A question for landlords, if I may

Cedrus

daltonmd wrote: »

I think though for a lot of peopole even if the banks were giving out money that given the cost of ownership V the cost of renting - it would not make financial sense at the moment.

But somehow landlords can make huge profits while accommodating tenants wishes and absorbing repair costs along with the additional costs which do not apply to private occupation??

daltonmd

BostonB wrote: »

Except that wasn't the question. The question was how do LL make huge profits from rent. And you didn't answer the question. You can't explain how these "huge profits" are made from rent. Because you've no concept of the sums/costs involved. Business charge market rates. That how business works All the LL I know are talking about rents increasing slightly. Maybe its a blip have no idea. Probably because people can't get mortgages. You've a fixated opinion of LL thats not based on any experience or reality of that side of the rental market. As such this thread is just going around in circles. I hope that it moves to something similar to the German model. But with better legal solutions for both tenant and LL's.

BB, seriously? This is not the first time you have tried to get me to answer a question regarding an issue whih has nothing to do with the point I am making (lockers for example).

For the last time BB, during the boom, when demand was high and credit was cheap - rents INCREASED and landlords made PROFITS. They did NOT reduce their rents based on their repayments to the banks - they based it on "market rates". In having to apply the same logic, many are in trouble. For all the people who you know who are saying rents are increasing, I know of tenants who are getting rent reductions, you have a fixated opinion on how you think that the market should work, instead of how it really works.
You want tenants to take into consideration what a landlord repays on his mortgage and to the loses he is exposed to.
That was always a factor for a landlord, there were no such discussions when landlords made their profits, so it's as relevant now as it was then.

This is going around in circles because many landlords are now going through tough times, yet refuse to acknowledge that they are in fact bankrupt, as I said before - this is an explosive issue and it's been kicked down the road for far too long.

daltonmd

Cedrus wrote: »

But somehow landlords can make huge profits while accommodating tenants wishes and absorbing repair costs along with the additional costs which do not apply to private occupation??

Where did say that? Again, when landlords made huge profits during the boom due to high demand, cheap credit and rising rents, they still looked for market rents, they did not reduce their rents based on their mortgage repayments.

Now that we are bust the same logic applies - landlords had to accomadate tenants, absorb repair costs along with additional costs during the boom, but could do so because they were making money. They are not now and it defies the laws of gravity that they can now pass on these costs to the tenant, who has also lost their job, taken paycuts and faces rising costs of living.

D3PO

Graces7 wrote: »

There are two lockers here. One is covered in stickers, some pretty gross and I don;t have time or energy to deal with it. The other has a large ragged hole in the back. The previous tenants had rough ways/

.

Without meaning to you have hit on the crux of this whole discussion.

There are many tennants that frankly dont care at all or look after the contents in a rental. It would therefore be folly for a business person (landlord) to spend large sums of money in a recurrent fashion on replacing fuirniture with that of a decent standard for another tennant to go damage it again and again and again.

Its unfortunatly but thats the way it is. You can rent homes with high standards of finishes and of excellent standard but its as in any other business a case of the more you pay the more you get.

A tennant paying cheap rent complaining about the standard of service is like a Ryanair passenger complaining about poor customer service. You ultimately get what you pay for and if your not happy with what your gettting for the money your paying you speak with your feet.

daltonmd

borderlinemeath wrote: »

If the banks were giving out money there would be a queue of people waiting to get mortgage approval. While the costs may be far greater in home ownership than renting, there is a cultural thing in Ireland that to own ones property is far better than renting due to the insecurity of perhaps having to move due to matters outside of your control, ie the landlord sells up, or wants it for themselves or family etc.

I know for me when I bought my house 10 years ago, it was like a burden off my back. My family home had been sold 10 years previously and I moved from rental to rental, gathering stuff as I went along. As soon as I bought my house I finally had somewhere to put all of my possessions that I could call my own. It does give a sense of security (once you're able to keep up the mortgage payments!)

