Amateur v Professional Landlords.

Mad_maxx

4ensic15 wrote: »

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.

The state could have issued bonds on the private market for the purposes of funding construction, higher rate than what the ecb charge banks but still a good deal

It's an era of cheap credit and we should have utilised it more, instead we ramped up public sector wages again

Mad_maxx

hmmm wrote: »

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.

I wasn't talking about social housing arrangements, something altogether different where the tenant pays an unsubsidised rent, I'm coming at this from the point of view that prime location property is worth holding on to, what took place here waa a fire sale, not coming at it from a socialist standpoint either even it sounds like it

Dav010

JJJackal wrote: »

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 choosing

Sounds good, until the first state ordered eviction occurs.

Mad_maxx

Dav010 wrote: »

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.

Disagree about investing in REITs, capital appreciation trails the market to a pitiful degree and the yield is about 3%

Thr euro stoxx 50 ( Europe version of the Dow) will pay you that but with obvious diversification

REITs are only good for board directors

Mad_maxx

JJJackal wrote: »

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 choosing

Ten billion is half the social welfare budget annually, we had choices in the past several years, we chose to keep welfare and public sector conditions high, had the government bought those properties off the banks instead of letting the big funds in, the middle class in Dublin today might realistically be paying 1500 per month for a two bed house in Dublin 7 instead of 2300

Sometimes you just need some creative thinking, our lot decided to keep those living off the state sweet

Mad_maxx

beauf wrote: »

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.

Rent caps are about punishing landlords, not helping tenants

Useless left wing ideology for the sake of it

Lumen

Mad_maxx wrote: »

Disagree about investing in REITs, capital appreciation trails the market to a pitiful degree and the yield is about 3%

Thr euro stoxx 50 ( Europe version of the Dow) will pay you that but with obvious diversification

REITs are only good for board directors

The returns on REITs are not directly comparable to those of a small landlord, since a REIT investment is capital only, unleveraged by the investor, whilst landlording involves a mix of (typpically leveraged) capital and labour. Therefore the risk/returns are different in quality and quantity.

Or to put it another way: a small landlord typically is earning money from a mixture of their time/hassle and their exposure to large downside risks after leveraging a small capital outlay with a chunky, expensive mortgage (plus lumpy cashflow risks from non-compliant tenants), whereas a REIT investor is completely passive and only earning a return on their capital whilst other people do all the work.

I don't know how anyone can make BTL work in the current lending market, without expectations of massive capital appreciation.

Mad_maxx

Lumen wrote: »

The returns on REITs are not directly comparable to those of a small landlord, since a REIT investment is capital only, unleveraged by the investor, whilst landlording involves a mix of (typpically leveraged) capital and labour. Therefore the risk/returns are different in quality and quantity.

Or to put it another way: a small landlord typically is earning money from a mixture of their time/hassle and their exposure to large downside risks after leveraging a small capital outlay with a chunky, expensive mortgage (plus lumpy cashflow risks from non-compliant tenants), whereas a REIT investor is completely passive and only earning a return on their capital whilst other people do all the work.

I don't know how anyone can make BTL work in the current lending market, without expectations of massive capital appreciation.

I know all that in relation to REITs, I still stand by what I said about a broad based European wide equity fund delivering the same yield

REITs don't warrant the lack of diversification as yield is too low

The Student

mikemac2 wrote: »

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.

The cost of business is a factor of the sale price of any item or service. If the desired profit is not achievable then a supplier ceasing supplying.

So sorry no guilt trip merely stating business logic.

The Student

Mad_maxx wrote: »

I wasn't talking about social housing arrangements, something altogether different where the tenant pays an unsubsidised rent, I'm coming at this from the point of view that prime location property is worth holding on to, what took place here waa a fire sale, not coming at it from a socialist standpoint either even it sounds like it

Unfortunately the country needed money to plug the gap in the banks. We needed a functioning banking system to continue and the only way to get fresh capital into the banks was selling off the loan books they had.

