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6000 landlords a year existing the rental market

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    #62
    the_syco
    Registered Users Posts: 37,295 ✭✭✭✭the_syco


    Bass Reeves wrote: »
    LL's with multiple units will have units that are 20+ years old often in a good area but in poor condition. Maybe teak windows, poor insulation, low BER, poor decor inside only attractive to lower income clients. A 30-40k upgrade which is tax deductible against all rental income would increase rent by 20-50% depending on original condition
    AFAIK, upgrading appearance doesn't allow you to up the rent in an RPZ.


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    #63
    Pkiernan
    Registered Users Posts: 4,315 ✭✭✭Pkiernan


    Edgware wrote: »
    58 one beds advertised for Dublin 6 last Friday on Daft. The rental market is in trouble and if a landlord wants a property rented he better start reducing rent.

    497000 households in Ireland are rentals.


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    #64
    Bass Reeves
    Registered Users Posts: 18,159 ✭✭✭✭Bass Reeves


    Ray Palmer wrote: »
    Upgrades are not tax deductible.

    Yes it is its classes as maintenance. First day costs before renting are not allowable. But upgrades are often classed as maintenance and are tax deductible. They are also allowable against rental income of other properties.

    Slava Ukrainii



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    #65
    Bass Reeves
    Registered Users Posts: 18,159 ✭✭✭✭Bass Reeves


    the_syco wrote: »
    AFAIK, upgrading appearance doesn't allow you to up the rent in an RPZ.

    I am fairly sure you are incorrect. In RPZ's lads are getting away with rising tents anyway. As well you have to factor in these will be houses that are after being vacated and probably empty for the bones of 12 months

    Slava Ukrainii



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    #66
    Ray Palmer
    Registered Users Posts: 8,355 ✭✭✭Ray Palmer


    beauf wrote: »
    More like rent is 900 could get 1700.
    The wear and tear on a rental is like 3 or 4 times a normal property.
    So sitting empty isn't isn't comparable to the wear renting.
    That's if you don't have problems. Which could be thousands even tens of thousands if very unlucky and take 2 yrs of no rent.
    Then you have current situation where you get no rent for the lockdown etc. it will be "interesting" how that resolves itself.

    But you are right these are fringe situations and while less hassle ultimately making considerably less money.
    But then people who want to make max money have gone AirBnB or 20 to a room all sublet.
    So everyone makes a compromise at some point.

    People leaving the market feel its too much hassle or risk for the gains. (there are other reasons to leave too) Anyone staying in, or getting in feels its worth it.

    You were the one saying 20% so I calculated based on that. I pointed out it would have to be above 50% to make some sense. How somebody gets in that situation would be extraordinary.

    You are talking like I have never been involved in rentals but have been for over 20 years.

    You cannot deduct upgrades to your property. There is an exception where there are Grant's involved but all else is maintenance. You can look up the legislation.

    You could show your maths and explain how somebody gets in the situation in the first place that would be great.


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    #67
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Bass Reeves wrote: »
    LL's with multiple units will have units that are 20+ years old often in a good area but in poor condition. Maybe teak windows, poor insulation, low BER, poor decor inside only attractive to lower income clients. A 30-40k upgrade which is tax deductible against all rental income would increase rent by 20-50% depending on original condition

    Upgrades are *not* tax deductible.
    Only replacements on a like for like basis are.
    Aka- you can't take our delapidated teak windows and put in decent triple glazed aluminium replacements- and try to claim it as an expense- it is not allowable. Replacing like with like- is.

    Additional insulation, decor etc- none of them are allowable expenses.

    In addition to everything- they also don't break the RPZ rent control on the unit. So- you could spend 100k doing up a property really nicely- but it legally can only be let for its last rental rate (+4% p.a. if a rent review is due)

    You may disagree- but trust me- enough people have tried to argue this with the Revenue Commissioners down the years- and been told where to go.

    This is why there are so many dilapidated rental units out there- there is no financial incentive to modernise or do them up.


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    #68
    Vestiapx
    Registered Users Posts: 985 ✭✭✭Vestiapx


    Graham wrote: »
    be as logical as asking your boss for a pay-cut to save on tax.
    More like asking for Mondays off because after tax and commuting you'd be happier just not working that day.


