan wrote: »

The government can easily do it. What do you think a council house is.

So take out all the private stock and let the government provide it all? Yeah that will work.

Any time lines for this?

marieholmfan · 10-10-2018 1:41pm

Deleted User wrote: »

In addition, the question is always asked as if we need as much rental stock as we have now, when all available evidence is that when people have the choice they prefer to own.

If we help people own their own homes then the requirement for rental stock plummets.

I prefer that the state rent it to them. Housing is a right and I am happy to assist other people to be housed. I am not happy to assist them to acquire an asset that they can then pass on to their children and allow them to keep the equity caused by economic improvement.

The Student · 10-10-2018 1:41pm

listermint wrote: »

Break even like what? Tenants paying down the mortgage in total. i.e you not paying down the mortgage. For the Asset that you will end up with paid down by someone else.

that sort of break even ? It strikes me people dont know what the term means.

I am currently breaking even but I did not when the rents fell through the floor but sure hey in your world I should make a loss all of the time and take all of the risk!

marieholmfan · 10-10-2018 1:42pm

The Student wrote: »

I am currently breaking even but I did not when the rents fell through the floor but sure hey in your world I should make a loss all of the time and take all of the risk!

So you made an absolute loss as opposed to a cash flow loss?

Claw Hammer · 10-10-2018 1:42pm

Deleted User wrote: »

I'm trying to diagnose what the problem is and haven't received an answer yet.

I bought close to the top of the market, I paid a fortune in stamp duty, I pay a mortgage every month and pay property tax every year. That's life.

The flip side is I got a tracker on a very low rate so I pay off a good chunk of the principal every month. Swings and roundabouts.

I don't know the exact circumstances of the poster so I am wondering what they actually are, is that a crime now?

You are speculating about his circumstances, ignoring what he actually posted. just because you were fool enough to buy at the top of the market does not mean everyone else was. Not everyone got a tracker. the poster is paying rent an is cash negative on his own property. It my not be so easy to pay down capital in that scenario. He has given enough of an outline of the facts, bt you are trying to superimpose your own preferred version on it.

The Student · 10-10-2018 1:42pm

marieholmfan wrote: »

It has worked all over Europe. What makes us different is the role of the developer in funneling money for rezoning to county councillors.

Have a look at the UK so and see how well they are doing!

marieholmfan · 10-10-2018 1:43pm

Claw Hammer wrote: »

You are speculating about his circumstances, ignoring what he actually posted. just because you were fool enough to buy at the top of the market does not mean everyone else was. Not everyone got a tracker. the poster is paying rent an is cash negative on his own property. It my not be so easy to pay down capital in that scenario. He has given enough of an outline of the facts, bt you are trying to superimpose your own preferred version on it.

But the facts quite literally don't add up and Orinoco is trying to understand what is going on.

The Student · 10-10-2018 1:44pm

marieholmfan wrote: »

So you made an absolute loss as opposed to a cash flow loss?

Yes I made a loss and not just a cashflow loss. Ironically I bought so I would have a pension and not need to rely on the State. More fool me.

10-10-2018 1:48pm

Claw Hammer wrote: »

You are speculating about his circumstances, ignoring what he actually posted. just because you were fool enough to buy at the top of the market does not mean everyone else was. Not everyone got a tracker. the poster is paying rent an is cash negative on his own property. It my not be so easy to pay down capital in that scenario. He has given enough of an outline of the facts, bt you are trying to superimpose your own preferred version on it.

He really hasn't given enough of the facts.

Look it's no skin off my nose. I really couldn't give a damn if he was 'fool enough' as you put it to buy at the top of the market with an interest only mortgage at 6%.

I was just wondering what the story was.

BTW in reference to you comment on my situation you should be aware that a) I sold a house to buy a house, so the impact of being at the top of the market wasn't such a big deal and b) more importantly I am not looking for sympathy here.