The State due to the ECB rules and the Bailout could not increase our debt so the only option was to sell off the loan books for whatever we could get for them.

As a result of all of this we are now in a state of paralysis. On one side we have the State subsidizing rents via HAP, which has led to a floor on rents squeezing out those not entitled to HAP, left renting at high rates and therefore unable to save for a deposit.

We then have those who the state wants to give them their "Forever home" (a term that I have an issue with personally), we have an eviction process that clearly does not work be it either for non payment of mortgages, private rent or council rent.

We have politicians who refuse to deal with the issue and we have the idea that people should be entitled to be housed where they want. Yes people need to be housed nobody should be sleeping on the streets or in hotels or hubs etc, but everybody wants to live in Dublin.

Why don't we say yes we will house you but not necessarily in Dublin, surely people can start a fresh in a new location.

Old diesel

The Student wrote: »

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.

How about this.....

1) your contract with the company allows you to tell the manager that you will be needing a 4 percent pay increase every 12 months.

2) this applies no matter how stupidly high your current rate of pay is or the company ability to pay.

3) you want the current manager to compensate you for the failure of a previous manager to pay you properly in 2013. So you sulk that 4 percent every 12 months isn't enough.

When you are at silly rent levels pre 4 percent increase then some transparency and justification becomes necessary.

Like what are the costs that require a 10 to 15 percent increase.

Macha

JJJackal wrote: »

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 choosing

Well, as long as you assume a property lasts longer than 14 years.

One of the big advantages of the state owning the property is that it can actually be appropriate to the needs of the occupants. This is especialy the case for emergency housing, which currently consists largely of hotel rooms and B&Bs.

JJJackal

Dav010 wrote: »

Sounds good, until the first state ordered eviction occurs.

Sounds good? State ordered eviction aside, Where do we get 10-14 billion?

JJJackal

Macha wrote: »

Well, as long as you assume a property lasts longer than 14 years.

One of the big advantages of the state owning the property is that it can actually be appropriate to the needs of the occupants. This is especialy the case for emergency housing, which currently consists largely of hotel rooms and B&Bs.

If the property doesnt last 14 years, it would cost the state more to rebuild or gut it

Ensure the property is perfectly appropriate would cost more money?

Lumen

The Student wrote: »

Why don't we say yes we will house you but not necessarily in Dublin, surely people can start a fresh in a new location.

It's off-topic, but shifting people around isn't without major downsides, not least lack of support networks (family & friends) and lack of jobs, which risks creating or entrenching joblessness.

The causes of rising rents is lack of supply of all and any housing, regardless of who owns it, combined with increasing demand, the solution has to address that.

Given that we're a small English-speaking country in a massive free market for labour (EU + all the non-EU people we choose to let in), planning housing supply is always going to be problematic, not least due to elasticity of demand. People will move to where there are jobs and available housing. I'm not making a case for restricting immigration, just pointing out the consequences.

This is far from a uniqely Irish problem, housing affordability is a problem in most developed housing markets, but we have our own very specific institutional and cultural weaknesses that seem to prevent any effective policy response.

In any case, IMO foreign funds building housing is part of the solution, not part of the problem.

Old diesel

The housing model needs to change - there just isn't the money in people's pockets to keep the thing ticking over.

Looking at how we can reduce costs to supply is the next stage in my opinion.

But it needs an EVERY cost approach.

We can't just say - right let's make the A rated BER home a C rated BER if we are just going to throw the money saved into a higher land price instead.

Because there are actually wider benefits to an A1/A2 BER* rated home beyond "just being nice" the correct approach is for Govt to provide a grant to make up difference between a reasonable cost (to build and buy) home and the same home as an A2 BER.

Old diesel

Old diesel wrote: »

The housing model needs to change - there just isn't the money in people's pockets to keep the thing ticking over.

Looking at how we can reduce costs to supply is the next stage in my opinion.

But it needs an EVERY cost approach.

We can't just say - right let's make the A rated BER home a C rated BER if we are just going to throw the money saved into a higher land price instead.

