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Amateur v Professional Landlords.
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Which people? Where are they expressing these opinions? I haven't seen them.
From my perspective, the main macro advantage (to the State, and therefore the country, sort of) of institutional investors is that they are, in principle, easier to regulate and tax. I do appreciate that in practice the REITs pay no tax right now, but this is a policy choice rather than any kind of inevitability.
A lot of the banking problems we saw in the the crash were with lending to small BTLs. It was difficult to move against them because they were people in the economy who were, to varying degrees, as screwed or more than everyone else. Their debts were often a complicated mess of cross-collaterilisation and personal guarantees (enabled by the banks, in fairness). That is one reason for the State to want to encourage the funds in - zero risk to the banks.
So if I was in government or at the central bank, looking forward to the next crash, I'd be super keen on having a large amount of the one and two bed apartments owned by foreign investors, because if and when the crash comes, all that young, single. foreign labour that has driven up demand in the city centre will be out of here in a shot, and you don't want that overhang of supply financed by small landlords creating another banking crisis.
The flip side of the macroprudential benefit is that when the economy is not in crisis, the institutions represent an outflow of wealth from the country. Is this bad? I don't know, maybe it represents some kind of counter-cyclical benefit.
Another benefit is that they have access to cheap capital, and so are capable of substantial investments to bring new housing at scale.
With all due respect, renters in Dublin are less concerned about the macroeconomic benefits of higher tax takes, and more concerned about 17% increases in rent and guaranteed yearly increases.
I do agree that maintenance of blocks of rental properties owned by the same corporate may be better than those owned individually, no MC meetings, failure to pay subscriptions etc.
I’d be interested in what think the benefits of corporate money flowing out of the country would be.0 -
Diversification and counter-cyclical balancing. That outflow is only one part of the picture. The would-be small landlords who it's claimed are being pushed out of the system can either invest in REITs or other asset classes.I’d be interested in what think the benefits of corporate money flowing out of the country would be.0 -
Diversification and counter-cyclical balancing. That outflow is only one part of the picture. The would-be small landlords who it's claimed are being pushed out of the system can either invest in REITs or other asset classes.
And that helps a tenant currently paying €2k pm, or a new tenant paying 17% more how? Do you think diversification and counter-cyclical balancing will make it easier for the average tenant to pay rent?0 -
My experience of professional landlords is overwhelmingly positive.
Maybe a bit more expensive, but a far higher level of professionalism, they actually know what they are doing, fix issues very quickly and contrary to the popular belief and narrative pushed on here, actually display a level of flexibility with their tenants.
The idea that professional landlords are the only landlords that increase rents as often as they can is of course total nonsense.0 -
Bringing in investors with large amounts of foreign capital and de-coupling the performance of the local property market from the personal fortunes of our ageing population makes it more likely that we can increase supply without risking another massive blow-up.And that helps a tenant currently paying €2k pm, or a new tenant paying 17% more how? Do you think diversification and counter-cyclical balancing will make it easier for the average tenant to pay rent?
So yes, over time it should help.0 -
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Bringing in investors with large amounts of foreign capital and de-coupling the performance of the local property market from the personal fortunes of our ageing population makes it more likely that we can increase supply without risking another massive blow-up.
So yes, over time it should help.
And you would not be at all concerned about corporate investors monopolising the market and being in a position to distort the rate of rental increases? As these investors are able to set rental rates on first time lets, the bar gets pushed upward for those that follow each time a new development becomes available for rent.
The ageing population, by that I assume you mean pre-bust small investors are exiting the market at an understandably alarming rate, and small investors of any age are not investing due to the issues associated with tenancies, lack of available properties and difficulties with obtaining credit.
If you believe that benefits society, I’d like you to explain how it benefits the tens of thousands paying high, and about to get much higher rents.0 -
The experience of my renter friends (who pay their rent on time and don't cause property damage) seems to be that corporate-ly managed blocks of apartments are much better run than the apartments and houses they've rented from small landlords, which suffer from neglect and lazy remediation.
For instance, any issues with the property are often dealt with under 24 hours, as opposed to weeks or never with small landlords, and when they move out there has been more flexibility over timing because the institutional landlord is able to fill the vacancy within a shorter period of time.
