Landlords NOT selling up

[RonnieShinbal88]

We've had the cuckoo funds, next up are the cuckoo tenants. It's all about security of tenure, once you are in the place is yours.

 

[Mocame]

Interesting discussion from landlords, who seem to believe that government housing policy should prioritise their profit and their requirements.
But that's not supposed to be the government's policy. It is supposed to govern for the common good, rather than a, relatively, small, though vociferous priveleged minority.
Security of tenancy is a real game changer, in terms of quality of life, for many, many people. Especially, when starting a family, putting down roots in a community and trying to establish stable lifestyle. Irish law rarely reflects this crucial need, instead allowing tenants to be ditched out, at very short notice, on the whim of the private landlord.
Whether its Sinn Fein, or Fine Gael, this needs to change. Its grossly unfair.

I entirely understand why this arrangements would be attractive to tenants, the problem is that it isn't attractive to many landlords who bought properties to rent in the expectation that they would be able to sell when they wished to and now see this option withdrawn. This is a commercial service and landlords are under no obligation to provide it if the terms are not attractive to them. For many small landlords who are leaving the sector these terms clearly have become too unattractive and the supply of rented property is declining as a result.

 

[Leo]

It is supposed to govern for the common good, rather than a, relatively, small, though vociferous priveleged minority.

If higher rents and fewer rental properties are in the common good then they're certainly going about it in the right way. Let's face it, foisting the social housing supply to the private sector, and then continually meddling with the rules of engagement does absolutely nothing positive for the vast majority.

I don't think anyone could claim that small landlords are a vociferous group, quite the opposite in fact. Perhaps if they were more organised their side of this story might get some coverage in the media.

 

[Allpartied]

If higher rents and fewer rental properties are in the common good then they're certainly going about it in the right way. Let's face it, foisting the social housing supply to the private sector, and then continually meddling with the rules of engagement does absolutely nothing positive for the vast majority.

I don't think anyone could claim that small landlords are a vociferous group, quite the opposite in fact. Perhaps if they were more organised their side of this story might get some coverage in the media.

The government has , absoloutely, neglected its responsiblities in this area.

The idea that council housing is some sort of last chance safety net, delivered only to those at imminent threat of living in a cardboard box, has taken hold. It has become a firm belief since the disaster of Thatcher/Reagonomics which infested the UK and USA lead world. I'm afraid Ireland has weakly followed suit and passed housing off to the infallible market.

But well run, well funded, council estates were not dystopian nightmares, nor were they the redoubt of crminal gangs, or drug addled yobs.

In my experience, growing up on an inner city council estate, they were vibrant and supportive communities. Nurses, teachers, taxi drivers, factory workers, shop workers, plumbers, electricians, all living together in houses which offered secure tenancy, maintenance, repair and regular modernisation. Rents were fair, with support for those whose wages were low, or who were receiving social welfare.

That has disappeared, to some extent, and now those social groups find themselves cast into the private market.

I don't blame landlords for rinsing their tenants and charging 3k a month for some tip in Drumcondra. Its up to the govt to take control and start to roll back the rampant exploitation and reversion to Rackman times, which is all around us.

 

[Leo]

n my experience, growing up on an inner city council estate, they were vibrant and supportive communities. Nurses, teachers, taxi drivers, factory workers, shop workers, plumbers, electricians, all living together in houses which offered secure tenancy, maintenance, repair and regular modernisation. Rents were fair, with support for those whose wages were low, or who were receiving social welfare.

They were and they certainly server their communities well, giving the occupants the option to purchase as their circumstances improved, allowing them stay in the communities they were raised in. Rising costs of development and maintenance challenged that model but the real problems came when many in those communities decided they wouldn't pay their means tested rent. Evictions never happened, so why would you pay? Authorities couldn't sustain that and so schemes like HAP were introduced to shuffle the problem to the private rental sector.

I don't blame landlords for rinsing their tenants and charging 3k a month for some tip in Drumcondra. Its up to the govt to take control and start to roll back the rampant exploitation and reversion to Rackman times, which is all around us.