Absolutely - and I am not against home ownership. But let's just say that I wanted to buy the house I am renting, which has taken a reduction of 50% since the boom, I worked out that it would cost me about 150 euro more per month, then I would be liable for property tax, the household charge and so on.
For me it's not even the issue of paying the extra that's the problem, for the security you mention I would gladly pay the extra, but it's the uncertainty of what charges are coming in and what pay cuts/tax rises/rising costs of living are on the way - that's my fear. I may well be in a postion to afford to buy today - but what about next year, 2 years, the next 5, that's where my worry lies.

borderlinemeath

daltonmd wrote: »

Absolutely - and I am not against home ownership. But let's just say that I wanted to buy the house I am renting, which has taken a reduction of 50% since the boom, I worked out that it would cost me about 150 euro more per month, then I would be liable for property tax, the household charge and so on.
For me it's not even the issue of paying the extra that's the problem, for the security you mention I would gladly pay the extra, but it's the uncertainty of what charges are coming in and what pay cuts/tax rises/rising costs of living are on the way - that's my fear. I may well be in a postion to afford to buy today - but what about next year, 2 years, the next 5, that's where my worry lies.

That is the price you pay if you are settled into an area, with children in schools. I would far rather have security of mortgage/ownership/extra taxation than unsecurity of renting/year to year leasing and the anxiety of moving - which along with a close bereavement, divorce etc is considered one of the most stressful things you can do.

My sister is the polar opposite of me, never wants a mortgage but dreads the day when she has to move. She has rented the same place for the past 6 years. Her landlord died about 2 years ago and her son took on the role of landlord. Nothing has changed but nothing is certain, who knows when he will decide to sell up or move back to Dublin.

daltonmd

borderlinemeath wrote: »

That is the price you pay if you are settled into an area, with children in schools. I would far rather have security of mortgage/ownership/extra taxation than unsecurity of renting/year to year leasing and the anxiety of moving - which along with a close bereavement, divorce etc is considered one of the most stressful things you can do.

My sister is the polar opposite of me, never wants a mortgage but dreads the day when she has to move. She has rented the same place for the past 6 years. Her landlord died about 2 years ago and her son took on the role of landlord. Nothing has changed but nothing is certain, who knows when he will decide to sell up or move back to Dublin.

As I said, I have no issue in paying extra for that security - but what if it happens that you cannot afford the mortgage in 2/3/5 years time because of the issues I have outlined? You end up as many have in the last 3 years since the beginning of the bust - in houses that are worth less than they owe the bank, on a lot lower income with rising taxes, new taxes and rising cost of living?

That for me, is too high a price to pay.

borderlinemeath

daltonmd wrote: »

As I said, I have no issue in paying extra for that security - but what if it happens that you cannot afford the mortgage in 2/3/5 years time because of the issues I have outlined? You end up as many have in the last 3 years since the beginning of the bust - in houses that are worth less than they owe the bank, on a lot lower income with rising taxes, new taxes and rising cost of living?

That for me, is too high a price to pay.

Well then, it's people like yourself that will keep the rental market buoyant.

BostonB

daltonmd wrote: »

BB, seriously? This is not the first time you have tried to get me to answer a question regarding an issue whih has nothing to do with the point I am making (lockers for example).

You didn't answer that either. You made a vague reference to the quality of furnishing then couldn't give a straight example.

daltonmd wrote: »

For the last time BB, during the boom, when demand was high and credit was cheap - rents INCREASED and landlords made PROFITS. They did NOT reduce their rents based on their repayments to the banks - they based it on "market rates"..

And you still haven't answered the question, why would they?

daltonmd wrote: »

In having to apply the same logic, many are in trouble. For all the people who you know who are saying rents are increasing, I know of tenants who are getting rent reductions, you have a fixated opinion on how you think that the market should work, instead of how it really works.

Its not opinion. Its experience. you could suggest that, rent reductions, and complaints about the quality of the rental may not be unrelated.

daltonmd wrote: »

You want tenants to take into consideration what a landlord repays on his mortgage and to the loses he is exposed to.
That was always a factor for a landlord, there were no such discussions when landlords made their profits, so it's as relevant now as it was then.

I've never been talking about mortgage repayments, in fact I've made a point of separating that issue from everything else as it just derails the issue. I've simply been talking about the costs, when theres no mortgage.

daltonmd wrote: »

This is going around in circles because many landlords are now going through tough times, yet refuse to acknowledge that they are in fact bankrupt, as I said before - this is an explosive issue and it's been kicked down the road for far too long.

