Now ye're talking - to a landlord

I'm a Landlord, AMA · 04-03-2020 10:53am

Febreeze wrote: »

What is your opinion on the HAP? And, why is is so hard to find landlords that will accept it? Also, what is your opinion on landlords raising rent after tenants living in their property after 10 plus years? I say, fair play to you owning these properties and renting them. The renting game is fierce these days

HAP used to be great , you would get a tenant with HAP and the money would be in your bank account the following week , now there is a delay of 3-4 months getting a new application processed from them . so if a tenant moves in it can be up to 4 months before you get any Rent

Also there are some landlord home insurance companies that charge higher rates if you are accepting HAP or RAS ..

I have no problem with it but I did have to fund the mortgage for 4 months which given xmas ,my own mortgages etc wasn't fun

I'm a Landlord, AMA · 04-03-2020 10:56am

Luimneach2018 wrote: »

Have you noticed any particular changes in the general behaviour/characteristics of tenants between 2004 and now or is it largely the same?

Yep unfortunately I have , Tenants are like mice now they are afraid to mention anything in case they are asked to leave..., I noticed in one of my places the electric shower wasn't working .. the tenant told me they didn't want to annoy me over it .. I told her that a non working electric shower could cause a fire or worse and I needed to know when stuff breaks so I can put it right for them asap..

Boards.ie: Niamh · 04-03-2020 11:04am

Please note I have removed a number of posts that were not part of the AMA - please stay on topic with questions for our landlord guest. Thanks.

[Deleted User] · 04-03-2020 11:55am

What would you think of the doing away with the idea of housing as an asset? Limiting houses to say two per person or company?

I'm a Landlord, AMA · 04-03-2020 12:15pm

partyjungle wrote: »

What would you think of the doing away with the idea of housing as an asset? Limiting houses to say two per person or company?

I wouldn't agree with that at all .. Landlords bring in a lot of tax revenue and provide a service to the public .. Also its not easy to be a landlord you do need a big deposit up front and be prepared for the long haul and also have money to hand to pay tax bills etc

spaceHopper · 04-03-2020 1:22pm

Do you not get tax relief on the interest

https://www.irishtimes.com/business/budget-2019-tax-cut-on-the-way-for-landlords-1.3657523

I manage a house in flats for my mother and I agree you get tenants to telling you stuff is broken in the end it always causes more trouble for you. Hey may shower has been making noise its now stopped working can you fix it. Sure but I could have ordered new brushes for the motor now you need a new shower

I'm a Landlord, AMA · 04-03-2020 1:30pm

spaceHopper wrote: »

Do you not get tax relief on the interest

https://www.irishtimes.com/business/budget-2019-tax-cut-on-the-way-for-landlords-1.3657523

I manage a house in flats for my mother and I agree you get tenants to telling you stuff is broken in the end it always causes more trouble for you. Hey may shower has been making noise its now stopped working can you fix it. Sure but I could have ordered new brushes for the motor now you need a new shower

hi there,
I had to laugh at that headline when i saw it last year . i remember a tenant even mentioning to me how FG were the Landlord party and how it was apparently another giveaway tax cut for the elite !!

But in reality all it was , was bringing it inline with other industries .. in reality it was a saving of about 400 euro a year on an 807k mortgage …
i am on a tracker of .75% so my interest is very low

BigPoppaDump · 04-03-2020 1:53pm

Other than being a landlord, whats your "real" job?

Have you ever had a tenant proposition you with a bit of slap and tickle if they couldn't afford rent?

Have you ever had a tenant make a claim from you through your insurance?

I'm a Landlord, AMA · 04-03-2020 1:56pm

BigPoppaDump wrote: »

Other than being a landlord, whats your "real" job?

Have you ever had a tenant proposition you with a bit of slap and tickle if they couldn't afford rent?

Have you ever had a tenant make a claim from you through your insurance?

I work in IT
No and No

Better Than Christ · 04-03-2020 1:56pm

I'm a Landlord, AMA wrote: »

I wouldn't agree with that at all .. Landlords bring in a lot of tax revenue and provide a service to the public .. Also its not easy to be a landlord you do need a big deposit up front and be prepared for the long haul and also have money to hand to pay tax bills etc

They provide a service to the public in the absence of successive governments pulling their fingers out and doing so. The public avails of what is currently a highly expensive service because there's no other option. From the figures you posted, it seems as though you're more or less making ends meet, so it's not that difficult. Not right now, at least.

