Plight of a landlord

Joe_90

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http://m.independent.ie/opinion/col...way-to-help-ease-housing-crisis-34189124.html

Why does everything come back to tax relief?

I was particularly intrigued by:
But it has not been a money-making machine. We don't break even. Believe it or not, landlords are liable for tax and other fees.

The author gives no indication of the price paid for the three rental properties or the rent that is being achieved.

Someone with more experience than me could suggest that in the late 90s these house may have cost £80k or €100,000 so should be near the end of mortgage. If imagine the reference to not breaking even include the capital repayments.
 
I read that article a few day ago and it was so bad I didn't pass any head on it.

She bought three properties. Two were 100% funded by borrowings it seems to me, she mentioned equity in the first and from the home to fund the two subsequent purchases. She stated that LPT was one of the biggest annual outlays !?!. Because of the time she bought I'd be amazed if she was in NE.

And yes she must be coming to the time of breaking even. UNLESS, she dipped in again, not uncommon to take out 'equity'. All these stories are never fully told. Were the rents ever covering interest and capital. Was a term extension sought.

If you bought in the late 1990's you are at least 15 years in. You'd have 5, maybe 10 years to go. Most of your rent would now be paying down capital, not interest. She will eventually own the three properties outright. And if she's been wise, most of this will have been paid for by rent. But it is true she has probably been paying some from her own pocket, and it is true that the imposition of USC, PRSI, the loss of 25% interest relief has made it very uneconomical to be a landlord if you are a higher rate tax payer.

It's a nonsense for someone to describe themselves as unprofessional if you have three properties. Actually if you have one and been in the business 15 years you should be professional. What is professional. Accidental I get and have some sympathy, for some.

I heard a report on this with Joe Duffy. The story was so ludicours I wrote it down.

Landlord bought in '98, for 90K in Limerick. At height worth 160K, at bottom worth 30K, mention of a particular block, and now worth 40K. So 17 years of mortgage payments. I suspect the whinge there was because either he was mad at himself for not selling for 16K or he bought in one of those 'mismanaged' apartment blocks where nothing was ever right with the management company from the get go, hence the amazing drop from '98 of 90K to 40K today.
 
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Just read that article.

What does "we had saved a loan" mean?

Why does she not write off unpaid rent so that she doesn't have to pay tax on it?

How would a pension fund help her kids on the property ladder?

Sounds to me like she just jumped on the property bandwagon without having much of a clue about finance or property.
 
It seems to me that after nearly 20 years in the business she still doesn't have a clue.
She hasn't put up the rent in 3 years - no wonder she's not making even a small profit.
 
It is an atrocious, poorly written article - given it is an opinion piece I guess they edit it rather more lightly than dispatches from their journos. Having said that - if it is written by the person named, she is a journalist - she is paid to write!

3 bed semi-detached houses in Carlow-Kilkenny ... At best they are likely in either LPT bands 2 or possibly 3, less likely 4 (maybe the Kilkenny property). So her massive outlay on LPT is maybe €945pa (quite possibly it is less than that). Rents have not risen as steeply in Carlow or Kilkenny as they have in Dublin or Cork but there will have been some general rise in the last few years. Generally a 3-bed semi-d will rent for between €700-€800 per month in Carlow town and €850-€950 in Kilkenny city. Since she hasn't raised rents it wouldn't be unreasonable to assume the lower figures in each case. I'm not buying her story. I agree with Mrs Vimes - clearly did not understand what she was getting into and despite more than 15 years in the business, still doesn't really understand. If you are that disengaged then you haven't had any real reason to examine it too closely, which probably means it has been wiping its nose for years.
 
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