Renting in Dublin

lustig2014

Having a nightmare at the moment trying to find a 2 bedroom flat to rent on the Northside of Dublin for me and my girlfriend.

We went to a viewing on Monday night, we were told we basically had the place by the letting agent and that it was just a formality in doing the paperwork. The next day we get an email from the letting agent saying the landlord wants to re-advertise the house at an extra €300 pcm, but that they would be interesting in letting to us for an extra €200 pcm.

Can't help but think we're being played here to force up the rent. Anyone else had any similar experiences? Its amazing that we're only seven years on from the country going broke and people are making the same mistakes as if nothing had ever happened.

awec

Moved from rugby forum.

Samuel T. Cogley

We never made the rental 'mistake' during the last boom, rents where pretty decent. I rented in the same complex I now rent out a flat in for €800, going rate today is €1350.

Just be ready to go on anywhere you view there and then. Do everything by bank transfer but be prepared to say yes on the spot. Have references and everything else ready to go. Where exactly are you looking and whats the budget - if you don't mind me asking to provide some better feedback.

lustig2014

Our landlord has said we can stay in our flat till the end of February so thankfully we don't have to face the rental market for a while yet

dudara

Just to be an awkward bugger, I’d ask the rental agency what was the previous tenant’s rent and when it was last set? There’s a high probability that they’re trying to exceed the 4% rent increase cap.

lustig2014

Good point, according to the rental agency they've been trying to rent it since November. It says on daft it was advertised at €2,600 pcm in November 2017, they've had to drop the rent gradually until we got to January 2018 and we viewed it at €2,000 pcm.

I'm guessing the landlord couldn't get anyone to take a two bedroom house for €2,600 pcm and has dropped the price. Then he's read the various articles appearing in the indo etc about the rental market going crazy again, and now see's the opportunity to get as close to €2,600 as he can.

It's back up on daft at €2,300 and we haven't heard anything from the rental agency since Tuesday. I seen that a few people have left unfavourable reviews of the particular rental agency on Yelp.ie so perhaps we dodged a bullet there

Del2005

dudara wrote: »

Just to be an awkward bugger, I’d ask the rental agency what was the previous tenant’s rent and when it was last set? There’s a high probability that they’re trying to exceed the 4% rent increase cap.

And say goodbye to getting a rental off that agent. It's a sellers market so no point in rocking the boat, what you do after getting a tenancy is a different matter.

KellyXX

I think a lot of the lack of supply is down to rent controls.
Landlords are just leaving properties empty who got stuck below market rate and are just biding their time and letting the value just increase before selling with vacant possession.

In the meantime if they can get a short term let they will.

If there was a legal.way for all landlords to bring their rent to market rent then there would be less evictions for refurb and also more landlords willing to rent normally again.

dolallyoh

KellyXX wrote: »

I think a lot of the lack of supply is down to rent controls.
Landlords are just leaving properties empty who got stuck below market rate and are just biding their time and letting the value just increase before selling with vacant possession.

In the meantime if they can get a short term let they will.

If there was a legal.way for all landlords to bring their rent to market rent then there would be less evictions for refurb and also more landlords willing to rent normally again.

Yes it is a ridiculous situation.

dudara

Del2005 wrote: »

And say goodbye to getting a rental off that agent. It's a sellers market so no point in rocking the boat, what you do after getting a tenancy is a different matter.

As I said, it would be a case of playing awkward buggers.

lustig2014

Would have to disagree. Can't see any landlord worth their salt passing up say €1700 a month in rent just because they are not allowed to increase the rent to €2,000.

At the end of the day the object of rent is to cover the landlords mortgage, with an added extra amount to cover repairs, maintenance and agency fees. It should not be the case that landlords should be able to capitalise on the failure to build new homes by feathering their own nests.

And with the effective tax rate on rental income of 52% for higher rate taxpayers, is it really worth bleeding tenants dry just to make an extra few hundred euro a month?

dudara

Some people think short term rather than long term. They’d rather get €2,300 and have the place empty or get tenants who will default because it’s unsustainable rather than charge €1,900 (say) and have happy tenants and continuous occupancy.

Ashbx

OP I wouldn't give up looking just because your allowed stay in your current house an extra month. That month will go fast and its a nightmare out there at the moment!

Best of luck!

DubCount

There are not many people (landlords or otherwise) who will turn down more money. If your employer offered you a pay increase of €200 per month, would you turn it down? Would you worry that maybe the employer cant afford it in the long run? Would you say you're not bothered because you'll have to pay 50% tax on it anyway?

Residential property letting is a business. If a landlord can make more money, he/she will make more money. The only way of stopping rental inflation is to reduce demand (for example, by making it easier for first time buyers to buy or for the government to provide social housing directly), or increase supply (Encourage more people to become landlords). Unfortunately, all that has happened in recent times is a succession of measures aimed at encouraging landlords to leave the market.