No, it should really be up to the government to deliver adequate social housing. The only thing the government taking more control of the private rental sector will do is increase rents, reduce supply, or most likely both. It was widely predicted that the RPZ regime would achieve just that, how could anyone think that further restrictions will reverse it?

Small landlords have traditionally delivered a diverse range of properties to the market here that the larger investment vehicles never will. Chasing them out of the game will be a disaster for people who want to live in a community rather than in high-density developments full of renters.

 

[DannyBoyD]

landlords for rinsing their tenants and charging 3k a month for some tip in Drumcondra

And here we go with the landlord bashing again.

 

[Allpartied]

They were and they certainly server their communities well, giving the occupants the option to purchase as their circumstances improved, allowing them stay in the communities they were raised in.

Actually, the sale of council houses was a disaster. The estate I grew up in was sold off in the 80's. Sure the tenants, at the time, did very well and they sold off for nice money, before moving somewhere else. But these days, my old family home is, virtually, the only one left as a council home.
All the rest are renovated, split up buy to lets. Rented for thousands per month, on 12 month contracts, to single workers crammed in 5 or 6 to a house. No-one I grew up with, lives anywhere near the estate. Houses are far too expensive to buy and far too expensive to rent.

Small landlords have traditionally delivered a diverse range of properties to the market here that the larger investment vehicles never will. Chasing them out of the game will be a disaster for people who want to live in a community rather than in high-density developments full of renters.

But if the landlords sell , then the houses will be bought by people who actually want to live in them.

 

[Leo]

Actually, the sale of council houses was a disaster.

Mainly because there was nothing to replace them. Mixed neighbourhoods have much better outcomes for children raised there than areas of concentrated social housing.

But if the landlords sell , then the houses will be bought by people who actually want to live in them.

Yes, exacerbating the problems of people who can't afford to buy. People starting families will be forced to move away from family supports, those whose marriages break down will likewise be forced to move away with significant disruption for any children. Will they all end up in high-density developments managed by an investment fund? Is that really what we think is best?

 

[DannyBoyD]

Rented for thousands per month, on 12 month contracts....crammed in 5 or 6 to a house.

Again you clearly know little about the legislation in regards to tenancies; nor the RTB requirements for registration of tenants.

A family of 6 in a 3 bedroom house would hardly be considered over crowding.

 

[Knuttell]

Can we keep this on topic.

 

[Cameo]

i am in the process of selling one (although there are a few wrinkles to iron out for sale to proceed) but planning to retain two others; am humming and hawing whether I buy a cheaper BTL with the proceeds of the one I’m selling, feels some tax breaks should be forthcoming if lifetime tenancy brought in but its politically very difficult to be seen to favour landlords

I’d have probably kept the one i have (despite being under enter by 10% to 15%) if there was a decent tax break in the budget

rationale for investment is something to generate a retirement income and to a lessor extent, something to leave to the kids

 

[lff12]

I’d have thought those on HAP are most exposed to job losses in hospitality etc, and once the HAP tenant cannot pay the Council stop too. What’s your thinking on it?

Given the nature of HAP, it would be difficult to qualify except in limited circumstances if you work, so most HAP tenants are unlikely to have paid work.

 

[lff12]

Not a landlord myself, but those I know of not selling are happy with current yields and long term capital appreciation. One cannot sell because there are issues with the PP on the property that make it almost impossible to get full value for on market. Those who I know of who have sold in past year did so because of a mix of low "legacy" rents and feeling that capital appreciation was good for them. I do know of one who did put a rental on the market but after failing to sell has withdrawn it from the market for now and put back on rental market for the moment.

 

[Always Learning]

I'm relatively new to the landlord game. I have 7 properties currently with sale agreed on 2 more bringing it to nine. I spent a lot of time recently wondering whether I should get into the property game, I even came here for some advice at the start of the year. I'm 36, I done quite well out of the sale of a family business recently which gave me the ability to be able to purchase these properties without any borrowings. I realise that I'm very fortunate and not everyone is in that position.