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    #69
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Vestiapx wrote: »
    More like asking for Mondays off because after tax and commuting you'd be happier just not working that day.

    I know I'd be perfectly happy to take a paycut to work a 4 day week- particularly if I was on the cusp of the tax bands- and the net cost of only working a 4 day week was less than a 20% cut in net pay...........

    You'd have to run the calculations to see whether it made sense.


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    #70
    Cuddlesworth
    Registered Users Posts: 13,980 ✭✭✭✭Cuddlesworth


    beauf wrote: »
    More like rent is 900 could get 1700.
    The wear and tear on a rental is like 3 or 4 times a normal property.
    So sitting empty isn't isn't comparable to the wear renting.

    Not even sure that works, it would take till year 5 to see a profit, year 6 for substantial profit. Income tax could skew that much higher if it was retirement income for example. That's 5 years of assuming rents don't start decreasing(which would affect the higher price over the lower price).

    Risk due to tenants not paying can happen at any point along the rent scale.
    Also landlords who were caught significantly under market rates when the rent controls came in, usually income was not at the top of their mind.


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    #71
    Bass Reeves
    Registered Users Posts: 18,159 ✭✭✭✭Bass Reeves


    The_Conductor wrote: »
    Upgrades are *not* tax deductible.
    Only replacements on a like for like basis are.
    Aka- you can't take our delapidated teak windows and put in decent triple glazed aluminium replacements- and try to claim it as an expense- it is not allowable. Replacing like with like- is.

    Additional insulation, decor etc- none of them are allowable expenses.

    In addition to everything- they also don't break the RPZ rent control on the unit. So- you could spend 100k doing up a property really nicely- but it legally can only be let for its last rental rate (+4% p.a. if a rent review is due)

    You may disagree- but trust me- enough people have tried to argue this with the Revenue Commissioners down the years- and been told where to go.

    This is why there are so many dilapidated rental units out there- there is no financial incentive to modernise or do them up.

    You can no longer get teak windows. So you cannot replace like for like. It's impossible to replace like for like as technology changes. Upgrades can be listed as maintenance. The reason most Landlords do not reinvest in properties is often the return is greater to buy another property.

    There are work arounds. At present until December '21 provided premises is vacant for 12 months expenses in revamping it are allowable. As well if you bring the BER up by 7 units below D, 5 units at D and 3 units at C, you are allowed to rise rent in an RPZ. Finally if rental is vacant for longer than 24 months RPZ rates can be reset.

    Slava Ukrainii



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    #72
    Bass Reeves
    Registered Users Posts: 18,159 ✭✭✭✭Bass Reeves


    Cuddlesworth wrote: »
    Not even sure that works, it would take till year 5 to see a profit, year 6 for substantial profit. Income tax could skew that much higher if it was retirement income for example. That's 5 years of assuming rents don't start decreasing(which would affect the higher price over the lower price).

    Risk due to tenants not paying can happen at any point along the rent scale.
    Also landlords who were caught significantly under market rates when the rent controls came in, usually income was not at the top of their mind.

    You are failing to allow for other factors. It easier to keep nice properties rented. Properties that are in good condition take less maintenance time to LL. If costs are classed as maintenance/ Ber then they are tax deductible so tax issue is negated. It may also allow make the house more marketable 8-10 years down the line if you intended to cash in the property or if you intended to use it for family use

    Slava Ukrainii



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    #73
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Bass Reeves wrote: »
    You can no longer get teak windows. So you cannot replace like for like. It's impossible to replace like for like as technology changes. Upgrades can be listed as maintenance. The reason most Landlords do not reinvest in properties is often the return is greater to buy another property.

    There are work arounds. At present until December '21 provided premises is vacant for 12 months expenses in revamping it are allowable. As well if you bring the BER up by 7 units below D, 5 units at D and 3 units at C, you are allowed to rise rent in an RPZ. Finally if rental is vacant for longer than 24 months RPZ rates can be reset.

    You're adding a load of caveats (most of which people here are familiar with).

    In the event of a like-for-like product not being available- the next closest approximation is expected to be used. You can't use the fact of non-availability of teak windows to rebuild an alcove (though some people have tried).

