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6000 landlords a year existing the rental market

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    #32
    Cuddlesworth
    Registered Users Posts: 13,980 ✭✭✭✭Cuddlesworth


    Ha, I knew they would have to drop the stats at some point, this is what they are basing their article on.

    https://onestopshop.rtb.ie/research/rtb-registration-statistics/

    From 2017 up to the end of 2018 they published quarterly statistics and then they just stopped. And to be blunt, these are just totals so it takes seconds to complete. So stopping the publishing would have had to be deliberate and that really pisses me off. It was obvious landlords were leaving in droves and they were obfuscating the information. Who is responsible for that?

    Its even worse when you look at the figures.

    In 2019 private registrations dropped by 7k, but the overall numbers are being propped up by the housing agencies. And to be blunt, they can't even start stemming the flood from the market. We built what, circa 25k homes last year? Assuming a 50% ownership to rental market, shouldn't rental housing have increased by around 12k during the year?

    Why drop the "number of new tenancies registered" stat, is it because the rental market has stagnated to the bare minimum of people moving?

    Saying its properties coming out of negative equity might be correct but the reduction of circa 4k in number of landlords compared to 7k tenancies implies that a lot of multi-unit owners are selling up. Those are people who wanted to be landlords.


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    #33
    Bass Reeves
    Registered Users Posts: 18,150 ✭✭✭✭Bass Reeves


    beauf wrote: »
    There isn't the political will to do that.

    We have examples of models from other countries that work we could copy. We decided not to learn from those countries and instead create an historic housing crisis.

    5-7 years ago when REIT's first started to become involved in the Irish market, we were all told it would end the smaller landlord. I preficoat the time that REIT's could not compete and thereetents would be higher than smaller landlords.

    Last Christmas a tenant left my house in a bit of a shambles, I needed it painted as we'll as needing a few other jobs done. I contacted s painter who wanted 1300 euro to paint it. In the end I got a local lad to give me a hand and we spend four days at the painting and doing the other few jobs,I spend 10-12 hours cleaning it and removing rubbish. Total cost were about 500 euro and a plumber cost me 50 euro more.

    If a REIT had to do the same it would cost up on 2k. You now see why they stay well away from the lower end of the market. You need a 10%+ return to cover costs and risk. A 250k house needs an annual minimum rent of 25k for such an investment. A REIT might need 1-2%more

    Slava Ukrainii



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    #34
    DubCount
    Registered Users Posts: 1,065 ✭✭✭DubCount


    pc7 wrote: »
    If colleges start going online or just one day on campus you won’t have the usual clamor come September either. People working remotely too, could see a big change, time will tell.

    Many colleges may be doing online classes in September 2020, but come 2021, students will be back in live lectures again. This is only a temporary help, and when students return, the impact will go away.


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    #35
    pc7
    Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,982 Mod ✭✭✭✭pc7


    DubCount wrote: »
    Many colleges may be doing online classes in September 2020, but come 2021, students will be back in live lectures again. This is only a temporary help, and when students return, the impact will go away.

    I’m not fully convinced yet, if they can fit 200 students on a course in campus or 1000 remotely, it’ll be worth it to stay and build remote courses properly where they can (certain subjects obviously will need to be hands on). Especially if foreign students choose not to travel for PG courses, these are money spinners for the Uni’s. Either way interesting to see how it’ll play out. The work from home could have a bigger impact. Smaller towns cold be regenerated if people can work from home, I think most businesses who are now will keep at it. Saves costs on office space, more appealing for staff as reduces costs on rent, commute, quality of life etc. we shall see!


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    #36
    Dav010
    Registered Users Posts: 14,001 ✭✭✭✭Dav010


    Edgware wrote: »
    I look after a few places for friends in D6 (Not an agent) but go back to late 2019 after the colleges have started and you would do well to go into 15 to 20 max. Rents would have been between 1350 to 1800 depending on condition/location.
    Some of the properties now are obvious former Airbnbs. Just check the bathroom photos of towels and soaps left for visitor use. There will be no tourists, weekenders from the country up for matches or concerts. Certainly rents can be negotiated. An empty apartment makes no money

    The daft report released 2 weeks ago put the numbers of properties returning to the rental sector from short let at the equivalent of 3 days normal supply. That is not going to significantly effect rental prices. Their report put the main driver for reductions in rentals down to lack of movement during lockdown and people leaving properties to go home as colleges/businesses closed. The real effect on rental prices will be more accurately measured at the end of 2020 when businesses/colleges open and people are free to go about their business.