Claw Hammer · 10-10-2018 1:48pm

Sleeper12 wrote: »

Real investors stopped buying around 1995 as prices were going too high to get a real worthwhile return. Plenty a single let landlords entered the market in the 0s right up to 2007/2008. Many of these are struggling now. Some professional landlords re-entered the market 2010/2012 & bought for cash. It's not a good investment right now as house prices are so high. It has nothing to do with the tax setup or not being allowed to claim for mobile phone calls. It's because house prices are too expensive. Getting a buy to let now you couldn't expect to draw a profit on a weekly basis & there is the risk of another world recession looming or Brexit. It's a brave landlord that will buy today

Prices were quite low well up to 2000. I know an investor who bough an s23 in 1996 for 38k with 25k S23 allowances. Positive cash flow from day 1. Loan paid off and let at €1500 a month.

marieholmfan · 10-10-2018 1:52pm

Sleeper12 wrote: »

Real investors stopped buying around 1995 as prices were going too high to get a real worthwhile return. Plenty a single let landlords entered the market in the 0s right up to 2007/2008. Many of these are struggling now. Some professional landlords re-entered the market 2010/2012 & bought for cash. It's not a good investment right now as house prices are so high. It has nothing to do with the tax setup or not being allowed to claim for mobile phone calls. It's because house prices are too expensive. Getting a buy to let now you couldn't expect to draw a profit on a weekly basis & there is the risk of another world recession looming or Brexit. It's a brave landlord that will buy today

That is a very rational way of thinking. Too rational in a sense because many people are less rational than yourself.

Claw Hammer · 10-10-2018 1:57pm

Deleted User wrote: »

He really hasn't given enough of the facts.

Look it's no skin off my nose. I really couldn't give a damn if he was 'fool enough' as you put it to buy at the top of the market with an interest only mortgage at 6%.

I was just wondering what the story was.

BTW in reference to you comment on my situation you should be aware that a) I sold a house to buy a house, so the impact of being at the top of the market wasn't such a big deal and b) more importantly I am not looking for sympathy here.

he has outlined his situation. a forensic examination of his situation adds nothing more to his point. I never thought you were looking for sympathy, more for admiration. "Look how bright I am".

10-10-2018 2:01pm

Claw Hammer wrote: »

he has outlined his situation. a forensic examination of his situation adds nothing more to his point. I never thought you were looking for sympathy, more for admiration. "Look how bright I am".

Yeah I'm doing alright for myself.

I'm also able to work out when someone is spoofing on the internet, you should sharpen up the old critical faculties and give it a go.

Or to put it another way, his sums don't add up and I've called him on it.

Claw Hammer · 10-10-2018 2:05pm

Deleted User wrote: »

Yeah I'm doing alright for myself.

I'm also able to work out when someone is spoofing on the internet, you should sharpen up the old critical faculties and give it a go.

Or to put it another way, his sums don't add up and I've called him on it.

The only spoofing I see is coming from you. You have interjected a huge amount of speculation and assumption into a reasonably plausible story based on what you say are your own personal circumstances.

Sleeper12 · 10-10-2018 2:13pm

marieholmfan wrote:

That is a very rational way of thinking. Too rational in a sense because many people are less rational than yourself.

It is the first time I've been called rational on boards.ie. I'll take the complaint & run

Grumpypants · 10-10-2018 2:42pm

Deleted User wrote: »

Let's pick this apart.

Firstly it would be interesting to know when you bought. You have 14 years to clear the mortgage, if it was a 25 year mortgage then you probably bought near the top of the boom, but if it was a tracker (again, it should be based on the timings) then you really shouldn't still be in negative equity based on making repayments for 11 years.

So just sell up?

You say you are 'losing' €170 a month. But how much of the mortgage principal are you paying off every month? Are you including that in your analysis, and if not why not?

Bought around 2004, moved to a tracker alright around 2007 I think (just got in there before it all went belly up). think it was about 27 years. I had to do two years at interest only payments when I was out of work so that moved it about a bit.