    Upgrades are specifically not allowed as maintenance- and if you're audited, you're going to get a short sharp shock (I've a colleague who thought it would be opportune to upgrade a bathroom which was knackered after 10 years letting to Galway City Council- but got clobbered with Revenue penalties for her trouble, when she was audited). You might get lucky, and not be audited- if you are audited, you will not get away with it.

    There always were vacant premises and substantial change work arounds- but talk is of closing off those loopholes (or at very least, penalising landlords whose properties are vacant for whatever reason, for protracted periods of time- aka they will have to make every reasonable effort to retenant them, or they'll end up with penalties (such as enhanced property tax) on them.

    The substantial change clause is an interesting one- and there are at least 4 different cases against the definition ongoing (one of which was carried over from last year).

    Anyhow- the short and simple fact of the matter is- the regulatory and tax regime for landlords is onerous and not commensurate to the amount of work a good landlord must invest in his/her property(ies) should they wish to maintain the properties and the tenancies therein. The pendulum has swung significantly in favour of tenants and away from landlords. Until such time as the regulatory regime is seen as more equitable towards both tenants and landlords (and there does have to be give and take on both sides)- landlords will continue to exit the sector.

    Even with the rollout of REITs and other large landlords in the state- and the enumeration of tenancies with the housing associations etc- the absolute number of tenancies is falling- in a consistent manner. Its complete manure that the RTB need to conduct a study of why this is happening- its plain as day.


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    #74
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Bass Reeves wrote: »
    You are failing to allow for other factors. It easier to keep nice properties rented. Properties that are in good condition take less maintenance time to LL. If costs are classed as maintenance/ Ber then they are tax deductible so tax issue is negated. It may also allow make the house more marketable 8-10 years down the line if you intended to cash in the property or if you intended to use it for family use

    The fact of the matter is- when there is a shortage of rental property- while it is nice to imagine that a landlord will maintain it to a high standard- they don't have to- because people will fight over it as-is.

    Lots of landlords have played a game claiming their upgrades were maintenance- many of them have gotten away with it- some, have not. You shouldn't play chicken with the Revenue Commissioners- its not going to end well.........


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    #75
    Cuddlesworth
    Registered Users Posts: 13,980 ✭✭✭✭Cuddlesworth


    Bass Reeves wrote: »
    You are failing to allow for other factors. It easier to keep nice properties rented. Properties that are in good condition take less maintenance time to LL. If costs are classed as maintenance/ Ber then they are tax deductible so tax issue is negated. It may also allow make the house more marketable 8-10 years down the line if you intended to cash in the property or if you intended to use it for family use

    Not sure where you have been, the last 8 years its easy to keep any property rented. Rent supplement while last choice, has kept a pretty high bottom on the market across the country and provided a large number of potential tenants.

    I also don't know where you are going with properties in good condition. If you are talking about the very high end compared to the very low end(rent supplement), the repairs and maintenance cost a lot more in the high end and are about the same frequency. Also accountancy is not my strong point, but you have to be very careful about deductions. A repaired white-good/couch is a deduction, a new white-good/furniture is not. They are 8 year depreciating assets. Overall you are just spending more money to put it against tax, its not additional income.

    Lastly, the main difference between high end and low end is location. A shoebox in Donnybrook is high end compared to a 3 bed house in Darndale. The fit and finish make very little difference to the rents received in the Irish market. Which is why the majority of rentals have the cheapest furniture money can buy and usually have zero work done outside of the bare minimum.


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    #76
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Ray Palmer wrote: »
    ...

    You could show your maths and explain how somebody gets in the situation in the first place that would be great.

    Absent LL or inherit it.


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    #77
    brisan
    Registered Users Posts: 2,242 ✭✭✭brisan


    When the 3 months freeze on rent payments expire how many landlords are expecting to receive the full amount and how do they intend to collect it
    What happens if the tenant just leaves to rent somewhere else or in the case of a foreign national just goes home esp if they lose their job


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    #78
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    brisan wrote: »
    When the 3 months freeze on rent payments expire how many landlords are expecting to receive the full amount and how do they intend to collect it
    What happens if the tenant just leaves to rent somewhere else or in the case of a foreign national just goes home esp if they lose their job

    The landlord lodges an RTB case if the tenant doesn't pay the rent (and hasn't made alternate arrangements in agreement with the landlord. If the tenant ups sticks and moves- the landlord lodges an RTB case. If the tenant goes back to Bulgaria with no intention of returning here- the landlord lodges an RTB case.

