Phasing in rent increase

Wanderer78

It sounds like they are good tenants, I wouldn't increase rent too much straight away, certainly not to market rate. If they leave, God only knows what kind of tenants you'd get. Best of luck with it

hytrogen

Kori Modern Fencer wrote:

What planet are you living in, the op has indicated he can get about 900 euro more per month than he is. Even at 50% tax that 450 euro a month more, would you turn now a net 450 euro per month pay increase? You would in your arse.

I'm from the planet of reasonable thought and justifiable actions, how's life under that bridge?
If the OP isn't sure of what or how they should up the rates to meet the market par then they need to crunch the numbers & justify it appropriately, as well as to see how much of Pandora's box is ahead of them before they take it on.

The_Conductor

Less of the abuse guys- if you can't be civil towards one another- don't post.

RasTa

The_Conductor wrote: »

I've helped a colleague let a property in Lucan in the last few days. She had over 50 enquiries within 4 hours of putting the property up on Daft- which she whittled down to 20 interested parties who turned up for an open viewing the following day and evening- of whom 14 offered more than the price on Daft- one, a consultant in the Hermitage, who wants to bring his family over, but has been having difficulty finding somewhere suitable- offered double the asking price- and 6 months rent upfront to Cathy. She was shocked- but took it........

I think your friend is lying here. You can get some nice property's in Dublin 15 for what I would guess is double the asking price of Lucan below

http://www.daft.ie/dublin/houses-for-rent/castleknock/somerton-castleknock-golf-country-club-castleknock-dublin-1670697/

http://www.daft.ie/dublin/houses-for-rent/castleknock/6-hadleigh-park-castleknock-dublin-1687948/

http://www.daft.ie/dublin/houses-for-rent/clonsilla/castlefield-woods-clonsilla-dublin-1686241/

ZeroThreat

Wanderer78 wrote: »

It sounds like they are good tenants, I wouldn't increase rent too much straight away, certainly not to market rate. If they leave, God only knows what kind of tenants you'd get. Best of luck with it

Given the desperation in the market you can afford to be extremely picky about who your tenants are, and squeeze them till the pips squeak to boot. Win, win, chaching!

Weepsie

ted1 wrote: »

Tenants shouldn't be paying less than a mortgage would cost.

I'd argue it the other way. Its not the role of a tenant to cover the cost of a mortgage. Unless it's a buy to let, a cash buyer, multiple investors or a large portfolio then expecting the cost of the mortgage to be covered by the rental income is absurd.

If that was the case everyone would be able to just avail of a mortgage and buy.

Too many amateurs who think I'll take out a loan, have someone else pay it all off, and then sell it for 100% profit.

Its a long-term investment, and if people are not willing to take the risk and have some losses to have the long term goal of a property bought and paid for 30-50℅ of its value then they shouldn't be getting into the property game at all.

This is a massive issue

Weepsie

DivingDuck wrote: »

Absolutely true.

This is why tenants do and should pay a premium to landlords for doing it. It's why it's fair for rents to be higher than mortgage repayments, and why landlords deserve to make a profit on houses they own and rent out.

You make the profit on the final value of the house and it being a saleable asset to you.

Shouldn't be 30 years of profit from rent then a fully paid property for you to dispose of as you please.

runawaybishop

Weepsie wrote: »

You make the profit on the final value of the house and it being a saleable asset to you.

Shouldn't be 30 years of profit from rent then a fully paid property for you to dispose of as you please.

Why shouldn't they make profit on both? You expect people to take on the risk for 30-40 years with a profit that wont mature until then. Nonsense. This is a business, if they do not make profit they will exit that business. I really do detest the word begrudgery but there is not a more appropriate one when it comes to discussing tenants v landlords.

Weepsie

runawaybishop wrote: »

Why shouldn't they make profit on both? You expect people to take on the risk for 30-40 years with a profit that wont mature until then. Nonsense. This is a business, if they do not make profit they will exit that business. I really do detest the word begrudgery but there is not a more appropriate one when it comes to discussing tenants v landlords.

That's the nature or investing in all forms. Its a gamble, it has inherent risk. The amateurism displayed here and elsewhere seems to be this. Get a mortgage. Whack a higher rate of rent on it. Get it all paid. Have a free house.

Unless you're stumping up a significant deposit, of 30℅ (which is the minimum I believe) to do a buy to let properly and have the required capital saved then yeah I that's how it should work.

Too many eejits with personal mortgages for private homes out there gouging people for rent to cover 100℅ of costs and hoping to get double their money. Its just plain stupid.