I've been over it in my head a hundred times, but to me, there's no other investment out there that can get me that kind of ROI. At the moment my average ROI is 11%. After I set aside a little into a fund for annual expenses it's still 9.3%. I vet the tenants myself and build a relationship with them before allowing them in. The purpose of investing in property is to create a passive (as passive as possible) revenue stream that I will use as a salary so I don't need a 09:00 - 17:00. With that in mind, I don't intend to sell the house, so I'm not too worried about the market crashing or potentially unfriendly laws. I also don't care if a tenant has a right to the property for life, in fact, the longer the tenant stays the better. As long as they are paying the bills and keeping the place tidy, I want them to stay forever. I generally won't buy in a RPZ so that's not an issue for me. I advise all my tenants before moving in, I'm not a hands on landlord, if something breaks in the place I expect the tenant to call the repair man and have it fixed, then they can subtract it from the monthly rent. This approach has worked for me so far.

I would estimate that with 9 properties, I spend on average an hour or two a week dedicated to landlord responsibilities. All the while, I have a steady revenue stream and assets that are appreciating in value. For the moment anyway, but if they fall it doesn't bother me as I don't plan to sell and they will eventually come back around and continue to increase, as they always have throughout history.

So that's why I'm staying in and not selling. ROI of over 10% along with a good asset behind it. I'm also diversifying my investments between stocks and buying equity in a business.

 

[Silversurfer]

I'm relatively new to the landlord game. I have 7 properties currently with sale agreed on 2 more bringing it to nine. I spent a lot of time recently wondering whether I should get into the property game, I even came here for some advice at the start of the year. I'm 36, I done quite well out of the sale of a family business recently which gave me the ability to be able to purchase these properties without any borrowings. I realise that I'm very fortunate and not everyone is in that position.

I've been over it in my head a hundred times, but to me, there's no other investment out there that can get me that kind of ROI. At the moment my average ROI is 11%. After I set aside a little into a fund for annual expenses it's still 9.3%. I vet the tenants myself and build a relationship with them before allowing them in. The purpose of investing in property is to create a passive (as passive as possible) revenue stream that I will use as a salary so I don't need a 09:00 - 17:00. With that in mind, I don't intend to sell the house, so I'm not too worried about the market crashing or potentially unfriendly laws. I also don't care if a tenant has a right to the property for life, in fact, the longer the tenant stays the better. As long as they are paying the bills and keeping the place tidy, I want them to stay forever. I generally won't buy in a RPZ so that's not an issue for me. I advise all my tenants before moving in, I'm not a hands on landlord, if something breaks in the place I expect the tenant to call the repair man and have it fixed, then they can subtract it from the monthly rent. This approach has worked for me so far.

I would estimate that with 9 properties, I spend on average an hour or two a week dedicated to landlord responsibilities. All the while, I have a steady revenue stream and assets that are appreciating in value. For the moment anyway, but if they fall it doesn't bother me as I don't plan to sell and they will eventually come back around and continue to increase, as they always have throughout history.

So that's why I'm staying in and not selling. ROI of over 10% along with a good asset behind it. I'm also diversifying my investments between stocks and buying equity in a business.

Congratulations on your current good fortune. However does history repeat itself?

A short history of renting in Ireland

From 19th-century tenements to the crisis of 2015 – 200 years of landlord v tenant

www.irishtimes.com

 

[Always Learning]

Congratulations on your current good fortune. However does history repeat itself?

A short history of renting in Ireland

From 19th-century tenements to the crisis of 2015 – 200 years of landlord v tenant

www.irishtimes.com

Sorry but that has gone over my head, I read the article but I'm unsure of the point your making. Don't take that as confrontational, I have just genuinely missed what your implying there.

 

[NoRegretsCoyote]

I've been over it in my head a hundred times, but to me, there's no other investment out there that can get me that kind of ROI. At the moment my average ROI is 11%.