    Failure of the tenant to answer an RTB case normally results in summary judgement in favour of the landlord. Depending on how vested the landlord is in chasing the tenant- they can pursue a case up to and including a court order to purloin the earnings or social welfare of an Irish tenant- or a legally enforceable court order valid anywhere in the EU.

    In short- if its a small sum of money- it probably isn't worth the landlord's effort to chase it, unless they are sufficiently vested in pursuing it. If its a larger sum- then almost certainly they will pursue it.

    REITs and institutional landlords have a policy of chasing absolutely everything (and billing the tenant for all costs incurred in chasing them).

    All in all- it is in a tenant's best interests to communicate as fully as possible with their landlord, and if they are experiencing difficulties (and who isn't) they should try to come to some sort of an arrangement- because regardless of circumstances, if a tenant owes rent, they owe rent- and if they are unable to pay their rent, they have no reasonable expectation to either stay in the property, or to vacate the property without clearing their debts.

    Communication is key- alongside reasonable and realistic expectations.


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    #79
    brisan
    Registered Users Posts: 2,242 ✭✭✭brisan


    The_Conductor wrote: »
    The landlord lodges an RTB case if the tenant doesn't pay the rent (and hasn't made alternate arrangements in agreement with the landlord. If the tenant ups sticks and moves- the landlord lodges an RTB case. If the tenant goes back to Bulgaria with no intention of returning here- the landlord lodges an RTB case.

    Failure of the tenant to answer an RTB case normally results in summary judgement in favour of the landlord. Depending on how vested the landlord is in chasing the tenant- they can pursue a case up to and including a court order to purloin the earnings or social welfare of an Irish tenant- or a legally enforceable court order valid anywhere in the EU.

    In short- if its a small sum of money- it probably isn't worth the landlord's effort to chase it, unless they are sufficiently vested in pursuing it. If its a larger sum- then almost certainly they will pursue it.

    REITs and institutional landlords have a policy of chasing absolutely everything (and billing the tenant for all costs incurred in chasing them).

    All in all- it is in a tenant's best interests to communicate as fully as possible with their landlord, and if they are experiencing difficulties (and who isn't) they should try to come to some sort of an arrangement- because regardless of circumstances, if a tenant owes rent, they owe rent- and if they are unable to pay their rent, they have no reasonable expectation to either stay in the property, or to vacate the property without clearing their debts.

    Communication is key- alongside reasonable and realistic expectations.

    I am not in that situation at either end ,I was just wondering if a tenant owes you 6000 euro for 3 months rent as they have been on Covid payments and are now back in work ,do you
    A look for all the money straight away
    B look for a weekly /monthly payment on top of the month rent
    I cant see anyone involved in this situation landlord or tenant coming out of it well


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    #80
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    I'd go for B- the tenant and landlord agree a timeframe for the tenant to clear their arrears.
    Its the same as arrears for any service- you agree a framework to clear your debt.
    Its not fair or reasonable to expect it to be cleared in a lumpsum upfront- very few folk have access to a couple of grand- most people are close to living from one paycheque to the next...........


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    #81
    Bass Reeves
    Registered Users Posts: 18,159 ✭✭✭✭Bass Reeves


    The_Conductor wrote: »
    I'd go for B- the tenant and landlord agree a timeframe for the tenant to clear their arrears.
    Its the same as arrears for any service- you agree a framework to clear your debt.
    Its not fair or reasonable to expect it to be cleared in a lumpsum upfront- very few folk have access to a couple of grand- most people are close to living from one paycheque to the next...........

    Still it's rubbish that some tenant's have stopped all payments. I think a landlord would be much more likely to be accommodating than where a tenant stopped all payments as has happened in some cases

    Slava Ukrainii



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    #82
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Cuddlesworth wrote: »
    .... The fit and finish make very little difference to the rents received in the Irish market. Which is why the majority of rentals have the cheapest furniture money can buy and usually have zero work done outside of the bare minimum.

