Key Post How risky is property investment?

[NoRegretsCoyote]

It's interesting to see the arc of this thread over 16 years.

Back in the early 2000s investors were basically accepting poor yields in the expectation of capital appreciation. This worked for some, but only if your timing was perfect.

Now, it is quite different. No one builds capital appreciation into their business plans, they just look at gross and net yield (this is the way it should be).

I have two views on property:
1) it is risky. Prices can fall and tenants can go sour. On the other hand, you can get double-digit gross yields on certain types of residential property in Ireland. This compensates for the risk to a large extent.
2) you have to be prepared to put in the work of vetting tenants and micro-managing properties but, if you do, the expected return is good.

 

[Bronte]

NON PAYMENT OF RENT

Couple given two weeks to pay €40k in rent arrears

A judge has told a couple they have two weeks in which to pay almost €40,000 in rent arrears, after a court heard the money is currently in a Swiss bank account.

www.irishexaminer.com

- no rent paid in 19 months
- €40,000 in arrears
- tenants still in property
- RTB involved
- district court
- nonsense about difficulties getting money transferred from Switzerland accepted by judge
- RTB order for possession and payment of arrears ignored, so that was a massive waste of time for the landlord, as we all know
- second time in court, previously said money on way ...
- next time judge says he’ll make the possession order, anyone hazard a guess on what the judge will do when the tenant says he can’t find alternative accommodation....

 

[Andrew365]

NON PAYMENT OF RENT

Couple given two weeks to pay €40k in rent arrears

A judge has told a couple they have two weeks in which to pay almost €40,000 in rent arrears, after a court heard the money is currently in a Swiss bank account.

www.irishexaminer.com

- no rent paid in 19 months
- €40,000 in arrears
- tenants still in property
- RTB involved
- district court
- nonsense about difficulties getting money transferred from Switzerland accepted by judge
- RTB order for possession and payment of arrears ignored, so that was a massive waste of time for the landlord, as we all know
- second time in court, previously said money on way ...
- next time judge says he’ll make the possession order, anyone hazard a guess on what the judge will do when the tenant says he can’t find alternative accommodation....

“It is a matter of days away,” he said. “The funds are in a Swiss account.” Ms O’Driscoll said her client believed Mr Carr was genuine but Mr Reynolds had been waiting a considerable time for payment,

I have a feeling no such account exists.....

 

[Sarenco]

Really scary tale of woe on Joe Duffy this afternoon.

2 years to evict a defaulting tenant from an apartment - everything by the book. €20k in legal fees, €22k in rent arrears, apartment completely destroyed.

Defaulting tenant clearly playing the system - missed multiple RTB hearings, appealed every RTB determination, dragged matters out in the Court and ultimately had to be physically removed from the property by the Sheriff (with Gardai present).

Landlord has now unsurprisingly left the residential letting business - another rental property lost to the market.

 

[cremeegg]

Really scary tale of woe on Joe Duffy this afternoon.

2 years to evict a defaulting tenant from an apartment - everything by the book. €20k in legal fees, €22k in rent arrears, apartment completely destroyed.

Defaulting tenant clearly playing the system - missed multiple RTB hearings, appealed every RTB determination, dragged matters out in the Court and ultimately had to be physically removed from the property by the Sheriff (with Gardai present).

Landlord has now unsurprisingly left the residential letting business - another rental property lost to the market.

Thats what you get if you play by the book. The consequences for the landlord would probably have been less if s/he had changed the locks.

Also I dont think you are entitled to the frown Sarenco, you are always advocating that landlords should observe the correct procedures, might be more appropriate.

 

[Firefly]

Really scary tale of woe on Joe Duffy this afternoon.

2 years to evict a defaulting tenant from an apartment - everything by the book. €20k in legal fees, €22k in rent arrears, apartment completely destroyed.

Defaulting tenant clearly playing the system - missed multiple RTB hearings, appealed every RTB determination, dragged matters out in the Court and ultimately had to be physically removed from the property by the Sheriff (with Gardai present).

Landlord has now unsurprisingly left the residential letting business - another rental property lost to the market.

Surely, the Gardai should be chasing these instances as crimes?

 

[Sarenco]

The consequences for the landlord would probably have been less if s/he had changed the locks.

Maybe.

Or maybe the RTB would have obtained an interlocutory order in the Circuit Court to reinstate the tenant and imposed an award of €20k against the landlord.

I certainly agree with you that the current system doesn't benefit anybody (and hence the "frown") but I generally don't think it's wise for people to take the law into their own hands. I'm kind of old fashioned like that…

 

[Bronte]

Surely, the Gardai should be chasing these instances as crimes?

Gardai will do nothing as it’s a civil matter. You will get no help from any state body as a landlord. You’re on your own. And because you’re a landlord, you’re the baddy.

 

[Bronte]

Maybe.

Or maybe the RTB would have obtained an interlocutory order in the Circuit Court to reinstate the tenant and imposed an award of €20k against the landlord.

I certainly agree with you that the current system doesn't benefit anybody (and hence the "frown") but I generally don't think it's wise for people to take the law into their own hands. I'm kind of old fashioned like that…

They have awarded up to 20k. It’s still worth that price as you have your property, you have the tenant out, and you’re not tearing your hair out for 2 years.