Now this may be a question of efficiency of scale, and also that new, large blocks suffer from fewer maintenance issues, but I really struggle to see anecdotal evidence to support the vitriol against insitutional landlords (which I see on social media more than here TBH).
I expect the way the market will evolve over time is that the institutional landlords and good tenants tend to choose each other, leaving the tenants with more chaotic lives to the badly managed properties run by small landlords who offer more flexibility but also worse property management.
Which is exactly how things normally work in other sectors, like finance. The poor and those who can't keep their life together sufficiently to appeal to the institutions end up with the smaller operators who provide worse product (high interest rates in the case of finance, shabby, damp old badly-maintained properties in the case of landlords.
And this is also my experience of renting in the UK when I was youjnger.
Great analysis. I have some friends that are of the same mindset due to experiences of private ll, they did pay more for this "extra" service however. Personally i hope it doesnt turn out this way as i want to deal with professionals myself so i know what to expect from them rather than people that are less than savory. I can see it going your way though as some ll shouldnt be in the market at all and give the rest of us a bad name.
I was talking to a tenant recently where it took them 6 months to get a new lawnmower. There was a leak in the tiles in the bath where it took ll close to 1 year to get it fixed. Tenant was good with hands and advised ll and eventually the ll tried to blame the tenant for the amount of damage caused by water. In the end it had to be completely re tilled which should have just been a small job if fixed on time.0 -
And you would not be at all concerned about corporate investors monopolising the market and being in a position to distort the rate of rental increases? As these investors are able to set rental rates on first time lets, the bar gets pushed upward for those that follow each time a new development becomes available for rent.
I'm not sure what you mean by "monopolising". Do you mean that they are acting as a cartel? That would be illegal.The ageing population, by that I assume you mean pre-bust small investors are exiting the market at an understandably alarming rate, and small investors of any age are not investing due to the issues associated with tenancies, lack of available properties and difficulties with obtaining credit.
If you believe that benefits society...
I have already described how encouraging diversification away from local property is good for investors and for society.
Those issues you highlight are nothing to do with institutional investors, which is what this thread is about, they're mostly about the way in which the State has chosen to regulate tenancies.I’d like you to explain how it benefits the tens of thousands paying high, and about to get much higher rents.
I've answered that already.0 -
I'm not sure what you mean by "monopolising". Do you mean that they are acting as a cartel? That would be illegal.
I have already described how encouraging diversification away from local property is good for investors and for society.
Those issues you highlight are nothing to do with institutional investors, which is what this thread is about, they're mostly about the way in which the State has chosen to regulate tenancies.
I've answered that already.
No, monopolising means they have the greatest share, or dominate a sector, a cartel would be where they get together to keep prices at a high level. There is a significant difference between the two.
According to the article I posted, corporate investors are buying significant amounts of new developments, this will allow a few huge landlords to dominate the sector and therefore the rental price, not necessarily by association.
As a REIT investor it would be music to my ears to hear that the fund will increase incomes from current levels by 17% in some areas and guarantee a yearly 4% increase in others.
But that is not what the op is about, it is about the effect of rentals caused by corporate investors buying up huge complexes.
And no you haven’t answered my question, how do the macroeconomic benefits of corporate investors help tenants. Unless you see 17% increase and guaranteed 4% thereafter as something a tenant should be thankful for, I don’t see the benefit. Enlighten me please.0 -
Which people? Where are they expressing these opinions? I haven't seen them.
From my perspective, the main macro advantage (to the State, and therefore the country, sort of) of institutional investors is that they are, in principle, easier to regulate and tax. I do appreciate that in practice the REITs pay no tax right now, but this is a policy choice rather than any kind of inevitability.
A lot of the banking problems we saw in the the crash were with lending to small BTLs. It was difficult to move against them because they were people in the economy who were, to varying degrees, as screwed or more than everyone else. Their debts were often a complicated mess of cross-collaterilisation and personal guarantees (enabled by the banks, in fairness). That is one reason for the State to want to encourage the funds in - zero risk to the banks.
So if I was in government or at the central bank, looking forward to the next crash, I'd be super keen on having a large amount of the one and two bed apartments owned by foreign investors, because if and when the crash comes, all that young, single. foreign labour that has driven up demand in the city centre will be out of here in a shot, and you don't want that overhang of supply financed by small landlords creating another banking crisis.