Because there are actually wider benefits to an A1/A2 BER* rated home beyond "just being nice" the correct approach is for Govt to provide a grant to make up difference between a reasonable cost (to build and buy) home and the same home as an A2 BER.

*if done properly and not just do barely enough to scrape an A2 BER on the day of test. While real world performance is inferior

BarryD2

Eric Cartman wrote: »

professional landlords arent suited to many irish renters..........
rigid rules, ultra strict payment schedules...........

In other words, they won't take no sh*t.

Macha

JJJackal wrote: »

If the property doesnt last 14 years, it would cost the state more to rebuild or gut it

It's reasonable to assume a property is going to last at least 14 years.

JJJackal wrote: »

Ensure the property is perfectly appropriate would cost more money?

No, why would it? I'm saying it's just not possible to do so while relying on the private sector.

JJJackal

Macha wrote: »

No, why would it? I'm saying it's just not possible to do so while relying on the private sector.

See childrens hospital cost v one of the newer private hospital costs

Private sector management of an apartment complex is going to be cheaper than having the public sector managing it

Edgware

JJJackal wrote: »

See childrens hospital cost v one of the newer private hospital costs

Private sector management of an apartment complex is going to be cheaper than having the public sector managing it

Private sector management haveto watch the bottom line. They get competitive quotes from contractors not like the public sector looking after the same buddies all the time.

Geuze

Old diesel wrote: »

Looking at how we can reduce costs to supply is the next stage in my opinion.

But it needs an EVERY cost approach.

Yes x100.

Land/site costs
Finance costs
profit margins

All of these are excessive.

Old diesel

Geuze wrote: »

Old diesel wrote: »

Looking at how we can reduce costs to supply is the next stage in my opinion.

But it needs an EVERY cost approach.

Yes x100.

Land/site costs
Finance costs
profit margins

All of these are excessive.

The margin issue is apparently down to the requirements of lenders.

Each project needs a 20 to 25 percent margin to get finance.

It's a fairly significant sum in the context of a house that's to sell for 300 k.

Looking at it from a lender viewpoint I guess it reduces risk if a problem pops up.

The Student

Old diesel wrote: »

How about this.....

1) your contract with the company allows you to tell the manager that you will be needing a 4 percent pay increase every 12 months.

2) this applies no matter how stupidly high your current rate of pay is or the company ability to pay.

3) you want the current manager to compensate you for the failure of a previous manager to pay you properly in 2013. So you sulk that 4 percent every 12 months isn't enough.

When you are at silly rent levels pre 4 percent increase then some transparency and justification becomes necessary.

Like what are the costs that require a 10 to 15 percent increase.

The business you are employed in goes out of business, this is the normal cycle of business. However what we have is the State putting a floor on the min income a landlord can get, obviously the landlord will try to get as much income as possible that's business.

If the State did not put a min floor on the income landlords get then bidding wars for renting the property would not start.

The Student

Old diesel wrote: »

The housing model needs to change - there just isn't the money in people's pockets to keep the thing ticking over.

Looking at how we can reduce costs to supply is the next stage in my opinion.

But it needs an EVERY cost approach.

We can't just say - right let's make the A rated BER home a C rated BER if we are just going to throw the money saved into a higher land price instead.

Because there are actually wider benefits to an A1/A2 BER* rated home beyond "just being nice" the correct approach is for Govt to provide a grant to make up difference between a reasonable cost (to build and buy) home and the same home as an A2 BER.

Who funds this grant the Govt give? oh yes the tax payer again. The squeezed middle income who can't afford to buy and are not entitled to any State support.

Yeah we get left behind once again.

The Student

Lumen wrote: »

It's off-topic, but shifting people around isn't without major downsides, not least lack of support networks (family & friends) and lack of jobs, which risks creating or entrenching joblessness.

The causes of rising rents is lack of supply of all and any housing, regardless of who owns it, combined with increasing demand, the solution has to address that.

