Rent freeze?

beauf

Small Landlord didn't want social housing. They were forced to take it on.

jimmycrackcorm

beauf wrote: »

The private rental market in its entirety is not a solution to social or affordable housing. Small LL or REITs same difference.

The seeds of the housing crisis across the world were sown when that paradigm changed.

The problem with government built housing is that instead of paying as you go for housing, public social housing is effectively handing over 300k windfalls permanently to social tenants and then paying them also the rent that is received.

Once you're in a council house, it's yours for life and very likely done of your kids will get to live there after.

beauf

There is no other choice.

Outsourcing it to the private market is a epic failure.

AlmightyCushion

ted1 wrote: »

So then why not deduct it from your ridiculous figures 674 goes to 451 very fast.

I agree the figures are ridiculous. Those figures were designed to show how good an investment it would be if a landlord was cashflow neutral.

Grumpypants wrote: »

Here you go, tax break to start a little widget company. Then you can also write off loads of stuff like wages, rates, rent and travel expenses, unlike landlords.

https://www.revenue.ie/en/starting-a-business/initiatives-for-startup-businesses-and-smes/tax-relief-for-new-startup-companies/index.aspx

And at no point will the government try to introduce legislation to limit the amount you can charge for your widget. Unlike landlords.

Single house landlords makes up the majority of the market. Giving a tax credit for 10k if you charge 10k in rent. (If you charge 10,001 you pay tax on it all) Ensures the rent reduction is passed down.

I could take that €400 hit and make a better return. The tenant would have €400 extra. In my case that tenant is actually the government as I provide social housing.

So you get a functioning market where people can make a modest but fair return. An affordable market where people can rent a home. You reduce the cost of social housing by millions. You get more money in the ecconomy, you get more houses being built, you get more people moving here as it has a normal cost of living.

But screw that idea. Lets tax landlords out of the market. Give huge tax breaks to their competition, the offshore companies who flood billions out of the country. They then Jack up rent prices to maximize their return. Making housing unaffordable and putting thousands of people out on the streets.

Most landlords don't pay corporation tax as they are not set up as a company, they are sole traders. I assume you could set up as a company if you like but that is actually more tax inefficient. If my widget company was operated as a sole trader I would also not be able to use that tax relief.

Off the top of my head the government already limit what taxi drivers can charge and the fees PRSA providers can charge. There may be other situations.

The Student

Geuze wrote: »

Yes, many people make this mistake.

An investment property may be cashflow negative, due to capital repayments.

But those capital repayments are saving, and are building up the acquisition of an asset.

Many landlords are massively profitable, but may be cashflow negative, as cash is being saved / used to repay debt.

Remember profit is only paper profit until an asset is disposed of and all assets are carried at a fig in accounts based on the estimated value of the asset at the reporting date.

if the property has been carried in the accounts at a figure higher than its realisable value and you have been subsiding the mortgage payments with your own money (other than the rental income) then only when the asset is disposed of will you finally see if it is profitable or not.

Baby01032012

I thought this was a thread on rent freezes...it’s been side tracked by an argument between two posters over who’s figures are correct on investment returns.

Fol20

Baby01032012 wrote: »

I thought this was a thread on rent freezes...it’s been side tracked by an argument between two posters over who’s figures are correct on investment returns.

Just getting back on track as well. What are the odds that this will fully pass and become law?

I had not increase rents with the Rpz as I just saw that if I have not increased rent for x years. When they leave. I can up the rent. With this. It would screw me over a good bit when tenants leave

DubCount

Fol20 wrote: »

What are the odds that this will fully pass and become law?

Pretty low I would say. To me it looks more like FF trying to push for an election on a populist issue and creating a differential between FF and FG when the politicians hit the doorsteps in the coming months.

Having said that, I cant understand any LL not upping rent to the maximum at the moment. LLs with a good relationship with good sitting tenants got bitten once when the RPZs came in - they have only themselves to blame if it happens them again.

Idbatterim

From reading way too many articles on the housing crisis and actally taking a second to consider it , it’s so bloody obvious , that the “ homeless “ issue can’t be solved etc and the government are screwed because they aren’t being honest , because you can’t steap the truth in this country. The insane price of housing , is going to ensure that there is a never ending conveyor belt of people looking for social housing. I mean you don’t have to be gaming the system , they are giving many people a no stresss lotto windfall , while the other fools live in the back arse of no where , enduring a **** commute and a much reduced standard of living ...

The mother is looking at renting out a property and relocating to the other family home, yet we’d be fully supportive of this. Investment will stop because the profits they make on btr etc will go from being obscene to fractionally less obscene, so they’ll cut off their nose to spite their face ? Put on an appropriate site value tax , that will sort that. The way other non banana republics have had for decades

handlemaster

beauf wrote: »

There is no other choice.

Outsourcing it to the private market is a epic failure.

It's a failure because of the tenants and the power they have not to pay. To create a nightmare for residents run up large debts have the full backing of the PRTB and then repeat it all over again . The private landlord is taking all the risk and the government just heaps more legislation and taxes on just so that they can be seen to be doing something. The average indo reading Joe and Mary lap this up and dont realise it only makes housing worse.

handlemaster

DubCount wrote: »

Pretty low I would say. To me it looks more like FF trying to push for an election on a populist issue and creating a differential between FF and FG when the politicians hit the doorsteps in the coming months.