The flip side of the macroprudential benefit is that when the economy is not in crisis, the institutions represent an outflow of wealth from the country. Is this bad? I don't know, maybe it represents some kind of counter-cyclical benefit.
Another benefit is that they have access to cheap capital, and so are capable of substantial investments to bring new housing at scale.
All the housing agencies and people that expect something for nothing are the people that are expressing their opinions. There is hope that corporate ll will be better than private ll and when they eventually realize that yes the service they provide is better but the cost is also greater, they may have second thoughts on this. Again im not against corporate ll, its good for competition however we just need to be careful with what the government are pushing and i hope everyone has their eyes wide open and know both the Pros and Cons of corp ll.
I think i both agree and disagree with your next comment. Yes BTL did have an impact on the market but i dont think its as great as you make it out to be. I think BTL are more known to the public as they are easier to reposes vs a PPR.
I agree with the rest of your statement.0 -
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Davo, i didnt think this thread was about tenants though. Its more about corp ll vs private ll.0
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Couple of things about this. There is no doubt that corporates improve supply for rental market, that much is obvious as buying full developments prevents sales to owner occupiers. But I notice he made no mention of rental increases which would apply to all units in each new fully owned development. Also, he said small owners make up most of the market, what he failed to say was that in Dublin where demand and prices are highest, over 3000 units were bought by corporates last year, triple the number the previous year. This is a trend which is likely to continue in Dublin where demand and rents are highest, corporates aren’t interested in buying outside cities.
I do agree that in terms of conditions, professionalism in how complexes are run and maintained is better in corporate owned blocks, but that will come at a huge ever increasing cost to tenants. If tenants accept those higher prices in return for the benefits, everyone is happy.0 -
Which people? Where are they expressing these opinions? I haven't seen them.
From my perspective, the main macro advantage (to the State, and therefore the country, sort of) of institutional investors is that they are, in principle, easier to regulate and tax. I do appreciate that in practice the REITs pay no tax right now, but this is a policy choice rather than any kind of inevitability.
A lot of the banking problems we saw in the the crash were with lending to small BTLs. It was difficult to move against them because they were people in the economy who were, to varying degrees, as screwed or more than everyone else. Their debts were often a complicated mess of cross-collaterilisation and personal guarantees (enabled by the banks, in fairness). That is one reason for the State to want to encourage the funds in - zero risk to the banks.
So if I was in government or at the central bank, looking forward to the next crash, I'd be super keen on having a large amount of the one and two bed apartments owned by foreign investors, because if and when the crash comes, all that young, single. foreign labour that has driven up demand in the city centre will be out of here in a shot, and you don't want that overhang of supply financed by small landlords creating another banking crisis.
The flip side of the macroprudential benefit is that when the economy is not in crisis, the institutions represent an outflow of wealth from the country. Is this bad? I don't know, maybe it represents some kind of counter-cyclical benefit.
Another benefit is that they have access to cheap capital, and so are capable of substantial investments to bring new housing at scale.
The state also had - has access to cheap capital, the state should have bought all those properties the REITs grabbed as part of a capital spending programme, would be better than ramping up public sector wages again, they could have then set up long term leases but not for 400 euro per month ala social housing, prime urban centre property should be viewed as part of the national pension fund programme
Norway has a big stake in its energy industry, no reason our sovereign wealth fund could not involve prime real estate
We really missed a trick0 -
The state also had - has access to cheap capital, the state should have bought all those properties the REITs grabbed as part of a capital spending programme, would be better than ramping up public sector wages again, they could have then set up long term leases but not for 400 euro per month ala social housing, prime urban centre property should be viewed as part of the national pension fund programme
Norway has a big stake in its energy industry, no reason our sovereign wealth fund could not involve prime real estate
We really missed a trick
The state is over borrowed and is over-borrowed because of bailing out banks who invested in property. the state can't borrow for the purpose of building housing nor allow the banks to finance building.0 -
The state is over borrowed and is over-borrowed because of bailing out banks who invested in property. the state can't borrow for the purpose of building housing nor allow the banks to finance building.