But what happens to you and your rental properties in the (admittedly unlikely) event of the market swinging the other way and average rents dropping to a fairer and more manageable level for tenants? And aside from your own hypothetical predicament, would that be a good or bad thing for society as a whole?

I'm a Landlord, AMA · 04-03-2020 2:01pm

Better Than Christ wrote: »

They provide a service to the public in the absence of successive governments pulling their fingers out and doing so. The public avails of what is currently a highly expensive service because there's no other option. From the figures you posted, it seems as though you're more or less making ends meet, so it's not that difficult. Not right now, at least.

But what happens to you and your rental properties in the (admittedly unlikely) event of the market swinging the other way and average rents dropping to a fairer and more manageable level for tenants? And aside from your own hypothetical predicament, would that be a good or bad thing for society as a whole?

Hi there
In 2008 I was in this predicament you mentioned
Interest rates were higher and rents were a lot less
I just had to suck it up and add my own money to the rent to cover it ... and use my own money to pay the tax bill

rents do need to go down I’ll be the first to say it ..

hap are paying far too much and it seems to me half the country are on it ....

I let a house in October and I had 200 applications from people on HAP and 5 without ....

There is also I feel a growing number of people ego think they are entitled to a house without ever doing a days work in their lives ......

John Hutton · 04-03-2020 2:01pm

When the revolution comes would you prefer the guillotine or the axe?

Geuze · 04-03-2020 2:48pm

I'm a Landlord, AMA wrote: »

At the moment I roughly take in monthly

4700 rent

Mortgage is 3450
House insurance 100
Annual tax bill is about 12k (say 1000 a month )
Solicitors fees 1500 a year
Prtb
Lpt
Maintaince and repairs

So basically I make zero in capital per month ( I did have to add money to the rent to cover the mortgage for a long time )

I hope nobody on the thread is making the typical, classic mistake of confusing profitability with cashflow.

When calculating net rental profits, we deduct mortgage interest from the gross rent.

When calculating cashflow, as what seems to be above, we deduct mortgage interest and mortgage capital repayment.

Remember, the capital repayment is a form of saving.

It appears from above that massive profits are being earned, as the 3450 seems to include both interest and capital repayments.

Graham · 04-03-2020 2:57pm

Many profitable business fail because of cashflow issues.

Sustaining a negative cashflow for 15 years is no mean feat.

I'm a Landlord, AMA · 04-03-2020 3:16pm

Geuze wrote: »

I hope nobody on the thread is making the typical, classic mistake of confusing profitability with cashflow.

When calculating net rental profits, we deduct mortgage interest from the gross rent.

When calculating cashflow, as what seems to be above, we deduct mortgage interest and mortgage capital repayment.

Remember, the capital repayment is a form of saving.

It appears from above that massive profits are being earned, as the 3450 seems to include both interest and capital repayments.

If you can let me know where the massive profits are then let me know...
Profits on Paper or virtual money tied up in equity are of no value .. they wont buy a new washing machine or pay a plumber.
i had 400k in equity in 2007 .. this went to -400k in 2012...

The houses are still only worth 66% of what i paid for them in 2004-2006 and they were in negative equity for 10 years

I was also using my own money to top up the rents,pay all the taxes,house insurance etc for about 10 years,
and i had to make sure i had enough cashflow at all times for repairs /taxes etc

djan · 04-03-2020 3:42pm

Fair play to you OP. The negative and uninformed comments are a good reflection of the opinions shoved down the throats of the general public.

It's quite difficult to manage rental properties. There is a huge risk associated with it, especially given the law here being very pro tennant. Yes there are monetary gains to be made but not as easily as people make it out to be. A return on investment is not guaranteed as even as of now after pumping 10's of thousands of euros, still only about breaking even.

To help aid the crisis I would argue for lowering of taxes, enforcing rental agreements (both in level of service provided and non payment evictions) and reducing the requirements on news builds while easing foreign building contractors to operate?

My questions is, as a landlord do you think the above would work?

