I asked about your hypothetical scenario.That could differ from agreement to agreement
In the real world it doesn't. You're confusing socially desirable situation, with the real world.But taking a standard 12 month agreement (for the price of the rent, and not the occupancy) then any agreement should demonstrate that any increases thereafter are proportionate, sustainable and justified.
At the end of the agreement, the tenant just says they'll move out, unless rent is reduced. There is no guarantee of rent for the landlord.The tenant in the €1300 property would presumably like to see their rent reduced to €1150 too - but tough, €1300 is the price agreed so pay up.
If you had €150k spare and understanding Minister Murphys position tell me would you invest in Irish rental real estate stock and why.
Alistair, what are the main factors that have changed regarding your own portfolio that have now made the net returns so unattractive? Has taxation been the only reason or have there been other factors? Presumably the net returns were attractive up until recently so I'm just interested in what has caused this to change as clearly something in recent years has reduced your returns.Agreed Palerider.
I am a small landlord who has been active in the market for 20+ years. About 1.5 years ago, my accountant who performs my rental tax returns, advised me to think about the viability of my small portfolio of 6 BTLs and question if the net returns were there. It was immediately obvious that the net returns are no longer there. Additionally, there are significant overholding risks with no viable recourse for the small landlord. There is constant negative and unwarranted demonization of the small landlord in Ireland. No issue with regulation, however the more recent and ever increasing amendments to the Residential Tenancies Act have made this small industry unviable for small landlords in Ireland.
The social justice argument that is being espoused on this thread is aiming at the wrong target. BTL, regardless of one's individual circumstances whether they chose to invest in BTLs or found themselves in the position of accidental landlord is a business. Its not personal, its about providing a quality service for the best possible return. If the returns are no longer there, or the risk does not support the reward, then its time to exit the business.
I have since purchased 2 BTLs on the continent, and will continue to divest completely of BTLs in Ireland. Nothing personal, its business.
Agreed Palerider.
I am a small landlord who has been active in the market for 20+ years. About 1.5 years ago, my accountant who performs my rental tax returns, advised me to think about the viability of my small portfolio of 6 BTLs and question if the net returns were there. It was immediately obvious that the net returns are no longer there
I have since purchased 2 BTLs on the continent, and will continue to divest completely of BTLs in Ireland. Nothing personal, its business.
You're confusing socially desirable situation, with the real world.
Either base your arguments on fact & reality,
At the end of the agreement, the tenant just says they'll move out, unless rent is reduced. There is no guarantee of rent for the landlord.
Breaking what agreement?Yes, tenants breaking agreements are as bad as landlords breaking agreements
Breaking what agreement?
I said 'at the end of the agreement'. So there is no agreement being broken.
Where exactly did I say that?your own view that no such thing occurs in your world?
You're confusing socially desirable situation, with the real world.
You've used the word 'should'.
Either base your arguments on fact & reality,
Yeah, the imposition of PRSI to rental income a few years ago was probably the last straw for me....govt of the day introduced USC and PRSI on rental income even though as this is 'unearned' income whatever that means there are no benefits to paying this PRSI i.e. afaik doesn't count towards contributory pension, etc.
The Department of Finance published quite an interesting paper earlier this year on institutional investment in the housing market.
The paper included the following warning:
"Although as yet unproven, there is a risk that at sufficient scale an institutional investor or group of investors could, over time, develop monopolistic or oligopolistic pricing power. The highly dispersed nature of the Irish rental ownership structure to-date may have obviated such a development in the past. Theoretically, such price-setting power could be attained at a local level given certain market conditions and sufficient scale."
https://assets.gov.ie/6348/140219142846-5a166a1ec85f4237935fb5c21dd666cb.pdf
Well, it's just highlighting a risk.I'm not sure any institutional landlord is even at a tenth of this in any market.
But I can certainly think of certain areas of Dublin where a single institutional investor holds sufficient stock that monopolistic pricing power has got to be a real concern at a local level. The area around Heuston Station springs to mind.
Are you sure about that?Yeah but there are perfect substitutes five minutes walk away.
I believe this is already the case. As I mention at point g yesterday. And they treat human beings very much as a commodity. Yet we ordinary small time landlords are castigated constantly in the media. And by legislators.The Department of Finance published quite an interesting paper earlier this year on institutional investment in the housing market.
The paper included the following warning:
"Although as yet unproven, there is a risk that at sufficient scale an institutional investor or group of investors could, over time, develop monopolistic or oligopolistic pricing power. The highly dispersed nature of the Irish rental ownership structure to-date may have obviated such a development in the past. Theoretically, such price-setting power could be attained at a local level given certain market conditions and sufficient scale."
https://assets.gov.ie/6348/140219142846-5a166a1ec85f4237935fb5c21dd666cb.pdf