State could, but Irish don't like stuff like repossessions. Acceptance of moral hazard has it's consequences.0 -
The state has no interest in borrowing vast amounts of money for houses, handing them out for free, receiving very little in return and having to have a mountain of well paid staff available to change a lightbulb every time a tenant rings it in. That's been obvious for a while, the state doesn't want the hassle and I can't really blame them.The state also had - has access to cheap capital, the state should have bought all those properties the REITs grabbed as part of a capital spending programme, k
Institutional landlords are a good thing in my books, but the ones we have currently are all targeting the same group - generally younger with lots of disposable income who want a really nice apartment. The headlines talking about these apartments not being offered for sale are unfair - the apartments would never have been built if the institutional landlord hadn't given the builder the finance.
What we're missing in my view is the level below - what we need I think is the state to pay institutional landlords (these could be charities) to build and operate large numbers of small (lots of 1 beds with some 2 bed) apartments with a fairly minimal finish, but offering everything a single person or couple with no or low income should need. There'll be no granite worktops, but a bedroom, balcony, washing & drying facilities, a small kitchen, small livingroom would suit an awful lot of people.0 -
Join Date:Posts: 6185
It's not like the alternative approach has turned out to be cheap. The Irish state paid €700m to private landlords last year. That's up from €490m in 2008. At that rate we're on track for spending €1bn a year pretty soon.The state has no interest in borrowing vast amounts of money for houses, handing them out for free, receiving very little in return and having to have a mountain of well paid staff available to change a lightbulb every time a tenant rings it in. That's been obvious for a while, the state doesn't want the hassle and I can't really blame them.
I don't think these figures include payments to hotels and B&Bs for emergency accommodation.0 -
The state has no interest in borrowing vast amounts of money for houses, handing them out for free, receiving very little in return and having to have a mountain of well paid staff available to change a lightbulb every time a tenant rings it in. That's been obvious for a while, the state doesn't want the hassle and I can't really blame them.
Institutional landlords are a good thing in my books, but the ones we have currently are all targeting the same group - generally younger with lots of disposable income who want a really nice apartment. The headlines talking about these apartments not being offered for sale are unfair - the apartments would never have been built if the institutional landlord hadn't given the builder the finance.
What we're missing in my view is the level below - what we need I think is the state to pay institutional landlords (these could be charities) to build and operate large numbers of small (lots of 1 beds with some 2 bed) apartments with a fairly minimal finish, but offering everything a single person or couple with no or low income should need. There'll be no granite worktops, but a bedroom, balcony, washing & drying facilities, a small kitchen, small livingroom would suit an awful lot of people.
The effort to do what your suggesting is about 90% the effort of much more profitable higher end properties. It doesn't make any sense for a private company.
Social or affordable housing will run at a loss. No one including the govt wants to provide it. But the govt has an obligation to provide it. That's the difference. Thus far they've managed to deflect their in action in this area.0 -
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Yeah tenants countrywide are all overflowing with regret that we complain about amateur landlords who dodge tax, refuse repairs, let themselves into your gaff as they please, perform illegal evictions, abuse loopholes in legislation, I could go on
As if the amateurs are less likely to raise rent. They're more likely to not even know what they can raise it to and try to go above it.
It really doesn't matter if they're big fish or small, they have the same unscrupulous aims, the same greed, the same disregard for people who simply need somewhere to live.
What we need are country wide rent caps, end of.0 -
Always Tired wrote: »Yeah tenants countrywide are all overflowing with regret that we complain about amateur landlords who dodge tax, refuse repairs, let themselves into your gaff as they please, perform illegal evictions, abuse loopholes in legislation, I could go on
As if the amateurs are less likely to raise rent. They're more likely to not even know what they can raise it to and try to go above it.
It really doesn't matter if they're big fish or small, they have the same unscrupulous aims, the same greed, the same disregard for people who simply need somewhere to live.
What we need are country wide rent caps, end of.
Very interesting insight.
According to most articles about REITS/corporate investors, they currently pay little or no tax, have been known to evict whole blocks so they can refurbish/sell and there has been posts on here where tenants could not get deposits back, same as with the amateurs. A very nice “loophole” for a corporate is the much lower rate corporation tax they will pay when compared to amateur Landlords taxed at the standard rate.
