Though I do know this is not correct.
Conor Brady has written a excellent novel, on the land Acts of the 1880s, which is I think what Jim is referring to above. The Eloquence of the Dead
How many landlords have quit because of rent controls?
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Though I do know this is not correct.
Conor Brady has written a excellent novel, on the land Acts of the 1880s, which is I think what Jim is referring to above. The Eloquence of the Dead
TheBigShort
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And....people who work tend to pay their bills. So legal action is restricted to the few idiots who cannot understand that refusal to pay rent will cost them more.
I have already stated that laws are strengthened for property managers where the tenant, who is capable of paying, refuses to pay.
But it's not, instead it's a money pit. Doesn't that suggest something?
Yes, that the State has been historically bad at managing its housing stock. That is why I am proposing that property managers manage the housing stock.
I dont know, it all depends on future inflation rates and the value of currency.
If rents are €150,000pa im guessing wages are a multiple of that.
The tenant. You are not paying attention.
The State builds a two bed house in Dublin 6 for €250k on land that it owns. This €250k is capital expenditure and goes onto national debt.
The State requests property managers to submit tenders to take control of the property for the purposes of letting out. There are some conditions (lets keep it as simple as possible, this is merely a concept)
1. As the State is in no hurry to redeem the €250k outlay, it spreads repayments on the national debt for 100yrs. It looks for a fee of €2,500pa from the property manager.
2. The property management must produce an initial outlay to furnish the property to a specific standard providing all mod cons - typical outlay, say, €10,000 with €1,000 extra a year.
3. The property manager must hold a contingency fund equivalent to 20% of the rent charged. This is to be used for necessary re-decoration, repairs, replacements. These costs can be written off against tax bill.
4. The property management sets a fixed rental fee, reviewable every two years with limited increases no more than prevailing inflation rate.
Five property managers submit tenders to the State to take control of the property for the purposes of letting out. All five meet the terms of the tender. The only difference between them is the final rent to be charged.
The property manager who offers the most competitive price of the rent wins the tender.
So how much?
€2,500 State fee
€10,000 initial outlay over 20yrs equates to €500 a year.
€1,000 additional
Im working it out at about €4,000pa or €333 a month.
To make it worthwhile, the property managers set their rental prices. One sets rent at €1,000pm, another €900pm, another €700pm, another €650pm another at €600pm.
The property manager who sets rent at €600pm wins the right to let the property.
Mr & Mrs low & middle income earners can now afford to rent a place of their own. Not only that, there is scope to save money for a house deposit should they wish to do so. Alternatively, they can stay where they are. They can start a family, go on holiday, buy health insurance.
A portion of any money not used by the property contingency fund to repair or replace fixtures and fittings goes toward reducing rent further. An incentive to look after the condition of the property is built in.
This is just a simple example, I expect there will be a thousand scenarios of what if's and but's.
The primary aim is to develop a concept that moves away from the system that exists today that drowns tenants with high rents and has landlords chasing maximum market prices.
RETIRED2017
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The only reason I used the land commission is to take a look at how it would work out if you went away from renting to an annuity system ,
If you look at the present set up most people who rent public sector housing finish up buying them at a knock down price after renting then for a number of years some buy then having paid very little in rent for about 30% of the costed price then you have to add all of the cost collecting rent and the upkeep of the houses ,
What I am saying is you might as well sell it to them from day one so they are responsible for it upkeep from day one
I am just pointing out if we used a system like the land commission and transfer ownership from day one we would avoid most of the pitfalls in the present system ,
I bet no one who has shot this suggestion down took the time to understand how the annuity system worked lets say we looked at the annuity system in 1970 you would see the full cost would be recovered,
Now look at a public sector house which was rented in the same year 1970 you will see it had an ongoing cost and was sold to the tenant at a huge write down,
So leave the land commission out of it and take a look at how an annuity system
operates ,
if you want to find an example have a look at the land commission as an example as a way of recovering full cost from people on low incomes with little or no default,
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RETIRED2017
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I think tom has forgotten the 2,4% taken from the pension pot by FF?FG?LAB, and given for the most part to the usual suspects,
You've totally lost me. Wouldn't it just be easier for me the landlord to buy a property let it out and have no state involvement. How is the property management company making money? Do they get the rent?
How much is the land costs for each property?
How does the state get it's money back?
And how is the property management company going to get 10K per property in the first place?
Do you not think that landlords like me are already excellent property managers?
Are they not also paying this on Airbnb income?
TheBigShort
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You mean just carry on as we are? Tenants drowning in rent payments and landlords getting out of the sector because they cant profit from maximum market prices?
Did you not read the post? The property management that takes control of the property charges €600pm rent on the tenant.
A cursory glance at 2 bed house or apartment in D6 today is €2,000+.
Zero, the state has either bought the land or already owned the land. The property management has no cost to bear other than a €2,500pa fee back to the State.
€2,500pa.