I'm a Landlord, AMA · 04-03-2020 3:48pm

djan wrote: »

Fair play to you OP. The negative and uninformed comments are a good reflection of the opinions shoved down the throats of the general public.

It's quite difficult to manage rental properties. There is a huge risk associated with it, especially given the law here being very pro tennant. Yes there are monetary gains to be made but not as easily as people make it out to be. A return on investment is not guaranteed as even as of now after pumping 10's of thousands of euros, still only about breaking even.

To help aid the crisis I would argue for lowering of taxes, enforcing rental agreements (both in level of service provided and non payment evictions) and reducing the requirements on news builds while easing foreign building contractors to operate?

My questions is, as a landlord do you think the above would work?

Hi there,

Yes i agree with some of your points

Additionally I would also like to see the PRTB holding deposits or another third party

i would not like to reduce requirements on new builds …(specs?)
and re the foreign contractors i have had friends work on site where 2 lads were doing the same jobs .. one was being paid 5 an hour from a Turkish company and the other 25 from an Irish company .. .i don't agree with this

argolis · 04-03-2020 5:33pm

I'm a Landlord, AMA wrote: »

If you can let me know where the massive profits are then let me know...
Profits on Paper or virtual money tied up in equity are of no value .. they wont buy a new washing machine or pay a plumber.
i had 400k in equity in 2007 .. this went to -400k in 2012...

I'm in a similar situation with a single apartment which I co-own. Bought in 2005. Still in negative equity, the rent is finally covering enough mortgage + tax so that it's now cashflow neutral when we used to have to subsidise it.

But I also recognise that there's a mortgage being paid down on it and one day that will be gone and almost all the rent is then income. It's an enforced savings plan.

I don't agree with your opinion that you're not "earning anything" from it. As others have pointed out, you're paying down a massive mortgage and will in 9 years own three places free and clear. How you can say "you don't know where the profits are" is beyond me.

If I use a mortgage calculator for 807k @ 25 years with 9 years remaining, I guesstimate you bought the places for at least 900k total, you now have 320k outstanding and your repayments in 2020 are now split into €7,100 in interest and €34,400 in capital. That capital payment? That's your profits.

I just did some rough spreadsheet calculations using the expenses figures you quoted. For me, they don't work out as there's a 10k hole in them. For you to have a €12k tax bill at the higher rate of tax means you have €24k of taxable profits and therefore you'd have about €32k of expenses.

Even being generous and saying €20,000 of that was mortgage interest, you've got outgoings each year of €44,000 expenses + tax, meaning you're still netting €12,000

And even if I'm waaaaay off and you're only about cashflow neutral, you're still paying down a mortgage at a rate of at least €24k per annum, if not €34k.

When that mortgage is paid off, those places will be netting you €34,000, after tax.

I totally applaud your gumption in buying those places, especially young, sticking with them, everything you've done and wish you all the best because I know what goes into it. I also appreciate your other answers, they're interesting.

But in 9 years you'll own at least 600k worth of assets producing at least €34,000 cash into your hand. To come on here and say "money tied up in equity is of no value" and "where are the massive profits" is insulting anyone's intelligence, as if the properties are somehow worthless.

I'm a Landlord, AMA · 04-03-2020 5:42pm

argolis wrote: »

I'm in a similar situation with a single apartment which I co-own. Bought in 2005. Still in negative equity, the rent is finally covering enough mortgage + tax so that it's now cashflow neutral when we used to have to subsidise it.

But I also recognise that there's a mortgage being paid down on it and one day that will be gone and almost all the rent is then income. It's an enforced savings plan.

I don't agree with your opinion that you're not "earning anything" from it. As others have pointed out, you're paying down a massive mortgage and will in 9 years own three places free and clear. How you can say "you don't know where the profits are" is beyond me.

If I use a mortgage calculator for 807k @ 25 years with 9 years remaining, I guesstimate you bought the places for at least 900k total, you now have 320k outstanding and your repayments in 2020 are now split into €7,100 in interest and €34,400 in capital. That capital payment? That's your profits.

I just did some rough spreadsheet calculations using the expenses figures you quoted. For me, they don't work out as there's a 10k hole in them. For you to have a €12k tax bill at the higher rate of tax means you have €24k of taxable profits and therefore you'd have about €32k of expenses.