Amateurs may or may not raise the rent, Corporates will, as a poster said earlier, at an AGM investors were guaranteed they would. There has also been posts on here that the agents for corporates have served illegal rent increases, sometimes for the wrong amounts.
And to cap it off as you say, all landlords want a profit, you are using their asset, you call it greed, they call it business, it’s not philanthropy.
Right now, as someone posted earlier, the thing to do for amateur landlords is to sell up an invest in a REIT. By guaranteeing yearly rental increases, the rate of return on any investment is likely to be better than any bank and you don’t have to deal with tenants who think you are a greedy, tax dodging intruder.0 -
Always Tired wrote: »...
What we need are country wide rent caps, end of.
Have rent caps worked. No. So you want more of them. Makes perfect sense.
What is needed is supply, competition. So people have options to choose a better place. At the moment we penalise a good landlord and reward a bad one. That's the system in place.0 -
...And to cap it off as you say, all landlords want a profit, you are using their asset, you call it greed, they call it business.
It's called the private rental market.
https://en.m.wikipedia.org/wiki/Private_rented_sector0 -
State could, but Irish don't like stuff like repossessions. Acceptance of moral hazard has it's consequences.
The ECB won't allow the national debt to rise. That is particularly so if it is for property investment. The banks are reducing their exposure to property as per ECB directions. The vultures are moving into the vacuum.0 -
Always Tired wrote: »Yeah tenants countrywide are all overflowing with regret that we complain about amateur landlords who dodge tax, refuse repairs, let themselves into your gaff as they please, perform illegal evictions, abuse loopholes in legislation, I could go on
As if the amateurs are less likely to raise rent. They're more likely to not even know what they can raise it to and try to go above it.
It really doesn't matter if they're big fish or small, they have the same unscrupulous aims, the same greed, the same disregard for people who simply need somewhere to live.
What we need are country wide rent caps, end of.
Lets examine your idea of rent caps.
If your manager in work came to you and said I want you to work extra hours but I am not going to pay you. Would you. The majority of people would say no.
So you want a landlord to have additional costs, be they interest rate increases, new taxes, increased repairs, but you want the landlord to be restricted on what he can increase the rent by.
Do you not see how rent caps act as a disincentive to landlords to invest further in the property if they can't get a return on this extra investment.
We already have a large amount of protection for tenants and you now want more. What exactly do you think will happen if you bring rent caps in. Private landlords will just leave the market and tenants will be left at the mercy of institutional landlords.
Be careful what you wish for, once institutional landlords get a large enough slice of the rental market then tenants will really suffer and there wont be a thing the Govt can do about it.0 -
The Student wrote: »So you want a landlord to have additional costs, be they interest rate increases, new taxes, increased repairs, but you want the landlord to be restricted on what he can increase the rent by.
Interest rates increases and tax increases have nothing to do with a tenant. How does that poster want them to increase? Refuse repairs isn’t the same as increased repairs. Many are valid requests that can get ignored
Bit of a guilt trip tbh.0 -
Interest rates increases and tax increases have nothing to do with a tenant. How does that poster want them to increase?
Bit of a guilt trip tbh
You are right, and he/she doesn’t, but the point is well made, fixing the price you can charge for a service while the costs of providing that continue to rise is hardly an incentive for the service provider. More landlords exit the market, less supply.0 -
It's not like the alternative approach has turned out to be cheap. The Irish state paid €700m to private landlords last year. That's up from €490m in 2008. At that rate we're on track for spending €1bn a year pretty soon.
I don't think these figures include payments to hotels and B&Bs for emergency accommodation.
How much would it cost the state to own the property it paid 700 million euro in rent for?
I think conservative estimate is 10 billion (not including the day to day running costs which are always higher when the state owns the property than a private landlord - lets say 1 billion to run and maintain about 30,000 to 40,000 properties - these properties will need to be done up every few years - have everything to the highest standard- plus a suite of staff employed to take calls coordinate...); but more likely closer to 14 billion (plus 1 billion).
One of the many advantages to the state is they can vacate any of these properties at a time of their choosing0 -
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.. More landlords exit the market, less supply.
That was true for a while. I suspect that smaller Landlords will eventually be replaced be fewer larger landlords. Supply is increasing but very slowly. It's mostly at the high end though and new rentals. Which is why rents continue to rise.0
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