Double-digit yields are out there mainly in apartments outside core urban areas. I think that's a good risk-adjusted return. The fact that this is not your sole income means your average tax bill on rental income will be less than 52%. For a lot of people with a day job the average tax rate on their rental income is their marginal person tax rate which just makes the whole thing less attractive.

@Always Learning - did you ever consider BTL finance on some of portfolio? You could increase your gross rents with a large portfolio and reduce tax bill.

I would estimate that with 9 properties, I spend on average an hour or two a week dedicated to landlord responsibilities.

I think long-run that is a bit optimistic. A landlord often has to do nothing for months at a time but refurbishment has to happen eventually. Re-letting a property always involves work as well and this can suck up time.

On average I think you will do more work than this with nine properties, but it's still not a bad lifestyle. Good luck with it!

 

[Silversurfer]

Sorry but that has gone over my head, I read the article but I'm unsure of the point your making. Don't take that as confrontational, I have just genuinely missed what your implying there.

Hi, My point is that historically it was not always profitable to be a landlord and the rules have changed many times through the years.

Sorry but that has gone over my head, I read the article but I'm unsure of the point your making. Don't take that as confrontational, I have just genuinely missed what your implying there.

Hi, The point is nothing remains static. The return you are currently getting will not be the same in ten years time or has had happened previously from 1918 - 1960. These laws were only challenged in 1980. Tenants were able to transfer the property to their children at the same rates. It was a lifetime for some landlords.

 

[Always Learning]

Double-digit yields are out there mainly in apartments outside core urban areas. I think that's a good risk-adjusted return. The fact that this is not your sole income means your average tax bill on rental income will be less than 52%. For a lot of people with a day job the average tax rate on their rental income is their marginal person tax rate which just makes the whole thing less attractive.

@Always Learning - did you ever consider BTL finance on some of portfolio? You could increase your gross rents with a large portfolio and reduce tax bill.


I think long-run that is a bit optimistic. A landlord often has to do nothing for months at a time but refurbishment has to happen eventually. Re-letting a property always involves work as well and this can suck up time.

On average I think you will do more work than this with nine properties, but it's still not a bad lifestyle. Good luck with it!

Hi NoRegrets,
Thanks for the insights. My properties are all town houses around Waterford, I go for anything between 140 - 175K which will give me between 10.5 and 9.5 ROI (before expenses). I steer clear of apartments all together, the management fees take all the good out of them. This is my sole income at the moment and it is above the threshold so I am on the higher tax rate.

I did consider BTL. So the theory behind than would be to leverage the fund I have in order to be able to buy more property and then allow the rental income to pay off the mortgages, if I understand it correctly? So say turn 2M into 3M and then in the long run I have more property once the debts are paid off? I decided against it, firstly because I'm kind of adverse to risk after seeing what happen my father during the 2008 crash. He was quite wealthy but ended up losing it all and almost the family home which the bank had a lean on. So that shaped my outlook on business strategy in life. But the second reason is that along with the fact I like to be debt free, if I buy the property for cash and therefore all the rental income is coming straight to me and not paying off a mortgage, then I will earn back the money required to buy another property a lot faster anyway. So I end up in the same position either way. As the name suggests though, I'm always learning so if I missed something there, please inform me.

Finally, on your point about time spent working on landlord related activity, yes, I do expect that will rise in the coming years, but not by all that much when it's averaged out. Of course some periods will be busier than others, but others will be very quiet. In addition the vast majority can be done over the phone and online.

 

[Always Learning]

Hi, My point is that historically it was not always profitable to be a landlord and the rules have changed many times through the years.

Hi, The point is nothing remains static. The return you are currently getting will not be the same in ten years time or has had happened previously from 1918 - 1960. These laws were only challenged in 1980. Tenants were able to transfer the property to their children at the same rates. It was a lifetime for some landlords.

Thanks for the clarity. On that point, my answer is, I don't know! No-one does I suppose so in that case I think you need to make hay while the sun shines and be as responsible with your investments as you can be. I'm in a very fortunate position of not having any debt, so even in the worst case scenarios I am pretty insulated and think I can make a good living. Fingers crossed!