Even being generous and saying €20,000 of that was mortgage interest, you've got outgoings each year of €44,000 expenses + tax, meaning you're still netting €12,000

And even if I'm waaaaay off and you're only about cashflow neutral, you're still paying down a mortgage at a rate of at least €24k per annum, if not €34k.

When that mortgage is paid off, those places will be netting you €34,000, after tax.

I totally applaud your gumption in buying those places, especially young, sticking with them, everything you've done and wish you all the best because I know what goes into it. I also appreciate your other answers, they're interesting.

But in 9 years you'll own at least 600k worth of assets producing at least €34,000 cash into your hand. To come on here and say "money tied up in equity is of no value" and "where are the massive profits" is insulting anyone's intelligence, as if the properties are somehow worthless.

Humm interesting ….
I did not mean to insult your intelligence ….

in 9 years time I may have 600k of assets producing 35k in rent a year or I may not … in 2007 I had 1.2 million of assets and then in 2012 I had 400K of assets ..All along I still had to fund a lot of it from my own pocket ...
who knows what's going to happen in 9 years time ..my point is that when someone tells you . you have a massive profit and you have a plumber calling or a leak in a roof or a hole in a wall I cant pay them in equity.. I have to use my own cash while paying my own mortgage to run all this and keep it going …

as I said earlier .. if I sold today and added up what I put in I would be at zero .. so where is the massive profits ??
zero after running 3 houses for 16 years ?? what profit ?? what massive profit ??

Diemos · 04-03-2020 5:50pm

argolis wrote: »

I'm in a similar situation with a single apartment which I co-own. Bought in 2005. Still in negative equity, the rent is finally covering enough mortgage + tax so that it's now cashflow neutral when we used to have to subsidise it.

But I also recognise that there's a mortgage being paid down on it and one day that will be gone and almost all the rent is then income. It's an enforced savings plan.

I don't agree with your opinion that you're not "earning anything" from it. As others have pointed out, you're paying down a massive mortgage and will in 9 years own three places free and clear. How you can say "you don't know where the profits are" is beyond me.

If I use a mortgage calculator for 807k @ 25 years with 9 years remaining, I guesstimate you bought the places for at least 900k total, you now have 320k outstanding and your repayments in 2020 are now split into €7,100 in interest and €34,400 in capital. That capital payment? That's your profits.

I just did some rough spreadsheet calculations using the expenses figures you quoted. For me, they don't work out as there's a 10k hole in them. For you to have a €12k tax bill at the higher rate of tax means you have €24k of taxable profits and therefore you'd have about €32k of expenses.

Even being generous and saying €20,000 of that was mortgage interest, you've got outgoings each year of €44,000 expenses + tax, meaning you're still netting €12,000

And even if I'm waaaaay off and you're only about cashflow neutral, you're still paying down a mortgage at a rate of at least €24k per annum, if not €34k.

When that mortgage is paid off, those places will be netting you €34,000, after tax.

I totally applaud your gumption in buying those places, especially young, sticking with them, everything you've done and wish you all the best because I know what goes into it. I also appreciate your other answers, they're interesting.

But in 9 years you'll own at least 600k worth of assets producing at least €34,000 cash into your hand. To come on here and say "money tied up in equity is of no value" and "where are the massive profits" is insulting anyone's intelligence, as if the properties are somehow worthless.

I think you are being a little harsh on the guy.
Your numbers are projections (the most likely outcome give the information at hand).
From his perspective right now, he just sees payments going out and does not differentiate which of the payment is interest vs capital.

You are making a lot of big assumptions that everything will stay the same and the poster will be milking it.
But right now, he is flat even, by the numbers. So I think he has answered honestly, as he sees it.
I hope he gets the figures you are stating.

argolis · 04-03-2020 6:01pm

Yeah look, I think my figures are wrong. The guy/gal has been eating the costs and will be for the next nine years. I just can't get behind the thinking that cashflow is everything, when it doesn't take into account the whole picture that someone is eventually going to be massively rewarded.

I read the comment as quite dismissive that the properties were worth anything really, which really tees me off especially when Boards is full of stories of people who struggle.

So, I apologise if I came across too harshly and do carry on!