Well if they've made huge profits as you claim, then there'll be no issue. LL's will be able to recoup all costs, and maintain any loans. Indeed, if its that profitable, everyone will be falling over themselves to get in on such lucrative market. If rents are failing then that suit tenants too.

daltonmd

BostonB wrote: »

You didn't answer that either. You made a vague reference to the quality of furnishing then couldn't give a straight example.

And you still haven't answered the question, why would they?

Its not opinion. Its experience. you could suggest that, rent reductions, and complaints about the quality of the rental may not be unrelated.

I've never been talking about mortgage repayments, in fact I've made a point of separating that issue from everything else as it just derails the issue. I've simply been talking about the costs, when theres no mortgage.



Well if they've made huge profits as you claim, then there'll be no issue. LL's will be able to recoup all costs, and maintain any loans. Indeed, if its that profitable, everyone will be falling over themselves to get in on such lucrative market. If rents are failing then that suit tenants too.

I did answer it, more than once. It's just not the answer that you want to hear.

You cannot simply seperate the mortgage issue because that is the reason why a lot of LL's are in trouble and cannot absorb many of the other costs associated with renting out property.

If a LL had no mortgage and an incoming rent then he could absorb the costs - in fact he would be very lucky to be in such a position - really if a LL has no mortgage yet is not making a profit then he made a very, very bad investment.

Lastly, you just refuse to accept, despite me pointing out again and again, that when I referred to huge profits, I clarified, that this was during the boom, yet here again you simply refuse to take that on board. So I'm done repeating myself BB. Happy New Year to you!

daltonmd

borderlinemeath wrote: »

Well then, it's people like yourself that will keep the rental market buoyant.

Oh I agree, but us people have falling disposable income and rising costs of living as well.

Cedrus

daltonmd wrote: »

it defies the laws of gravity

What does gravity have to do with any of this?

Cedrus

daltonmd wrote: »

As I said, I have no issue in paying extra for that security - but what if it happens that you cannot afford the mortgage in 2/3/5 years time because of the issues I have outlined? You end up as many have in the last 3 years since the beginning of the bust - in houses that are worth less than they owe the bank, on a lot lower income with rising taxes, new taxes and rising cost of living?

That for me, is too high a price to pay.

Just declare bankruptcy!! Badaboom!:D

daltonmd

Cedrus wrote: »

Just declare bankruptcy!! Badaboom!:D

Ah no, you see those who studied economics with Bbbbertie Ahern would go ahead despite the warning signs and despite it making NO FINANCIAL SENSE.

I'll sit it out thanks. I've done my homework and when it makes sense for me to buy then I will.

Oh and what has gravity got to do with it? What goes up - must come down....:D

BostonB

daltonmd wrote: »

I did answer it, more than once. It's just not the answer that you want to hear.

You cannot simply seperate the mortgage issue because that is the reason why a lot of LL's are in trouble and cannot absorb many of the other costs associated with renting out property.

If a LL had no mortgage and an incoming rent then he could absorb the costs - in fact he would be very lucky to be in such a position - really if a LL has no mortgage yet is not making a profit then he made a very, very bad investment.

Lastly, you just refuse to accept, despite me pointing out again and again, that when I referred to huge profits, I clarified, that this was during the boom, yet here again you simply refuse to take that on board. So I'm done repeating myself BB. Happy New Year to you!

Actually you never answer the question asked, you almost always avoid it by answering something else entirely.

If you think there's a gap in the market and you believe your business model of not making profit when you can, (making hay when the sun shines) is viable then go do it.

_Kaiser_

I rent and I've been lucky that the landlords I've had to deal with have been - in the main - pretty decent as well.

As far as I'm concerned the place I'm in is my home and I like to take care of my home. My current place was finished to a very high standard anyway and it's been kept that way since day 1.

Through a change in circumstances I'm now going to have to move shortly as the commute I'm doing will be unmanageable in the new job. I'm really not looking forward to it... there's the hassle of physically moving of course, but also viewing places, trying to find a decent one in a nice (quiet/safe) area, dealing with disinterested Estate Agents that'll promise me the earth - till I sign the lease of course, negotiating the terms, sorting any issues and so on... and then to have to do it all again in a year or two (because it's virtually impossible to get long-term leases in this country!)