    I think there are good reasons to go above the minimum. But that's a difference discussion.

    One reason people put basic furniture in is because it gets destroyed by some renter's.


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    #83
    brisan
    Registered Users Posts: 2,242 ✭✭✭brisan


    The_Conductor wrote: »
    I'd love to know what the story is with the circa 30% of Airbnb lets on the Irish market, being available but vacant in July/Aug 2019...........
    Something just doesn't make sense.
    A lot could be rented off the books


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    #84
    Dav010
    Registered Users Posts: 14,004 ✭✭✭✭Dav010


    brisan wrote: »
    A lot could be rented off the books

    Many advertise on booking.com, ownersdirect and Facebook as well as Airbnb.


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    #85
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Dav010 wrote: »
    Many advertise on booking.com, ownersdirect and Facebook as well as Airbnb.

    I've had a look at all of these- for Galway city for 14 random 2 day period breaks both midweek and weekends (incl. one bank holiday weekend) for Galway City- between now and the end of the year- and it still doesn't add up.

    Its a similar story across the board on different platforms- availability across the board, but vacancies- even for bank holiday weekends.

    Also some weird shenanigans on airbnb and booking.com where local B&Bs and even the likes of Jurys- have expanded their advertised offerings so they also feature as 1,2 or 3 bed apartments when you search- so the apparent number of 1-2-3 bed apartments on the platforms are artificially boosted (to quite ridiculous levels) by large hotels (3 in Galway city for example) which artificially suggest there are 400 additional self-occupancy units (on airbnb for example) that quite simply do not exist.

    I hadn't copped that hotels were pulling stunts like this- to feature in availability rankings for apartments- but it completely and utterly undermines anyone who is relying on stats from airbnb to suggest that there are 'X' number of units that will miraculously appear on the long term rental market as a result of the effective banning of airbnb..............


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    #86
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    Dav010 wrote: »
    Many advertise on booking.com, ownersdirect and Facebook as well as Airbnb.


    oh there are lots and lots of other places to get holiday lets.
    I wont mention any here but you probably know some of them.
    I use them when looking for holiday lets abroad now in cities which have banned airbnb. And I saw a lot of irish ex airbnbs come up on them before covid killed tourism.


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    #87
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    The_Conductor wrote: »
    I hadn't copped that hotels were pulling stunts like this- to feature in availability rankings for apartments- but it completely and utterly undermines anyone who is relying on stats from airbnb to suggest that there are 'X' number of units that will miraculously appear on the long term rental market as a result of the effective banning of airbnb..............


    I find that really annoying. Its been going on for a few years now.
    Last year I was trying to get an airbnb in London and it was nothing but hotels. I actually contacted airbnb and asked would they put a filter so that you could filter out hotels.


    The opposite has happened to me too. I booked a hotel in London. Arrived at reception and was given a map and a key and told to walk around the block 500M away. It wasnt in the hotel at all but an apartment in a residential apartment block 5 minutes walk away.


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    #88
    Dav010
    Registered Users Posts: 14,004 ✭✭✭✭Dav010


    Dear God I thought if Carlsberg did Airbnb, this would be it, turns out it’s not as good as I thought.

    https://www.irishpost.com/news/an-entire-irish-pub-is-available-for-rent-on-airbnb-189562


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    #89
    redarmyblues
    Registered Users Posts: 972 ✭✭✭redarmyblues


    Edgware wrote: »
    An empty apartment makes no money

    With the rules in place at the moment a let apartment may make no rent either.


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    #90
    snowcat
    Registered Users Posts: 1,160 ✭✭✭snowcat


    redarmyblues wrote: »
    With the rules in place at the moment a let apartment may make no rent either.

    You would want to be stone cold bonkers to rent an apartment out on a standard lease at the moment.


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    #91
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    snowcat wrote: »
    You would want to be stone cold bonkers to rent an apartment out on a standard lease at the moment.

    There is no such thing as a 'lease' from a tenant's perspective-as their rights are defined under the Residential Tenancies Act- and a lease may not detract in any manner from their rights under the Act. Accordingly- a lease is completely and utterly meaningless.


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