For OP, the lack of supply of rental property in Dublin is not your fault, but you are one of the many people who face the consequences. The Landlord can ask for an extra €200 pcm, because if you dont pay it, someone else will.

lustig2014

Not sure if that's the best comparison to make. If I was offered that pay increase I'd assume it would be due to me having earned it. What does a landlord do to earn the extra €300 a month?

Completely agree with your second point, however it is a real shame that housing is viewed now as nothing more than a commodity, rather than a place for the young families to build a home and a life.

We wonder why big events like the Rugby World Cup pass us by. With Irish rents rising at six times the EU average, events organisers take one look at the greed culture in this country and think "No chance, if this is the norm, what the hell are prices going to be like if we give them something big"

But none of that matters provided Johnny Landlord can make a quick buck cos it's not up to him to fix the system

hawkelady

lustig2014 wrote: »

Not sure if that's the best comparison to make. If I was offered that pay increase I'd assume it would be due to me having earned it. What does a landlord do to earn the extra €300 a month?

Completely agree with your second point, however it is a real shame that housing is viewed now as nothing more than a commodity, rather than a place for the young families to build a home and a life.

We wonder why big events like the Rugby World Cup pass us by. With Irish rents rising at six times the EU average, events organisers take one look at the greed culture in this country and think "No chance, if this is the norm, what the hell are prices going to be like if we give them something big"

But none of that matters provided Johnny Landlord can make a quick buck cos it's not up to him to fix the system

Maybe you should aim your dislike for landlords towards the government.. After all, its the government who introduced RPZ caps etc. I know a few LL's who are finding it hard to continue ,actually a few are getting out of it and selling to REIT's just cause its not making financial sense to carry on..

Wait a few years and we'll all see how REIT's deal with things.. "the devil you know" comes to mind

lustig2014

I don't dislike landlords, I dislike the greed culture around the rental market. Is it not enough to have your mortgage paid, your house occupied (and less likely to be broken into) Why MUST landlords make money from renting, is the idea not to realise profit when you eventually sell the house.

We are losing an entire generation to insecure letting and excessive rents. All because a lucky few who hold property must maximise profit at every turn.

I can think of a number of viable alternatives to selling to a REIT

Samuel T. Cogley

lustig2014 wrote: »

I don't dislike landlords, I dislike the greed culture around the rental market. Is it not enough to have your mortgage paid, your house occupied (and less likely to be broken into) Why MUST landlords make money from renting, is the idea not to realise profit when you eventually sell the house.

We are losing an entire generation to insecure letting and excessive rents. All because a lucky few who hold property must maximise profit at every turn.

I can think of a number of viable alternatives to selling to a REIT

I have a mortgage of around 650 per month on my one bed. Assuming I have no voids, great tenants and no losses ever €1200 is needed for it to break even, this is a one bed in the CC. No business on Earth runs on those conditions for very long.

The only reason lets are insecure is because we're selling up left, right and centre as it's not worth doing.

Oh and BTW there is an incredibly easy fix for tenants - simply make rent tax deductible for tenants. With the current cap it would solve the issue overnight. Wonder why it's not been done? :pac: Smoke and mirrors my friend, smoke and mirrors.

lustig2014

Good to get a live example from a landlord's point of view.

May I ask what expenses you incur on the property which total 550 pcm? I can only think of LPT, management fees and factors which I can't see as coming to that amount.

I'd say the profit on sale of a 1 bedroom CC flat would be more than enough to cover short term losses

Samuel T. Cogley

lustig2014 wrote: »

Good to get a live example from a landlord's point of view.

May I ask what expenses you incur on the property which total 550 pcm? I can only think of LPT, management fees and factors which I can't see as coming to that amount.

I'd say the profit on sale of a 1 bedroom CC flat would be more than enough to cover short term losses

Tax

o1s1n

lustig2014 wrote: »

Good to get a live example from a landlord's point of view.

May I ask what expenses you incur on the property which total 550 pcm? I can only think of LPT, management fees and factors which I can't see as coming to that amount.

I'd say the profit on sale of a 1 bedroom CC flat would be more than enough to cover short term losses

Tax at 40%

CIARAN_BOYLE

lustig2014 wrote: »

I don't dislike landlords, I dislike the greed culture around the rental market. Is it not enough to have your mortgage paid, your house occupied (and less likely to be broken into) Why MUST landlords make money from renting, is the idea not to realise profit when you eventually sell the house.

Assuming you are asking a serious question (and you may not be instead preferring to have a whine and a moan it's to insulate the landlord from the risk of a bad tenant.)

When I say bad tenant I don't mean not paying the last month's rent and letting the landlord keep the deposit leaving behind a few hundred euro worth of damage. That's common place and considered a mere cost of doing business there days.