If you take the risk you should be thinking, "I might get lucky to have 50-70℅ of this paid off through rental income". But if you're not willing to pay up to 50℅ of the cost of the investment over its lifetime you're not actually willing to take the risk.

If it was as simple as that mortgage - rent = profit everybody would be doing it. Too many morons have become landlords this way.

runawaybishop

Weepsie wrote: »

That's the nature or investing in all forms. Its a gamble, it has inherent risk. The amateurism displayed here and elsewhere seems to be this. Get a mortgage. Whack a higher rate of rent on it. Get it all paid. Have a free house.

Unless you're stumping up a significant deposit, of 30℅ (which is the minimum I believe) to do a buy to let properly and have the required capital saved then yeah I that's how it should work.

Too many eejits with personal mortgages for private homes out there gouging people for rent to cover 100℅ of costs and hoping to get double their money. Its just plain stupid.

If you take the risk you should be thinking, "I might get lucky to have 50-70℅ of this paid off through rental income". But if you're not willing to pay up to 50℅ of the cost of the investment over its lifetime you're not actually willing to take the risk.

If it was as simple as that mortgage - rent = profit everybody would be doing it. Too many morons have become landlords this way.

They took the risk, they can charge what they want for their asset. Rents were massively down a few years ago so only a fool would not maximise profit when they can. This is a business, simple as that. Take the emotive nonsense out of it.

Graham

Weepsie wrote: »

Its a gamble, it has inherent risk.

Congratulations, you got it. What do you think makes people decide to take that risk? The potential financial rewards.

Keep increasing the risks while eroding the potential rewards and what do you think happens? (look at the current rental market for some big clues)

Weepsie

Its not emotive. Its true. Far too many amateurs
I get that it's a business, but the value is in the asset, the property itself, theres some income to be made on rent but it shouldn't be covering 100℅ of a mortgage plus more unless you've got a great mortgage repayments deal or have a made a huge cash investment.

Weepsie

Graham wrote: »

Congratulations, you got it. What do you think makes people decide to take that risk? The potential financial rewards.

Keep increasing the risks while eroding the potential rewards and what do you think happens? (look at the current rental market for some big clues)

The pay off is in the property though, not a monthly profit. Service the debt through rental income by all means, but it shouldn't be covering the entire cost. Certainly not for sole landlords.

I did say it's different for large portfolio buyers, cash buyers etc.

runawaybishop

Weepsie wrote: »

Its not emotive. Its true. Far too many amateurs
I get that it's a business, but the value is in the asset, the property itself, theres some income to be made on rent but it shouldn't be covering 100℅ of a mortgage plus more unless you've got a great mortgage repayments deal or have a made a huge cash investment.

Why shouldn't it - Is there a limit on profit that people are not allowed to pass? What is this limit, you seem to infer that the limit is 0%. Who would get on board for that?

Did you hear about the recession recently by any chance. How do you expect LLs to cover losses on rent in bad times by limiting themselves in good times.

This is a businesses, you maximise profits. To do so otherwise is amateurish.

Graham

Weepsie wrote: »

The pay off is in the property though

I refer you to the recent exodus of buy-to-let landlords as evidence to the contrary.

The large-scale commercial landlords currently investing are doing so at very strict yields. That's ongoing revenue, not capital appreciation as you appear to suggest. (Capital appreciation would be a bonus of course)

athtrasna

Any chance we could get back on topic?

ZeroThreat

runawaybishop wrote: »

Why shouldn't it - Is there a limit on profit that people are not allowed to pass? What is this limit, you seem to infer that the limit is 0%. Who would get on board for that?

Did you hear about the recession recently by any chance. How do you expect LLs to cover losses on rent in bad times by limiting themselves in good times.

This is a businesses, you maximise profits. To do so otherwise is amateurish.

I reckon your tenants tend not to tell you whenever they get a promotion

runawaybishop

ZeroThreat wrote: »

I reckon your tenants tend not to tell you whenever they get a promotion

What tenants.

Anyway, OP would be foolish to not increase the rent to near market rate.

Wanderer78

runawaybishop wrote: »

What tenants.

Anyway, OP would be foolish to not increase the rent to near market rate.

could go either way, they could also lose what seems to be good tenants if they do so

Graham

Wanderer78 wrote: »

could go either way, they could also lose what seems to be good tenants if they do so

It speaks volumes about peoples opinions of a landlords risk that they think good tenants warrant a 50% discount.

runawaybishop

Wanderer78 wrote: »

could go either way, they could also lose what seems to be good tenants if they do so

Near to market rate, not market rate.