    Getting back to the topic of the thread, something is very wrong when small investors are leaving the market even though rent was at historic highs. That should not be happening as there was no way that supply would catch up with demand during that period. There was no impending crash in the property market that would have led owners to panic and sell their property. It seems that no matter how good the rent was, renting to tenants did not appeal to thousands of property owners at a time when it should have appealed most.


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    #37
    Edgware
    Registered Users Posts: 5,875 ✭✭✭Edgware


    Under normal circumstances we would have peaks and valleys in demand.
    Late August to early October students are back, teachers/lecturers are back, newly qualified doctors might be changing hospitals etc. The usual changes then throughout the year with people taking up jobs etc. We cant be sure that it will go that way for the near future.
    The law of supply and demand will come into play. If a potential tenant has a choice its only natural that they will try and bargain a landlord down. Have the property empty a month because you cant get the rent you were getting last year isnt a good idea.


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    #38
    Dav010
    Registered Users Posts: 14,001 ✭✭✭✭Dav010


    Edgware wrote: »
    Under normal circumstances we would have peaks and valleys in demand.
    Late August to early October students are back, teachers/lecturers are back, newly qualified doctors might be changing hospitals etc. The usual changes then throughout the year with people taking up jobs etc. We cant be sure that it will go that way for the near future.
    The law of supply and demand will come into play. If a potential tenant has a choice its only natural that they will try and bargain a landlord down. Have the property empty a month because you cant get the rent you were getting last year isnt a good idea.

    That depends. If you lower rent then it is locked going forward in a RPZ, only rising by 4% yearly from this lower level. If demand picks up when colleges/businesses open again, then, given the lack of supply and likelihood that new builds are now months behind, there is a reasonable chance that a LL will gain on the lower rent offered now as yearly increases will be from he higher level going forward. Also, we have to see if the lower rents now are just short term lets (<6 months) until the short let market restarts.


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    #39
    Edgware
    Registered Users Posts: 5,875 ✭✭✭Edgware


    Dav010 wrote: »
    That depends. If you lower rent then it is locked going forward in a RPZ, only rising by 4% yearly from this lower level. If demand picks up when colleges/businesses open again, then, given the lack of supply and likelihood that new builds are now months behind, there is a reasonable chance that a LL will gain on the lower rent offered now as yearly increases will be from he higher level going forward. Also, we have to see if the lower rents now are just short term lets (<6 months) until the short let market restarts.
    I accept your point about RPZ and a share of decent landlords who looked after good tenants lost out when rents started rising. But leaving a place empty makes no income. Its the nature of business


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    #40
    overkill602
    Registered Users Posts: 267 ✭✭overkill602


    5 r 6 years before my acc expressed caution towards the market his clients where scaling back for tax reasons now the most punitive in europe thats before the risk was added by new regs and vilification.
    I know we all pay taxes average 2 or more unit puts you in 40% tax rate given very high compliance that a lot of revenue this excludes reit who can use a loop hole.
    Those who can stay in the market would need to be loan free which means new entrants can only be the well resourced.


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    #41
    Bass Reeves
    Registered Users Posts: 18,150 ✭✭✭✭Bass Reeves


    Edgware wrote: »
    I accept your point about RPZ and a share of decent landlords who looked after good tenants lost out when rents started rising. But leaving a place empty makes no income. Its the nature of business

    If a landlord has multiple units in much the same area in an RPZ he be as well off to let one empty as go chasing rentals down . Yes LL with single units will be under pressure to re-let but multiple unit owners can carry one in four or five rather than be giving 10-20% reductions. Reducing rent in a RPZ is a mugs game. A 20%drop might could take 5years to recover after rents stabilized

    Slava Ukrainii



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    #42
    overkill602
    Registered Users Posts: 267 ✭✭overkill602


    Edgware wrote: »
    I accept your point about RPZ and a share of decent landlords who looked after good tenants lost out when rents started rising. But leaving a place empty makes no income. Its the nature of business


    Tax @ 50% it no problem leaving a couple of places empty


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    #43
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    overkill602 wrote: »
    Tax @ 50% it no problem leaving a couple of places empty

    that would be an 'interesting' investment strategy :confused:


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    #44
    curious minds
    Registered Users Posts: 26 ✭curious minds


    the number of landlords exiting is close to the number of disputes on the RTB website - 14387 determination orders,
    even when determinations are in LLs favor .....they are really not because they lose money and time, never see the money they are owed etc

    also 78 HAP discrimination cases to the WRC ...where LLs are found to have discriminated 99% of the time and fined up to 15K


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    #45
    overkill602
    Registered Users Posts: 267 ✭✭overkill602


    Graham wrote: »
    that would be an 'interesting' investment strategy :confused:
    A hard left opinion no profit on rental income


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    #46
    sk8board
    Registered Users Posts: 3,183 ✭✭✭sk8board


    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.

    a small increase in One beds in D 6, at a moment in time when you can’t legitimately even do a showing, and the market has temporarily got a bunch of small Airbnb’s for perhaps the next 12 months.

