Renting in Dublin

Wesser

lustig2014 wrote: »

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

It's very simple. He has to pay tax of 40% on 1200.

Ok... it more complicated than that. As detailed above.
But in summary , you pay 40% of all the money you earn back to revenue.

What's not to understand?

Wesser

lustig2014 wrote: »

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

It's very simple. He has to pay tax of 40% on 1200.

Ok... it more complicated than that. As detailed above.
But in summary , you pay 40% of all the money you earn back to revenue.

What's not to understand?

Samuel T. Cogley

Wesser wrote: »

It's very simple. He has to pay tax of 40% on 1200.

Ok... it more complicated than that. As detailed above.
But in summary , you pay 40% of all the money you earn back to revenue.

What's not to understand?

In fairness again most people find it hard to wrap their heads around it, they think it works thus.

14400

Tax bill 5967.50
LESS Mortgage interest
LESS Etc.

Actual Taxbill = feck all
14400 - feck all
= Beaches and margaritas!

Anything 'written off' is only at around 50% paid for coming off tax. I know you know that BTW just inserting how some people see it in my view.

Browney7

CIARAN_BOYLE wrote: »

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.

Or put another way, they pay just over 1000 to pay down 5400 debt.

Not saying it's right or wrong but LLs who are on trackers who should be on BTL rates are more than likely getting a taxpayer subsidy on their interest payments (if it's a state owned bank they owe money to).

Samuel T. Cogley

Browney7 wrote: »

Or put another way, they pay just over 1000 to pay down 5400 debt.

Not saying it's right or wrong but LLs who are on trackers who should be on BTL rates are more than likely getting a taxpayer subsidy on their interest payments (if it's a state owned bank they owe money to).

If a large number of LL's weren't on trackers - something acknowledged by LL's groups the price of a one bed in Dublin CC would be North of €1750 a month.

AFAIK and I rely on boards for this info, funds at the moment are costing banks about 1% so they're breaking even on trackers.

CIARAN_BOYLE

Browney7 wrote: »

Or put another way, they pay just over 1000 to pay down 5400 debt.

Not saying it's right or wrong but LLs who are on trackers who should be on BTL rates are more than likely getting a taxpayer subsidy on their interest payments (if it's a state owned bank they owe money to).

Not to mention the the risk of a bad tenant and ending up €25k in the hole (18 months missed rent, legal fees, and time off taken to attend hearings).

Samuel T. Cogley

Just to make my position clear rents are about right at the moment given trackers, the tenant-sided regulatory regime and tax burdens. That's not a good place to be in for the majority of people. It should not cost €1500 for a decent 1 bed place.

audi5

DubCount wrote: »

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.

Just to add to the list, OP here has to subsidise sitting tenants. Thats what rent controls do. Anyone that is new in the rental market or looking to move is effectively subsidising those who don't have to move and are paying below market rents. This is due to reduction in supply brought on by rent control and other pro-tenant measures moves by the government.

lustig2014

I accept that landlords need to cover themselves against a bad tenant, but why should every single tenant in the rental market pay a premium as a result of this.

Buying a property, like any investment, is a risk. The investment can go up or down. When you buy shares in a company, you cant demand a higher dividend to "insulate" you against the risk of your investment suffering. Why should it be any different for renting.

What you have is landlords using tenant cash to pay down the capital of their mortgage. Its dead money to the tenant and the landlord is further down the road to owning an asset outright with very little endeavour

Samuel T. Cogley

lustig2014 wrote: »

I accept that landlords need to cover themselves against a bad tenant, but why should every single tenant in the rental market pay a premium as a result of this.

Buying a property, like any investment, is a risk. The investment can go up or down. When you buy shares in a company, you cant demand a higher dividend to "insulate" you against the risk of your investment suffering. Why should it be any different for renting.

What you have is landlords using tenant cash to pay down the capital of their mortgage. Its dead money to the tenant and the landlord is further down the road to owning an asset outright with very little endeavour

Renting a property is somewhere between shares and running a business. Also the government does not insist that if a stock starts to tank you hold onto it for 18 months, it's gone that day if you want unlike a bad tenant. The actual property is the element that goes down as well as up in value. To torture the analogy further there is nothing to stop an investor buying more shares with their dividends.

Every other business runs with the benefit of Limited liability, separate legal personality, 100% relief on debt and preferential tax rates. Of course the customer picks up the slack the same as any business.

lustig2014

Can't see where you're getting 18 months from, from what I can see the maximum notice period is 32 weeks, which is only for tenancies over 8 years.

Also the following exceptions apply

If you are not keeping your obligations, your landlord only needs to give you 28 days’ notice, regardless of the length of your tenancy. However, if your behaviour is seriously anti-social or threatens the fabric of the property, the landlord only needs to give you 7 days’ notice. Section 17 (1) (a) and (b) of the 2004 Act sets out the type of seriously anti-social behaviour for which a 7-day notice may be allowed.

Samuel T. Cogley

lustig2014 wrote: »

Can't see where you're getting 18 months from, from what I can see the maximum notice period is 32 weeks, which is only for tenancies over 8 years.