Lux23

ted1 wrote: »

A landlord is running a private business with the intent of maximum return. He can raise it to what the market can bear.

Private landlords should t be providing social housing, that's the job of the state.

Either buy your own house or you'll have to pay what the market rate is.

Or you become homeless because you can't afford to rent or buy. What happens to the market then.

The_Conductor

Lux23 wrote: »

Or you become homeless because you can't afford to rent or buy. What happens to the market then.

Its Ireland- so what happens, is the local authority step in, break all their own rules- and pony up......... Come on- we've all seen it...........

ted1

Lux23 wrote: »

Or you become homeless because you can't afford to rent or buy. What happens to the market then.

That's when you exit the private rental market and enter the social rental system

quadrifoglio verde

If the rent doesn't cover the mortgage, you won't find too many rushing in to become landlords.
In 2006, it was different. People were buying left right and centre for one of two reasons, one for tax breaks or else to flip them in a year or two.
It didn't matter if the mortgage didn't cover the rent, as the asset was rising rapidly. They didn't have to stump up 30% deposit and all of the mortgage interest could be wrote off against the tax.

murphaph

Weepsie wrote: »

Its not emotive. Its true. Far too many amateurs
I get that it's a business, but the value is in the asset, the property itself, theres some income to be made on rent but it shouldn't be covering 100℅ of a mortgage plus more unless you've got a great mortgage repayments deal or have a made a huge cash investment.

Actually a sound investment should wash its face with the rent and deliver a yield commensurate to the risk (unfortunately the risk is fairly high for landlords in Ireland). If the property can be sold at the end with no loss it's a bonus. The real clowns are the ones who invested in the assumption the value of the asset would never decline. All those btl "investors" that are getting repossessed? They basically did what you advocate above and lost big time.

The_Conductor

murphaph wrote: »

Actually a sound investment should wash its face with the rent and deliver a yield commensurate to the risk (unfortunately the risk is fairly high for landlords in Ireland). If the property can be sold at the end with no loss it's a bonus. The real clowns are the ones who invested in the assumption the value of the asset would never decline. All those btl "investors" that are getting repossessed? They basically did what you advocate above and lost big time.

It would be nice if the banks ever just copped on, and repossessed any property which has its mortgage in arrears- and put them on the open market. Aside from anything else- our pillar banks have to have a Tier 1 capital rating of 12% by 2018- which they're quite simply incapable of realising with all the dud loans on their balance sheets.........

MSVforever

If I was given a 50% rent rise I would move out of Dublin. It's crazy what's going on atm. The rental situation has to change long term in Ireland.

You either are lucky enough to be able to afford a mortgage (with the current lending criterias) or you get a council house (both long term homes).
The people renting privately often have to worry every year if their lease will be renewed or not.
Furthermore they can't even have their own furniture (look at the ads on daft with all the granny furniture).

It would be great if there would be more substantial sized apartments being built. Not everybody needs to live in a house (apartment living in continental Europe works even for families).

hytrogen

MSVforever wrote:

It would be great if there would be more substantial sized apartments being built. Not everybody needs to live in a house (apartment living in continental Europe works even for families).

Notions of requiring road frontage prevents that in the Irish market, hence why most apartments cater for the single / double rooms model. But yes you are very true, our allocation of land and the land usage policies of the councils are trending towards apartment home living, slowly

Finbarr Murphy

quadrifoglio verde wrote: »

If the rent doesn't cover the mortgage, you won't find too many rushing in to become landlords.
In 2006, it was different. People were buying left right and centre for one of two reasons, one for tax breaks or else to flip them in a year or two.
It didn't matter if the mortgage didn't cover the rent, as the asset was rising rapidly. They didn't have to stump up 30% deposit and all of the mortgage interest could be wrote off against the tax.

Plus the rent has to cover tax on interest relief (landlords making a loss where the mortgage exceeds the rental income still have to pay this), expenses, property tax, PRTB registration etc etc.

Could LL's really write of all of mortgage interest in 2006? I don't think so.

Though landlords are viewed as rich so and so's currently I don't see how it's viable to be a landlord in Ireland unless there's a small (or no) mortgage on the property.

Also those calling for a policing of rents would you be in favour of this if rents were to drop to all time lows such as those in 2009? Where was the supports for landlords then?

Anyhow my view on the OP is to increase the rent to near market rate maybe -10%.