Minister Murphy actively pushing landlords out of the market in the face of the latest Daft report

Folsom said:
That could differ from agreement to agreement
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I asked about your hypothetical scenario.

Folsom said:
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.
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In the real world it doesn't. You're confusing socially desirable situation, with the real world.

You've used the word 'should'.

Either base your arguments on fact & reality, or I'll leave you in peace to get back to your pet unicorn.

In your scenario:
Folsom said:
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.
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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.
 
Palerider said:
If you had €150k spare and understanding Minister Murphys position tell me would you invest in Irish rental real estate stock and why.
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Not a chance. I think the market is dysfunctional and prices for property are distorted.
There are still swathes of empty units throughout the country, circa 200,000.
The biggest under occupancy rate is in the private owner-occupied sector with some 40% of properties there under occupied.

I heard the Minister talking this morning on PK. Communal living quarters are the way forward apparently for young professionals, who like to socialize but not ready to settle down. We are abandoning the 'starter home' to be replaced by the 'starter communal quarter' - a concept that has taken hold in London and New York (also in the midst of homeless crisis) but that originated in the Soviet bloc of Russia, Romania and Bulgaria.

Why cant people see, the profit motive is a good thing, but if driven too far it no longer innovates, it just turns to greed. Greed is what blew our economy apart in 2008 and we are still trying to patch things up.
 
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.
 
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
 
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.
 

Interesting, I agree and have the same strategy, I also purchased overseas, the first one in 2010 and have added since with the most recent one in April and I will do more, excellent experience.
 
RedOnion said:
You're confusing socially desirable situation, with the real world.

Either base your arguments on fact & reality,
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This is an attempt to create socially desirable situation. All from the real world too. Some facts and reality from the rtb.ie
https://onestopshop.rtb.ie/rent-pressure-zones/

"Rent Pressure Zones are located in parts of the country where rents are highest and rising, and where households have the greatest difficulty finding accommodation they can afford. They are intended to moderate the rise in rents in these areas and create a stable and sustainable rental market."


RedOnion said:
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.
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Yes, tenants breaking agreements are as bad as landlords breaking agreements.
 
Folsom said:
Yes, tenants breaking agreements are as bad as landlords breaking agreements
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Breaking what agreement?

I said 'at the end of the agreement'. So there is no agreement being broken.

You're picking bits that suit your agenda.
 
Hi Palerider / Alistair,

Could you share where you made your new investments

My story - I have 3 BTL's in Dublin with 1st purchased over 20 years ago, 2nd in 2013 that is just back up to same price I paid apart from excessive stamp duty at the time c. 30K which I'll probably never recoup , and 3rd during recession. Two are now mortgage free and 3rd with c. 60% ltv so not too bad so far. However I still can't make it pay and am always afraid of big repair or service charge levy. The level of return doesn't justify the risk. I think what really killed it was when FF 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. I have children so may hold onto 2 of the properties that could be of use to them but otherwise I'd just sell up. Govt keep very quiet re level of taxation, prsi, and usc they collect from private landlords. I wonder why..
 
RedOnion said:
Breaking what agreement?

I said 'at the end of the agreement'. So there is no agreement being broken.
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My apologies, I incorrectly mistook your comment to mean the tenant not paying their rent.
Of course, at the end of an there is no guarantee of rent for the landlord. But in the real world, the landlord will be aware of this before they become a landlord. That is the risk that they choose to take. If they are not prepared to take that risk, dont become a landlord. That is why any prospective landlord should set out a long-term strategy and be prepared for the troughs.

How are the real world facts and of the rtb trying to moderate rents increases and create a stable and sustainable rental market sitting with you and your own view that no such thing occurs in your world?
 
RedOnion said:
You're confusing socially desirable situation, with the real world.

You've used the word 'should'.

Either base your arguments on fact & reality,
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You implied that my suggestion of what 'should' be was not based on fact or reality. In reality, my suggestion of what 'should' be is close to what, in fact, the rtb.ie is trying to achieve - a socially desirable situation of moderate rents increases to create a stable and sustainable rental market.

Personally, I think they are inadequate measures by themselves. The realistic solution is to build more houses. I dont think it can be clearer than that.
So unless anyone else actually has a realistic proposal for the OP other than inane ideas like "free market" when they cannot even understand basic concepts of market value, I will leave here.

- Build more houses
- Impose RPZ's limits
- Drive out the cowboy spoofer landlords.
 
Mcivor said:
...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.
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Yeah, the imposition of PRSI to rental income a few years ago was probably the last straw for me.

When I ran the numbers, I realised the Government was taking nearly two-thirds of my modest rental profits. What was left didn't come close to adequately compensating me for the risks I was bearing.

So I reluctantly exited the business.
 


That's highly speculative.

What scale would a REIT need to be to have monopoly power?

I'd say 20% of rental supply in a country town would do it.

I'm not sure any institutional landlord is even at a tenth of this in any market.
 
NoRegretsCoyote said:
I'm not sure any institutional landlord is even at a tenth of this in any market.
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Well, it's just highlighting a risk.

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.
 
Sarenco said:
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.
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Yeah but there are perfect substitutes five minutes walk away.

You cannot really exert market power in a dense city location without controlling a vast amount of the market.
 
NoRegretsCoyote said:
Yeah but there are perfect substitutes five minutes walk away.
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Are you sure about that?

Checking Daft, I can only find five apartments for rent within a 5 minute walk of Heuston Station that are not owned by a single, institutional landlord.
 
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.
 
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