Its called capital requirement. If you don't have the money then you cant invest.
Im sure you are an excellent property manager, but not all are like you. And you miss the whole point. The proposed system offers a real alternative to property ownership for those who cannot afford to buy their own, or for others who it doesn't suit to buy a property.
Instead of paying a rent that is the equivalent, or greater than a mortgage, prospective tenants will have a real alternative to the private ownership market in a system where property managers are competing on offering the lowest rents.
T McGibney
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So not actually a property management company at all, but a price fixing authority.
Swimming in delusion.
TheBigShort
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What authority is fixing the price?
It is the property managers competing with one another to provide rental accommodation that is setting the price.
T McGibney
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not sure if anyone answered the OP question - I'm a full time LL and discussed the RTB report on another forum when it was released 2 months ago (the 2017 one, available on the RTB website):
The fall in landlords was masked in the 2016 RTB report by the addition of the Approved Housing Bodies to the RTB register (without saying it explicitly in the 2016 report how many AHB's there were - it turns out it was about 25-30k), but they appear to have addressed it this year, albeit a bit of a fudge:
There are 174k RTB registered landlords, a drop of 1k from 2016 - (page 2), and that represents a drop of 6k in tenancies/houses rented (319k to 313k) (page 2)
However, on page 4 they say "In 2017 we contacted 20,400 landlords who had not registered their tenancies after which the majority registered."
in other words, of the 175k LL's in 2016 - the numbers support that about 20-25k of them aren't there any more, replaced by cash LL's forced (correctly) into registering.
Roll that fwd into 2017, and we'll have to wait until next July to truly answer your question - but without a doubt it is still falling, and there won't be any notable AHB's to add into 2017 numbers, so it'll be more apparent.
I paid 62% of my rental income in tax in 2017 (just finished compiling the numbers).
52% was income tax - (40%), PRSI (4%), USC (up to 8%)
10% was insurance, mortgage interest, local property tax, maintenance fees, general maintenance costs, etc.
BIG NOTE to that 62%: thankfully I only have one small mortgage remaining and I only had 2 call-outs across 4 houses in the whole of 2017 (a faulty oven, and also some roof tiles dislodged by Storm Doris) - the lowest ever.
People who thing LL's are coining it aren't using a calculator, or haven't spoken to an accountant
Personally, I'm staying in for now - awaiting any potential changes in the tax code, or allowing the market to professionalise/set up companies etc.
Other investment asset classes seem expensive currently too - the money taken from selling up needs to go somewhere after all.
120k of the 174k LL's have just one property - there is zero (ZERO!) profit in having one rented property. Your rent is in the higher tax rate almost certainly, yet all your tenant-side risks lie in one basket.
The fall in landlords was masked in the 2016 RTB report by the addition of the Approved Housing Bodies to the RTB register (without saying it explicitly in the 2016 report how many AHB's there were - it turns out it was about 25-30k), but they appear to have addressed it this year, albeit a bit of a fudge:
There are 174k RTB registered landlords, a drop of 1k from 2016 - (page 2), and that represents a drop of 6k in tenancies/houses rented (319k to 313k) (page 2)
However, on page 4 they say "In 2017 we contacted 20,400 landlords who had not registered their tenancies after which the majority registered."
in other words, of the 175k LL's in 2016 - the numbers support that about 20-25k of them aren't there any more, replaced by cash LL's forced (correctly) into registering.
Roll that fwd into 2017, and we'll have to wait until next July to truly answer your question - but without a doubt it is still falling, and there won't be any notable AHB's to add into 2017 numbers, so it'll be more apparent.
I paid 62% of my rental income in tax in 2017 (just finished compiling the numbers).
52% was income tax - (40%), PRSI (4%), USC (up to 8%)
10% was insurance, mortgage interest, local property tax, maintenance fees, general maintenance costs, etc.
BIG NOTE to that 62%: thankfully I only have one small mortgage remaining and I only had 2 call-outs across 4 houses in the whole of 2017 (a faulty oven, and also some roof tiles dislodged by Storm Doris) - the lowest ever.
People who thing LL's are coining it aren't using a calculator, or haven't spoken to an accountant
Personally, I'm staying in for now - awaiting any potential changes in the tax code, or allowing the market to professionalise/set up companies etc.
Other investment asset classes seem expensive currently too - the money taken from selling up needs to go somewhere after all.
120k of the 174k LL's have just one property - there is zero (ZERO!) profit in having one rented property. Your rent is in the higher tax rate almost certainly, yet all your tenant-side risks lie in one basket.
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T McGibney
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Not sure of your 52% v 62%, but if you do the numbers based on your actual rental profit (including full mortgage interest and tax-disallowed travel, capital-element repairs and local property tax), the % will be higher still.
TheBigShort
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You have misinterpreted.
The State delivers the housing stock. It has poor track record of managing its housing stock thereafter.
It requests private property managers to submit tenders to take control of the property, to manage. It does so on competitive tender.