 

[Bronte]

RTB DETERMINATION ORDERS - legally binding.

- so it says on the RTB website. https://onestopshop.rtb.ie/dispute-resolution/
- truth is it’s a worthless order
- a worthless piece of paper
- and the RTB know it
- tenants know it
- so too do landlords

 

[Nicklesilver]

55% if your income is over 100k and you are self employed

 

[galway_blow_in]

Really scary tale of woe on Joe Duffy this afternoon.

2 years to evict a defaulting tenant from an apartment - everything by the book. €20k in legal fees, €22k in rent arrears, apartment completely destroyed.

Defaulting tenant clearly playing the system - missed multiple RTB hearings, appealed every RTB determination, dragged matters out in the Court and ultimately had to be physically removed from the property by the Sheriff (with Gardai present).

Landlord has now unsurprisingly left the residential letting business - another rental property lost to the market.

That landlord is worse than Hitler

I know this because the Irish media remind me all of the time

 

[galway_blow_in]

Four bedroom house going for auction three miles from where I live tomorrow, reserve is 110k, repossessed house and with only a two week closing window so cash only I imagine , might be one of the rare bargains left out there or perhaps no such thing exists any longer and it will double it's reserve, easily lettable for 1200 per month

I could afford to pay 140k in cash for it but probably won't even bid, a one bed apartment in one of the regional cities is still probably a better bet in the sub 150k market

Commuter belts likely to feel the pain of a future recession more than a city dwelling

I took a chance on a two bed town house in Limerick city eighteen months ago, cost me 83500 all in when duties, legal fees, repairs, appliances and furniture are added up, opted to go with a ten year lease to Limerick city Council, 850 per month, first payment arrived July of 2018 and I have not had to spend anything on the house since handing over possession, not sure I'd recommend someone do the same with a high value house however, I don't know who is living in the property, the local authority are my tenant

It's a gross yield of 12%, property tax is 100 and insurance circa 400, I envisage an average repair bill of a grand a year max as I'm only responsible for structural repair, if the washing machine breaks, the council deal with it, ditto a paint job

 

[Sarenco]

It’s still worth that price as you have your property, you have the tenant out, and you’re not tearing your hair out for 2 years.

Not necessarily Bronte.

The RTB could obtain a Court Order allowing the tenant to return to the property. Plenty of cases in the past where the RTB has done so.

 

[Andrew365]

Four bedroom house going for auction three miles from where I live tomorrow, reserve is 110k, repossessed house and with only a two week closing window so cash only I imagine , might be one of the rare bargains left out there or perhaps no such thing exists any longer and it will double it's reserve, easily lettable for 1200 per month

I could afford to pay 140k in cash for it but probably won't even bid, a one bed apartment in one of the regional cities is still probably a better bet in the sub 150k market

Commuter belts likely to feel the pain of a future recession more than a city dwelling

I took a chance on a two bed town house in Limerick city eighteen months ago, cost me 83500 all in when duties, legal fees, repairs, appliances and furniture are added up, opted to go with a ten year lease to Limerick city Council, 850 per month, first payment arrived July of 2018 and I have not had to spend anything on the house since handing over possession, not sure I'd recommend someone do the same with a high value house however, I don't know who is living in the property, the local authority are my tenant

It's a gross yield of 12%, property tax is 100 and insurance circa 400, I envisage an average repair bill of a grand a year max as I'm only responsible for structural repair, if the washing machine breaks, the council deal with it, ditto a paint job

Are the council paying the entire full rent or a portion? Any chance in normal business environment that the council would default on payment?

 

[galway_blow_in]

Are the council paying the entire full rent or a portion? Any chance in normal business environment that the council would default on payment?

Council are my tenant, this isn't the HAP or RAS scheme

I can't predict what the council might do, I have a contract with them however and the 850 per month is guaranteed until 2021, at which point, a rent review is due

 

[Laughahalla]

Council are my tenant, this isn't the HAP or RAS scheme

I can't predict what the council might do, I have a contract with them however and the 850 per month is guaranteed until 2021, at which point, a rent review is due

What Scheme is this ? Are you 100% sure that if the tenant becomes anti social that it doesn't fall back on you as the owner?

 

[galway_blow_in]

As stated above, you cannot set the rent at any time, including the initial setting of the rent under a tenancy
above market rent (which is defined in the legislation). See Section 19 of the Residential Tenancies Act 2004.

Hopefully we can now get back on topic...

Ludtrn

What Scheme is this ? Are you 100% sure that if the tenant becomes anti social that it doesn't fall back on you as the owner?

I am dead sure of it, the person living there is the councils tenant as they chose them, I'm taking a 20% below market rate but since I offered a very high reference rate, the 20% deduction was no great hit, council didn't argue

 

[galway_blow_in]

I didn't accuse a " person" of lying

I said the RTB lied, entirely different

 

[Bronte]

Not necessarily Bronte.

The RTB could obtain a Court Order allowing the tenant to return to the property. Plenty of cases in the past where the RTB has done so.

Could I have links to a couple of those. I’ve never heard of such a court order.