Given that we're a small English-speaking country in a massive free market for labour (EU + all the non-EU people we choose to let in), planning housing supply is always going to be problematic, not least due to elasticity of demand. People will move to where there are jobs and available housing. I'm not making a case for restricting immigration, just pointing out the consequences.

This is far from a uniqely Irish problem, housing affordability is a problem in most developed housing markets, but we have our own very specific institutional and cultural weaknesses that seem to prevent any effective policy response.

In any case, IMO foreign funds building housing is part of the solution, not part of the problem.

Its not off topic, the cost of property in Dublin is higher than other parts of the country because the land cost is higher. In theory the build cost of the same property in Dublin as elsewhere should be similar (save some additional costs to lay extra sewerage etc in remote areas).

Ireland is a relatively small country and relocating is possible, with our road network etc and the high ownership of cars people can still visit relatives etc.

The make up of our property sector does indeed need to change, smaller families, more single people, widows and widowers will want smaller properties as their circumstances change.

Foreign investors are indeed increasing the supply but at what cost, these investors are looking for a return on their investment and will continue to want one for the long term. Do you think they will have a social conscience? Ultimately they are only interested in profit.

Old diesel

The Student wrote: »

Old diesel wrote: »

The housing model needs to change - there just isn't the money in people's pockets to keep the thing ticking over.

Looking at how we can reduce costs to supply is the next stage in my opinion.

But it needs an EVERY cost approach.

We can't just say - right let's make the A rated BER home a C rated BER if we are just going to throw the money saved into a higher land price instead.

Because there are actually wider benefits to an A1/A2 BER* rated home beyond "just being nice" the correct approach is for Govt to provide a grant to make up difference between a reasonable cost (to build and buy) home and the same home as an A2 BER.

Who funds this grant the Govt give? oh yes the tax payer again. The squeezed middle income who can't afford to buy and are not entitled to any State support.

Yeah we get left behind once again.

There is actually a wider need (emissions/climate) to upgrade as many existing pre A/B rated BER rated homes as possible in terms of energy efficiency.

This will require grant aid as it's a big looking sum for a home owner otherwise to shell out..

We face big fines if we fail to hit our emissions targets.

Many other hard decisions face us in that whilst climate and emissions arena. Cutting cow numbers for example.

Sorry for the off topic - just illustrating a wider issue that justifys financial assistance.

Back on the landlord issue - there is clearly an issue with costs that Government needs to tackle.

Tax needs to be lower.

A scheme to restructure mortgage repayments needs consideration where landlords struggle with mortgage.

If you can't make money at current rents then there is a cost issue Govt needs to help with.

The taxpayers who rent just don't have the money landlords seem to need.

Landlords need to make a return so Govt needs to step in

the_syco

JJJackal wrote: »

See childrens hospital cost v one of the newer private hospital costs

Private sector can expand in the future when it gets more money.
Public sector gets everything day one, as future expansion may not ever come.

hmmm

On the REITs thing, the left can't have it both ways. If you disincentivise small landlords, the only way to get more supply of rental properties is from corporates. After bringing in rent caps and lots of new legislation, they are now turning their attention to get rid of corporates. All the while they are giving out about lack of supply.

handlemaster

Lumen wrote: »

It's off-topic, but shifting people around isn't without major downsides, not least lack of support networks (family & friends) and lack of jobs, which risks creating or entrenching joblessness.

The causes of rising rents is lack of supply of all and any housing, regardless of who owns it, combined with increasing demand, the solution has to address that.

Given that we're a small English-speaking country in a massive free market for labour (EU + all the non-EU people we choose to let in), planning housing supply is always going to be problematic, not least due to elasticity of demand. People will move to where there are jobs and available housing. I'm not making a case for restricting immigration, just pointing out the consequences.

This is far from a uniqely Irish problem, housing affordability is a problem in most developed housing markets, but we have our own very specific institutional and cultural weaknesses that seem to prevent any effective policy response.

In any case, IMO foreign funds building housing is part of the solution, not part of the problem.

you fooling yourself if you think someone unemployed all their life has any intention of ever working.