I'm in my mid-30s, I'm not a student - I'm a professional full-time worker who works hard and likes to be comfortable when he's home, and I'll be paying a premium for this service. For that I expect decent appliances, working fixtures, proper heating, high-speed broadband access, a nice finish to the place (not ratty old matresses, threadbare carpets and so on), and responsiveness to any issues (and I'm fairly easy-going but if something goes wrong I expect it resolved within a week or two), but because renting is seen as stupid and pointless in this country I will no doubt have to wade through loads of rubbish before I find somewhere matching the above.

daltonmd

BostonB wrote: »

Actually you never answer the question asked, you almost always avoid it by answering something else entirely.

If you think there's a gap in the market and you believe your business model of not making profit when you can, (making hay when the sun shines) is viable then go do it.

My business model? I have absolutely no idea what you are talking about? I have no recollection of putting down any business model.

Any business is entitled to make a profit - what else would be the point. If a landlord runs a good set up then why shouldn't he make one - you just can't get that when he makes a profit he does not reduce his rent accordingly - so when he makes a loss he cannot expect to be able to keep increasing rents to cover them. Not in this climate.
If he cannot survive this recession then that's his problem, not the tenants.

In regards to the now infamous locker question, it is a completely stupid and irrelvant question, where again you try to prove a pointless point and ask me to tell you what I would pay for a locker in a rented house - when asked to clarify the reason for the replacement, you refuse - your issue with the cost of the locker is inextricably linked to the issue you have with these being destroyed by tenants.

When asked do you not take this from the deposit you said this was fiction -and again if it is fiction and you paid 50 euro for a locker and had it destroyed and took it from the deposit - then it is a non issue because the tenant has paid for the damage.

BostonB

A business model is how it delivers profit, and you have been talking about profit. The locker was in relation to defining quality of furnishing you are expecting. But you derailed it into something else entirely. Paying for things out of deposits. Likewise you were asked why a LL should reduce their rent if in profit. But again no reason why. You derail that into about losses and mortgages. Its classic strawman. Its not answering the questions asked. Its like trying to watch TV and someone constantly changing the channel. My mistake is getting sucked into replying. I shouldn't take the bait.

tara73

BostonB wrote: »

Give an example of a property that would give you 20k+ in profit in rent pa.

was following your discussion roughly and I wonder about you insisting why it shouldn't be possible or difficult to make a profit of 20k+ a year in renting.

just one of many many examples:
I lived in a victorian house the landlady had converted into 5 apartments/bedsits. this is, as everybody knows, very common in dublin.
she got from every apartment +/- 600 €/month.
makes 3000 €/month; makes 36 000 €/year.

not familiar with the tax to pay for it, but wouldn't think it eats up all of the 36 000...
she kept maintenance to a minimum, so no big expenses from that point either.

how didn't they made a profit??

BostonB

Actually my comment was in the context of how much a LL is exposed to lose if someone overstayed in property and doesn't pay rent, then damages the property extensively, and the difficulty in recovering any money from a tenant. So I was basing my figure on a smaller property say if 1200 a month then say 6k or so on repairs etc.

But if you have a property worth millions and you let it fall in to ruin, by doing no maintenance, yes you'll make that kinda money, for a few years until people stop renting it, because its neglected, then uninhabitable. Then it will cost hundred of thousands to refurbish. Every property needs considerable maintenance, even if nothing big need attention.

daltonmd

BostonB wrote: »

A business model is how it delivers profit, and you have been talking about profit.

No- I have been talking about market forces. I used the example that when a landlord was making profit during the boom it did not cause him to reduce his rent. He (or she) based the rent on supply, demand and the market rent. Now, that we are in a different climate some landlords think that they can simply ignore the same market forces and pass on any charges that they cannot meet to the tenant. This is not how it works.

BostonB wrote: »

The locker was in relation to defining quality of furnishing you are expecting. But you derailed it into something else entirely.

This is where you derailed the argument. It has nothing to do with the issue.

BostonB wrote: »

Likewise you were asked why a LL should reduce their rent if in profit. But again no reason why.