House was 200K, it was a fresh build so I had to put another 50K into doing it up and fitting it out. So about 250K. Right now the house is worth under 160K. So even as I pay down the principle and release equity I'm still 90K down and that's not even factoring the interest on the mortgage.

I can't afford to up my payments as I'm pinned to the collar. I've a second mortgage now as I'd to buy where I now live. I've two small kids in child care that I get no assistance with because it isn't a creche. That's like a third mortgage.

Browney7 · 10-10-2018 3:15pm

Grumpypants wrote: »

Bought around 2004, moved to a tracker alright around 2007 I think (just got in there before it all went belly up). think it was about 27 years. I had to do two years at interest only payments when I was out of work so that moved it about a bit.

House was 200K, it was a fresh build so I had to put another 50K into doing it up and fitting it out. So about 250K. Right now the house is worth under 160K. So even as I pay down the principle and release equity I'm still 90K down and that's not even factoring the interest on the mortgage.

I can't afford to up my payments as I'm pinned to the collar. I've a second mortgage now as I'd to buy where I now live. I've two small kids in child care that I get no assistance with because it isn't a creche. That's like a third mortgage.

So if you wanted to close out the position on the negative equity mortgage now you'd need to come up with say 20 grand on top of the sale price (say mortgage is 180k) but if you wait another year, you'll have lost 130 a month for 12 months (1560) but the outstanding principal on the loan may be now 175 (ie your wealth will become less negative to the tune of 3440)

marieholmfan · 10-10-2018 3:29pm

Grumpypants wrote: »

I've two small kids in child care that I get no assistance with because it isn't a creche. That's like a third mortgage.

Is that a nanny?

Grumpypants · 10-10-2018 3:38pm

marieholmfan wrote: »

Is that a nanny?

Lady who minds kids in her house. We wanted them in a family environment.

marieholmfan · 10-10-2018 3:39pm

Grumpypants wrote: »

Lady who minds kids in her house. We wanted them in a family environment.

Nice idea. Can be pricey.

Grumpypants · 10-10-2018 3:45pm

Browney7 wrote: »

So if you wanted to close out the position on the negative equity mortgage now you'd need to come up with say 20 grand on top of the sale price (say mortgage is 180k) but if you wait another year, you'll have lost 130 a month for 12 months (1560) but the outstanding principal on the loan may be now 175 (ie your wealth will become less negative to the tune of 3440)

I think I used negative equity incorrectly. I could sell and pay off the mortgage. There would be very little left over. and the tens of thousands already spent would be lost.

10-10-2018 3:49pm

Grumpypants wrote: »

I think I used negative equity incorrectly. I could sell and pay off the mortgage. There would be very little left over. and the tens of thousands already spent would be lost.

I was about to say the same thing - I don't think you are in negative equity based on how you describe your situation.

If you want some genuine advice I would consider selling up. It sounds like you can do without the hassle and houses are going for more than the asking price in the current climate, although it depends exactly where it is.

There's an old phrase good money after bad that springs to mind. As mentioned above I paid a huge amount of money in stamp duty (like an obscene amount) and I'll never see it again. So be it, there's nothing you can do about things like that.

Grumpypants · 10-10-2018 4:03pm

Deleted User wrote: »

I was about to say the same thing - I don't think you are in negative equity based on how you describe your situation.

If you want some genuine advice I would consider selling up. It sounds like you can do without the hassle and houses are going for more than the asking price in the current climate, although it depends exactly where it is.

There's an old phrase good money after bad that springs to mind. As mentioned above I paid a huge amount of money in stamp duty (like an obscene amount) and I'll never see it again. So be it, there's nothing you can do about things like that.

I looked at selling to the council to see if they could keep the tenant in place, but as usual there is a backward rule where the house has to be empty. I've a year left in my contract with the tenant so I'll honor that.

As long as house prices go up and the mortgage gets paid down I do make back a small amount. If I didn't have a tracker I'd have sold long ago, but I'll never get money that cheap ever again so it is harder to let it go.

Good news for tenants in budget 2018

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