    Yep, the market is in trouble alright.


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    #47
    sk8board
    Registered Users Posts: 3,183 ✭✭✭sk8board


    Cuddlesworth wrote: »
    Ha, I knew they would have to drop the stats at some point, this is what they are basing their article on.

    https://onestopshop.rtb.ie/research/rtb-registration-statistics/

    From 2017 up to the end of 2018 they published quarterly statistics and then they just stopped. And to be blunt, these are just totals so it takes seconds to complete. So stopping the publishing would have had to be deliberate and that really pisses me off. It was obvious landlords were leaving in droves and they were obfuscating the information. Who is responsible for that?

    Its even worse when you look at the figures.

    In 2019 private registrations dropped by 7k, but the overall numbers are being propped up by the housing agencies. And to be blunt, they can't even start stemming the flood from the market. We built what, circa 25k homes last year? Assuming a 50% ownership to rental market, shouldn't rental housing have increased by around 12k during the year?

    Why drop the "number of new tenancies registered" stat, is it because the rental market has stagnated to the bare minimum of people moving?

    Saying its properties coming out of negative equity might be correct but the reduction of circa 4k in number of landlords compared to 7k tenancies implies that a lot of multi-unit owners are selling up. Those are people who wanted to be landlords.


    I’ve been saying this for a few years - I don’t know why they obfuscate the headline number of registered landlords so much in their quarterly and annual reports (which I unfortunately read!).

    e.g in 2012 there was 213k registered LLs, but that year they also issued 43,000 letters to unregistered LLs, without saying how many of those subsequently registered.

    All past reports are here:
    https://onestopshop.rtb.ie/rtb-publications/

    I’d love to know how many of those 213k LLs are still in the market.

    All we know for sure is there were 213k registered LLs in 2012 and there are 169k at the end of 2019.
    It’s reasonable to assume that the 44k fall is actually closer to 70k (1/3) of the original 213k, with 25k new LL entrants post recession (myself included).


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    #48
    overkill602
    Registered Users Posts: 267 ✭✭overkill602


    Graham wrote: »
    that would be an 'interesting' investment strategy :confused:
    If your LL with a couple of units in an old pre63 building very popular in RPZs let 2 r 3 where the profit is taxed @20%; leave 1 r 2 empty because showing profit over 35k is taxed @40%
    This tax rate does not apply to reits the higher rate is a disincentive to multi units LL especially where they are mortgage free


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    #49
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    be as logical as asking your boss for a pay-cut to save on tax.


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    #50
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Graham wrote: »
    be as logical as asking your boss for a pay-cut to save on tax.

    People are fond on this forum of saying that a LL profit is mainly if not solely on the capital appreciation and acquisition of property, not the rent. Pointing out that a business needs cashflow to operate falls on deaf ears. But if it was true and the cost of renting exceeded the costs of renting, then it would make sense to leave it empty.

    I know a few who never wanted to be LLs and kept properties empty and eventually sold them when they wanted the money back.


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    #51
    Ray Palmer
    Registered Users Posts: 8,351 ✭✭✭Ray Palmer


    beauf wrote: »
    People are fond on this forum of saying that a LL profit is mainly if not solely on the capital appreciation and acquisition of property, not the rent. Pointing out that a business needs cashflow to operate falls on deaf ears. But if it was true and the cost of renting exceeded the costs of renting, then it would make sense to leave it empty.

    I know a few who never wanted to be LLs and kept properties empty and eventually sold them when they wanted the money back.

    The thing is the expenses exist if you are renting or not so what you are saying doesn't make sense. By not letting you lose more money.

    In very exceptional circumstances does it make sense. Where you would have multiple properties and one is rented well below market rates. Then leaving it empty to bump the rent up in two years of it not being let. Still very unlikely.

    You would still make more money letting it so what you are saying doesn't hold water.


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    #52
    overkill602
    Registered Users Posts: 267 ✭✭overkill602


    when you go above 35K the extra 20% does make a big difference my accountant has many LLs on his books they are keeping below the 35K also the sector has the highest compliance according to rev
    This is where the 55% come in it just not worth it even with allowable expenses and when your not allowed for time & admin


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    #53
    the_syco
    Registered Users Posts: 37,295 ✭✭✭✭the_syco


    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.
    It sounds like they're not only using AirBnB?
    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.
    Daft has been weird lately. Sometimes I click on a property, only to be told it no longer exists.