Whoever meets the requirements of the tender with the most competitive price wins the right to manage the property.
The State gets its return over the very long-term. Properties are managed by people who are committed to providing a good service, in return for a profit that they deem worth their while.
Bad 'landlords' who divide up houses into 11 apartments and charge extortionate rents are driven out of market. Prospective tenants now have a real alternative to the private ownership market which they cannot afford, or deem not suitable or desirable for their needs.
So I rent a property for 600 a month = 7200. I pay the government 2500 annually. Let's say in my lifetime 30 years. 75K.
The land the property is on is apparently 'free'. The government borrows millions or billions to get a house built for 250K.
I have to put in 10K of fixtures and fittings. I have to maintain the property.
Who in this scenario is the landlord? The property management company?
And do I pay full tax on the 7200 or on the 7200 less that 2500 annually? How would you tax this?
I guess I'd be taxed on the 4700 left after paying the government and after deducting repairs. And tenants in Dublin are now getting a property worth 2K in rent for 600 Euro.
You know what, heck I'll become a tenant in Dublin for that 600 Euro myself and do something else to make money.
Can you just imagine the nightmare of the state managing all of this. I nearly gave up on HAB myself and a lady in the payment office in Limerick had to beg me to stay in there as I was nearly at the end of the procedure. Now I've the rent coming in by standing order the tenant's are happy and I'm happy. Which reminds me I should put up the rents to keep the property value up to market value. And the tenant's won't care as the state will pay. I'm convinced that HAP has driven up rents. Because I have never got so much rent.
Correct, that 62% is one of my lowest from over 13 years of returns. I own 3 of the 4 places outright now, which makes a difference to profitability - and also I had very low maintenance costs in 2017 (€620 in total to be exact, for 2 callouts).
T McGibney
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It makes no sense neither in terms of common sense nor economics, and also reeks of the Soviet Union's idealistic year-zero mass housing schemes.
The very concept of 100-year borrowing is madness.
RETIRED2017
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If you are a landlord and have being following the news and reading the papers you would know well Airbnb is being tightened up ,
It is not of any use to landlords unless there property was located close to where airbnb is required ,Landlords know there is a limited market For Airbnb even in the right location,
I remember a big clamp down on unpaid tax a few years back,
Tax and the need to register how much income you are getting along with having to pay 2% of the 4% increase in tax the government is getting half of any increase in USC/prsi/Tax ,
I suspect it is not the rent controls which is driving then out it is seeing 50% of the upturn in the market going in tax usc prsi, + tighter controls on landlords and higher rents causing people renting to expect more for the landlord than in the past,
The real loony left government will need more as time goes by from the very people who keep them in power,
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TheBigShort
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???? Are you sure you are a landlord? Or even ought to be?
The State borrows billions to build thousands of housing units, not one!
I just used one unit as an example of how such a scheme could work.
You have to maintain the property to a particular standard. No different to what any good landlord is doing today - all mod cons etc.
Id thought you being an 'excellent' landlord would have a grasp of this?
The State is the property owner and has effectively sub-letted the property to the property manager. The property manager is the effective landlord.
Now you are getting it, except its not worth 2k, its worth €600pm.
2K is the extortionate figure being saddled on working peoples backs who are delaying starting families, cant afford their own home, as a consequence of landlords trying to make their investment pay by getting someone else to pay off their mortgage for them, provide them with profit and capitalise and any asset value appreciation.
All in return for a roof over their head, so that they can go to work and contribute far more in productivity than a landlord ever could.
But people are funny about things like that, like food, and shelter - they will often go to extreme measures like paying extortionate rents, begging, stealing in order to get one or both.
However, under this scheme, effectively taking out the mortgage as a factor, if someone is perpared to provide quality accommodation for €600pm (making a profit too!), then that is all it is worth.
Now you are getting it, choice, value for money. If its not worth your while, go do something else to make money.
There is nothing for the State to manage. All it has to do is build houses, which it already knows only too well how to do. The managing will be left to whoever wins the tender to control the property by meeting certain criteria and offering the most competitive rental price.
This stuff goes on all the time in various other sectors.
https://www.etenders.gov.ie/about_us_main_en-GB
Compared to the HAP nonsense you have highlighted
Seriously, this is simply leeching of the State. Parasitic I think is the word. Thats the whole point, you are getting so much rent - good for you. But it nothing to do with what you are providing been worth it. You are simply leeching on State funds that could be used to help others elsewhere.
There is nothing 'free-market' or competitive with what you are doing.
The sooner this type of landlord is squeezed out of the sector the better.
T McGibney
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Where did you get your figure of €600pm? What's wrong with €500pm? Or €400pm?
(Incidentally €600pm or €7,200pa would represent a 2.88% gross return on investment on a €250k property. Utterly insufficient to meet capital repayments, interest, management, maintenance etc, and as such, pie in the sky.)
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