Where did you ask me that? I believe it was I who stated this - not you who asked.

BostonB wrote: »

You derail that into about losses and mortgages. Its classic strawman. Its not answering the questions asked. Its like trying to watch TV and someone constantly changing the channel. My mistake is getting sucked into replying. I shouldn't take the bait.

No I didn't, either you or another poster said that if their mortgage was X amount and the rent was lower, then where was the profit. As I have stated before, rents are not based on the outstanding mortgage on a property - it's market forces that dictate them.

daltonmd

BostonB wrote: »

Actually my comment was in the context of how much a LL is exposed to lose if someone overstayed in property and doesn't pay rent, then damages the property extensively, and the difficulty in recovering any money from a tenant. So I was basing my figure on a smaller property say if 1200 a month then say 6k or so on repairs etc.

But if you have a property worth millions and you let it fall in to ruin, by doing no maintenance, yes you'll make that kinda money, for a few years until people stop renting it, because its neglected, then uninhabitable. Then it will cost hundred of thousands to refurbish. Every property needs considerable maintenance, even if nothing big need attention.

Again, this is a different issue. Landlords have to take potential losses and pitfalls into the equasion before they make the investment, like any business.

BostonB

Classic. Still no answers to simple questions, and you change the subject constantly.

Cedrus

BostonB wrote: »

Classic. Still no answers to simple questions, and you change the subject constantly.

+1

BostonB

I suspect the underlying idea here, profits should be reduced as some form of social agenda. But when theres no profits, and even losses, the LL should absorb all costs for the same reason.

tara73

BostonB wrote: »

But if you have a property worth millions and you let it fall in to ruin, by doing no maintenance, yes you'll make that kinda money, for a few years until people stop renting it, because its neglected, then uninhabitable. Then it will cost hundred of thousands to refurbish.

very true. but I think it is unfortunately kind of a very common business model with many landlords (not only in Ireland):

they try to make the most profit without investing much (and here I don't mean doing absolutely nothing, but just as much as it is necessary, only doing bits and pieces in a superficial way, never real renovations can ruin a building over time as well) and if the time is right and the possibility there they'll sell the property.

with this you have the minimum hassle and the most profit. most appealing to many people:).

and here we are back to the original question, I think many of the landlords who practice this won't live in their own properties.

conorhal

Well my folks own several investment properties, and despite the massive slump in property prices not one of them is in negative equity, nor are they empty.
The reason for this is simple, whenever investing in a property they always asked themselves two questions.
Firstly, can I afford this? They always purchased whenever the market was low and prices were reasonable (hence the reason that they have not invested in property in Ireland in the last 15 years).
And secondly they would always ask themselves, ‘but would I live in it’?
It's an important question, because if the answer is no, then why the hell would anybody else?
Answering in the positive to this question is, in all likelihood, the reason that they would still make a substantial profit if they were forced to sell any of their properties, because they bought low, in areas that have maintained high property values and are located close to plenty of amenities.
They also feel that it's important to ensure that a property is well maintained and the contents of a good quality, (which doesn’t necessarily mean that they have to be particularly expensive, just because something is hard-wearing and functional doesn’t mean that it inevitably looks like it was nicked off a skip!), if the property is well maintained and located in a high demand area it means that you will never be short of a tenant and those tenants will stay for long periods of time ensuring a good continuity of income from your investment.
In other words, they are just good business people, and good business people look after their investments and their customers.

BostonB

tara73 wrote: »

very true. but I think it is unfortunately kind of a very common business model with many landlords (not only in Ireland):

they try to make the most profit without investing much (and here I don't mean doing absolutely nothing, but just as much as it is necessary, only doing bits and pieces in a superficial way, never real renovations can ruin a building over time as well) and if the time is right and the possibility there they'll sell the property.

with this you have the minimum hassle and the most profit. most appealing to many people:).

and here we are back to the original question, I think many of the landlords who practice this won't live in their own properties.

Can't disagree with any of that. It was probably even more common 10~20yrs ago than it is now.

On the flip side, these days the number of new build rentals, and people renting out their former homes, is more common than it ever was. The quality of new builds though can be poor, as regulation was non existent. It appears, many are turning to rent their own home, in order to be able to move or emigrate for work.