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    #54
    Lux23
    Registered Users Posts: 7,134 ✭✭✭Lux23


    the_syco wrote: »
    It sounds like they're not only using AirBnB?


    Daft has been weird lately. Sometimes I click on a property, only to be told it no longer exists.

    I have noticed that too, but I think its because they have upped or dropped the price.


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    #55
    Ray Palmer
    Registered Users Posts: 8,351 ✭✭✭Ray Palmer


    overkill602 wrote: »
    when you go above 35K the extra 20% does make a big difference my accountant has many LLs on his books they are keeping below the 35K also the sector has the highest compliance according to rev
    This is where the 55% come in it just not worth it even with allowable expenses and when your not allowed for time & admin
    That doesn't make any sense. Any extra money is more money even if you are taxed more above a limit. You don't suddenly get taxed more on your existing income when it increases.
    I don't think you understand tax or accounting


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    #56
    Bass Reeves
    Registered Users Posts: 18,150 ✭✭✭✭Bass Reeves


    Ray Palmer wrote: »
    That doesn't make any sense. Any extra money is more money even if you are taxed more above a limit. You don't suddenly get taxed more on your existing income when it increases.
    I don't think you understand tax or accounting

    It might seem not to. However if you have multiple units it may well pay to leave a unit empty for 6-12 months. If you are in an RPZ and you take a 20% drop in rent it will take 5+years to recover to original yield not to mind projected yield. As well if LL's with multiple units leave units empty or hold for there prices they prevent churn. This benefits the yield in other units.

    While single unit owners may be in a rush to relet the same pressure will not be.on multiple unit owners. As well this may be a time to revamp properties and increase there rental value. If we enter a slowdown building prices(although I cannot see building costs decline by much) it would be an opportunity to carry out upgrades

    Slava Ukrainii



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    #57
    the_syco
    Registered Users Posts: 37,295 ✭✭✭✭the_syco


    Bass Reeves wrote: »
    As well this may be a time to revamp properties and increase there rental value. If we enter a slowdown building prices(although I cannot see building costs decline by much) it would be an opportunity to carry out upgrades
    Unless the LL adds another room, I doubt a LL would qualify for more rent if they're in an RPZ. Also, the less rentals that there are, the less the LL will need to improve their accommodation.


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    #58
    Ray Palmer
    Registered Users Posts: 8,351 ✭✭✭Ray Palmer


    Bass Reeves wrote: »
    It might seem not to. However if you have multiple units it may well pay to leave a unit empty for 6-12 months. If you are in an RPZ and you take a 20% drop in rent it will take 5+years to recover to original yield not to mind projected yield. As well if LL's with multiple units leave units empty or hold for there prices they prevent churn. This benefits the yield in other units.

    While single unit owners may be in a rush to relet the same pressure will not be.on multiple unit owners. As well this may be a time to revamp properties and increase there rental value. If we enter a slowdown building prices(although I cannot see building costs decline by much) it would be an opportunity to carry out upgrades

    Show your maths to explain it because I think you are overestimating an extreme scenario. I also believe it is 2 years of not being let before you can rent it out again without RPZ impact.

    So rent is €1000 but could get €1200.

    So you don't want €24k income because you can get an extra €200 a month later. So to recover that money will take 10 years. Even if a year it is 5 years to recover the amount. They won't be up any amount but if the keep renting they can up the rent 4% each year. Which means more money in the end..

    You are talking to a person with multiple units who did the maths on their property and it makes no sense. You would have to be renting a place below 50% of the market rate. Easier just to upgrade the property and put it back on the market. It is easily done and costs a lot less than 24k


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    #59
    Bass Reeves
    Registered Users Posts: 18,150 ✭✭✭✭Bass Reeves


    the_syco wrote: »
    Unless the LL adds another room, I doubt a LL would qualify for more rent if they're in an RPZ. Also, the less rentals that there are, the less the LL will need to improve their accommodation.

    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

    Slava Ukrainii



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    #60
    Ray Palmer
    Registered Users Posts: 8,351 ✭✭✭Ray Palmer


    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.


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    #61
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Ray Palmer wrote: »
    Show your maths to explain it because I think you are overestimating an extreme scenario. I also believe it is 2 years of not being let before you can rent it out again without RPZ impact.

    So rent is €1000 but could get €1200.

    So you don't want €24k income because you can get an extra €200 a month later. So to recover that money will take 10 years. Even if a year it is 5 years to recover the amount. They won't be up any amount but if the keep renting they can up the rent 4% each year. Which means more money in the end..

    You are talking to a person with multiple units who did the maths on their property and it makes no sense. You would have to be renting a place below 50% of the market rate. Easier just to upgrade the property and put it back on the market. It is easily done and costs a lot less than 24k

    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.


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