The real risk and much rarer is the tenant who occupies a house without paying rent for over a year does €10,000 worth of damage forces the landlord to pay legal fees to get him evicted and take over a week off work to attend hearings.

This is much rarer but it happens enough that everyone knows of a case where it happens. So the profit earned by the landlord insulates them from this risk.

Also most landlords see rental profit as paying the capital portion of the mortgage and feel a that it is unfair that this is taxed.

Del2005

lustig2014 wrote: »

I don't dislike landlords, I dislike the greed culture around the rental market. Is it not enough to have your mortgage paid, your house occupied (and less likely to be broken into) Why MUST landlords make money from renting, is the idea not to realise profit when you eventually sell the house.

We are losing an entire generation to insecure letting and excessive rents. All because a lucky few who hold property must maximise profit at every turn.

I can think of a number of viable alternatives to selling to a REIT

A lot of landlords aren't covering the mortgage so they need to increase the rent to cover the costs that the government forces onto them, while allowing the REITs make huge profits and pay no tax!

There are no other businesses that run on the margins that people think landlords should. Do you go to Dunnes or your local corner shop and say that you are making too much profit so I'm going to lobby the government to fix the price you can sell at? No yet your average company is making much more profit than the landlord you like to bash for trying to make a profit when possible, there was no call for rent control a few years ago when people were getting hundreds of their rent.

lustig2014

You get a deduction for the mortgage interest paid, as well as advertising, management fees, repairs, capital expenditure

lustig2014

Even factoring in tax I just can’t see how your incurring 550 pcm in expenses on a 1 bed property

dolallyoh

Buy your own house - that will teach em...

Samuel T. Cogley

As for the sale covering the losses I'd be 70K out of pocket if I sold today. More fool me for buying in the last boom but trying to recoup some of that isn't greed it's just basic business sense. At the end of the day I pay thousands in tax to house people that can't afford housing. Why as a private LL should I do it myself? I continue to watch as that money is squandered by the government and we see stupid mistakes like ghettisation of social housing (what tiny amount is being built) all over again as people in D4 don't want the 10% of social tenants on their doorstep.

CIARAN_BOYLE

lustig2014 wrote: »

Even factoring in tax I just can’t see how your incurring 550 pcm in expenses on a 1 bed property

Let me throw in a little p&l for you. While the figures are made up they are representative of doing several hundred tax returns for persons renting property

Rent 14,400

Mortgage interest 2400 (tax deductible portion 1920)
Mortgage capital 5400
Management fees 1200
Repairs 1200
Insurance 600

Taxable profit 9480
Cash profit before tax 3600

Tax thereon 4645 (3792 paye, 474 usc 379 prsi)

Cash loss 1045

Now I agree with the argument that landlords shouldn't expect to see capital repayments fully paid for by rental income but I can understand the expectation. Landlords dont feel greedy as they are putting cash into the property every year.

As I said above they need the 'profit' in order to justify rental given the risk of a bad tenant. I wonder how many landlords would accept strong price controls if it came with quick evictions for delinquent tenants.

Samuel T. Cogley

lustig2014 wrote: »

Even factoring in tax I just can’t see how your incurring 550 pcm in expenses on a 1 bed property

1200 x 12 = 14,400

14,400
-1,500 Mortgage interest
-1,300 Management fee
-0,500 Capital allowance
-0,250 Maintenance
10,850 Taxable income @ 52% plus PRSI and USC say 55%

10,850 @ 55% = 5967.50

14400
-7800 Mortgage
-5967.50 Tax-bill
-1300 Management Fee
-0250 Maintenance
(917.50) () Denoting the yearly loss which would effect tax paid but as an example.

Damn it beaten too it :pac:

Forgot insurance, to be fair that's about €300 for me. AND I forgot to pay Ciaran Boyle for doing for me properly so I don't get anal probed by revenue.

CIARAN_BOYLE

Samuel T. Cogley wrote: »

AND I forgot to pay Ciaran Boyle for doing for me properly so I don't get anal probed by revenue.

Knew I forgot something.

Also I assumed not the highest usc rates.

Samuel T. Cogley

Puts it in context alright. I'm actually charging €1000 a month and being bold with a tracker. Apartments in the area go for €1300 - €1450 if those people are on BTL rates they're still paying in even at that rate. Now okay they have the asset but a fair amount of risk too.

Now to be fair to Lustig what's not mentioned about these huge potential losses is they get carried forward against tax but for one off LL's of which most are one bad tenant can easily sink a LL taking their credit rating with it - I'm yet to see an option of an LLC for one off LL's. Limited liability being something almost every other business can avail of along with a 100% relief on debt.

I know where people are coming from, no one likes paying bills but most LL's are not sitting back sipping John Collins' on a beach somewhere. Well I am as I live in Kilbarrack and Dollymount is just down the road. Bloody cold this time of year though.