I'm a Landlord, AMA · 04-03-2020 6:02pm

argolis wrote: »

Yeah look, I think my figures are wrong. The guy/gal has been eating the costs and will be for the next nine years. I just can't get behind the thinking that cashflow is everything, when it doesn't take into account the whole picture that someone is eventually going to be massively rewarded.

I read the comment as quite dismissive that the properties were worth anything really, which really tees me off especially when Boards is full of stories of people who struggle.

So, I apologise if I came across too harshly and do carry on!

thanks !;););)

dubrov · 04-03-2020 6:24pm

argolis wrote: »

Yeah look, I think my figures are wrong. The guy/gal has been eating the costs and will be for the next nine years. I just can't get behind the thinking that cashflow is everything, when it doesn't take into account the whole picture that someone is eventually going to be massively rewarded.

I read the comment as quite dismissive that the properties were worth anything really, which really tees me off especially when Boards is full of stories of people who struggle.

So, I apologise if I came across too harshly and do carry on!

In fairness, it is a huge point and needed to be made. Many will read this thread thinking Profit = Rent minus Mortgage payment.

Cashflow is a big problem for landlords but capital is where most of the profit is stored. Landlords in positive equity struggling with cashflow always have the option to remortgage or restructure the mortgage to release cashflow.

I'm a Landlord, AMA · 04-03-2020 6:34pm

dubrov wrote: »

In fairness, it is a huge point and needed to be made. Many will read this thread thinking Profit = Rent minus Mortgage payment.

Cashflow is a big problem for landlords but capital is where most of the profit is stored. Landlords in positive equity struggling with cashflow always have the option to remortgage or restructure the mortgage to release cashflow.

I see your point but its not that simple..

I am on a tracker of .75% if I went to the bank with any sort of issue they would do their best to get me off that …..adding 1000s to my repayments..

In the real world when you are dealing with your own bills and subbing the rent etc … Profit IS rent minus mortgage minus Tax bill....

As I said before if I sold everything now I would walk away with zero after 16 years...

DubCount · 04-03-2020 7:07pm

Is there anything that would convince you to buy/rent another property?

Pkiernan · 04-03-2020 7:12pm

The good old landlords haters out in force here.

SuperRabbit · 04-03-2020 7:14pm

I'm a Landlord, AMA wrote: »

That is true yes... I did have to save up the 8% deposit myself an then I think the stamp duty was another 15k and then 2k of solicitors bills . I wanted to get a rental house for my future/pension

Yeah but the thing is we all want to get a mortgage so we have a house for our future/pension/to live in and we can't get a mortgage. I'd really like you to say "I am really privileged, yes." That would make me happy.

As I said before if I sold everything now I would walk away with zero after 16 years...

Would you really walk away with zero? Has it not been part of your income for most of the last 16 years? How is that walking away with zero?

Would you say you are grateful for what you have?

You don't have to feel privileged or be grateful, you don't owe me anything, I'd just like to see that.

Graham · 04-03-2020 7:30pm

15 years of subsidising 3 properties and only just out of negative equity.

Living the dream

I'm a Landlord, AMA · 04-03-2020 7:32pm

SuperRabbit wrote: »

Yeah but the thing is we all want to get a mortgage so we have a house for our future/pension/to live in and we can't get a mortgage. I'd really like you to say "I am really privileged, yes." That would make me happy.

Would you really walk away with zero? Has it not been part of your income for most of the last 16 years? How is that walking away with zero?

Would you say you are grateful for what you have?

You don't have to feel privileged or be grateful, you don't owe me anything, I'd just like to see that.

It has not been any part of my income for 16 Years
I reckon I have put over 160k of my own money to keep them running the past 16 years
If I sold them all tomorrow I would walk away with prob 180k

I worked very hard to buy and keep the houses
I had 3 jobs at one stage .... as I said earlier when all my pals were in Ibiza /buying cars etc I was home saving
I don’t see how being grateful or privileged really applies here to be honest ....

Feisar · 04-03-2020 7:36pm

I'm a Landlord, AMA wrote: »

One fella was selling drugs
Another built a bomb in the garage and blew up an estate agents in Roscommon it was all over the news at the time ... gave them both notice ....the bomb fella made up all threats but nothing ever came of them .. he got 2 years in the end over it the house was raided and all over him

Does the state pay for the repairs after they kick in the door?

Now ye're talking - to a landlord

Comments