Also the following exceptions apply

If you are not keeping your obligations, your landlord only needs to give you 28 days’ notice, regardless of the length of your tenancy. However, if your behaviour is seriously anti-social or threatens the fabric of the property, the landlord only needs to give you 7 days’ notice. Section 17 (1) (a) and (b) of the 2004 Act sets out the type of seriously anti-social behaviour for which a 7-day notice may be allowed.

Notice, RTB tribunal, then court. Court will invariably give the tenant more time. The whole process is 12-18 months sometimes a bit quicker, sometimes a bit longer. You, as an individual, can't put someone out there has to be a court order.

Even so let's say a law came in saying 30 days - you still don't have to keep a stock that long, and a stock won't **** in bin bags and leave it for you to clean up.

lustig2014

Fair enough - I'm sorry to hear about that experience, sounds awful.

But like most of the posters on this thread you seem to be using individual examples of negative tenant experiences to justify high rents across the market.

Average rent in Dublin is the fifth highest in Europe, rents increasing six times faster than EU average. Where is it going to end?

Pelvis

It's simple economics. Supply and Demand, supply goes down demand goes up along with the price. Many are accidental landlords still in negative equity, why on earth would they not get as much as they can while they can?? I'm speaking as someone who is not a LL and who pays a small fortune in rent to live in a small flat and another small fortune just to heat the damn thing.

The market justifies the rent costs, not the landlords, you can blame the government for that.

Samuel T. Cogley

lustig2014 wrote: »

Fair enough - I'm sorry to hear about that experience, sounds awful.

But like most of the posters on this thread you seem to be using individual examples of negative tenant experiences to justify high rents across the market.

Average rent in Dublin is the fifth highest in Europe, rents increasing six times faster than EU average. Where is it going to end?

It's going to end where it ends in all jurisdictions with LL's making a profit and accidental LL's breaking even. I've no qualms whatsoever with saying it's a mental situation but the underlying issues created by government are much more to blame than greedy LL's.

audi5

lustig2014 wrote: »

Fair enough - I'm sorry to hear about that experience, sounds awful.

But like most of the posters on this thread you seem to be using individual examples of negative tenant experiences to justify high rents across the market.

Average rent in Dublin is the fifth highest in Europe, rents increasing six times faster than EU average. Where is it going to end?

Until there is a reduction in demand for rental property (i.e. recession/job losses/emigration/government building social housing etc) or until there is an increase in rental supply and landlord compete with each other to get the tenant. Economics 101.

It will not happen with rent controls or with more tenant friendly legislation, or with sky high taxation in this country or with everything government has done so far that encourages reduced rental supply. It will not even happen with more house building (if no one is going to buy them and put them on the market for rent).

lustig2014

Pelvis wrote: »

It's simple economics. Supply and Demand, supply goes down demand goes up along with the price. Many are accidental landlords still in negative equity, why on earth would they not get as much as they can while they can?? I'm speaking as someone who is not a LL and who pays a small fortune in rent to live in a small flat and another small fortune just to heat the damn thing.

The market justifies the rent costs, not the landlords, you can blame the government for that.

Its supply and demand operating in a completely messed up market. Government refuses to build new houses so as not to interfere with private contractors, who only want to build homes out of reach for most people.

Lux23

KellyXX wrote: »

.

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.

But there would be more families evicted because they couldn't afford the exorbitant rents, but hey as long as landlords can keep filling their pockets the market is working.

KellyXX

Lux23 wrote: »

But there would be more families evicted because they couldn't afford the exorbitant rents, but hey as long as landlords can keep filling their pockets the market is working.

Right now you have people staying where they don't want to be staying, constraining supply. Not to mention properties going short term let's or being taken off the market altogether. And that equals queues out the door at viewings.

Lumen

lustig2014 wrote: »

...private contractors, who only want to build homes out of reach for most people.

Builders don't want to build expensive homes, they want to make a profit. If they could sell houses profitably to 10x as many people they would do so (like in the boom), but some combination of lack of capacity, restricted development opportunities, high construction costs, government taxes and levies and so on is incentivising them to aim at a certain segment of the market.

You can't outsource a problem to the market and then expect a socially beneficial outcome.

tbh the price of new housing doesn't really matter in and of itself. If it sells it's cheap enough. The problem is the low volume of housing completions. If the demand from rich people was met solely by new builds, all the existing stock would change hands for reasonable money.

Location aside, it's right that new build housing is more expensive than existing stock, because it's generally of higher quality.

catrionanic

Well this thread has been enlightening, as to the profits for landlords! Does anyone know what a typical BTL interest rate is? Say for 70% LTV?

DubCount

catrionanic wrote: »

Well this thread has been enlightening, as to the profits for landlords! Does anyone know what a typical BTL interest rate is? Say for 70% LTV?

Ulster Bank is 4.95% at the moment (Variable Buy2Let).

The thread is about the cost and difficulty in renting in Dublin. You cant explain the shortage of supply without discussing the profits (or lack thereof) of being a landlord.