Having said that, I cant understand any LL not upping rent to the maximum at the moment. LLs with a good relationship with good sitting tenants got bitten once when the RPZs came in - they have only themselves to blame if it happens them again.

Totally agree with the charging the max rent possible and at the earliest point. There will be not thank you letter for keeping rent lower than market rate from the revenue come looking for their 50%tax

CalamariFritti

Shocker: landlords against rent freeze

Claw Hammer

Rent freezes don't work and have never worked. The incumbent tenants gain and landlords and prospective tenants lose. It has happened every time there has been a rent freeze and will always happen.

handlemaster

CalamariFritti wrote: »

Shocker: landlords against rent freeze

That's the attitude I'd expect a non landlord to say. This will only make matters worse. What do you think this will serve ?

mgn

CalamariFritti wrote: »

Shocker: landlords against rent freeze

You should try being a Landlord if you think it's so great.

CalamariFritti

mgn wrote: »

You should try being a Landlord if you think it's so great.

CalamariFritti

its not really an attitude and I dont think being a landlord is great. It is the bottom ladder / entry level of living off your assets rather than your labour. And like most bottom ladder things its tough. I only expressed my not being surprised that landlords don't like it. As in water is wet.

Having said that, if it is so bad why do it then?

Assetbacked

There is no entitlement to have a mortgage covered by the rent received from investment properties. In fact, that would be a fantastic return on investment. Getting half the mortgage covered would be an optimal return.

A rent freeze combined with the rental tax credit would benefit people who are already in tenancies as they can budget better in the next couple years as the rent freeze only would last for a short-term period until supply picks up/immigration dies down. For those people, they would welcome it.

beauf

CalamariFritti wrote: »

its not really an attitude and I dont think being a landlord is great. It is the bottom ladder / entry level of living off your assets rather than your labour. And like most bottom ladder things its tough. I only expressed my not being surprised that landlords don't like it. As in water is wet.

Having said that, if it is so bad why do it then?

So if someone who wasn't a landlord showed you exactly the same facts that rent freeze don't work, then it would be valid. Only when a LL says it isn't. Must make taking advice from anyone with experience in anything very difficult. Just because someone has a vested interest doesn't mean they are automatically wrong.

As for living not of your labor. I'm not sure even going back to a economic system of barter does that make sense. How do you get the assets to live off them? What happens when you retire?

Fol20

Assetbacked wrote: »

There is no entitlement to have a mortgage covered by the rent received from investment properties. In fact, that would be a fantastic return on investment. Getting half the mortgage covered would be an optimal return.

A rent freeze combined with the rental tax credit would benefit people who are already in tenancies as they can budget better in the next couple years as the rent freeze only would last for a short-term period until supply picks up/immigration dies down. For those people, they would welcome it.

For sure they would welcome it as long as the ll doesn’t sell up. For any new tenancies or a tenant moving, how do you think it will impact them?

beauf

I think a rent freeze is a great idea.

It's a bit like proving is something explosive by standing beside it smoking.

A landlord can sell up and invest in a new property that has the maximum rent. Or just invest in something else entirely line a REIT. Or even get out of property completely. End of problem.

beauf

Fol20 wrote: »

For sure they would welcome it as long as the ll doesn’t sell up. For any new tenancies or a tenant moving, how do you think it will impact them?

Peeking around those blinkers is not allowed.

Assetbacked

Fol20 wrote: »

For sure they would welcome it as long as the ll doesn’t sell up. For any new tenancies or a tenant moving, how do you think it will impact them?

There are limits to what people can pay, arguably we're past those limits which is why we are seeing rental increases start to slow.

https://www.irishtimes.com/business/economy/rents-up-by-8-2-but-inflation-slows-in-cork-and-dublin-1.4118664?mode=amp

The Student

Assetbacked wrote: »

There is no entitlement to have a mortgage covered by the rent received from investment properties. In fact, that would be a fantastic return on investment. Getting half the mortgage covered would be an optimal return.

A rent freeze combined with the rental tax credit would benefit people who are already in tenancies as they can budget better in the next couple years as the rent freeze only would last for a short-term period until supply picks up/immigration dies down. For those people, they would welcome it.

What does the landlord get out of a rent freeze?

I would not bet on a rent freeze only lasting a short term period, why would any new investor enter the market if they can't get the best return on their investment.

Rent freeze's don't work, it discourages new investment and also discourages reinvestment by existing landlords. What business logic is there to increase your spending on an asset were your return on investment decreases.

That does not make business sense.

Fol20

beauf wrote: »

I think a rent freeze is a great idea.

It's a bit like proving is something explosive by standing beside it smoking.

A landlord can sell up and invest in a new property that has the maximum rent. Or just invest in something else entirely line a REIT. Or even get out of property completely. End of problem.

So how does this solve the rent crisis or alleviate it?

Your basically saying “ah sure, we don’t need the ll at all, they can sell up if they want” if you have one less rental on the market, what does this mean for renters? Then multiply that by x and you can see why this is a bad idea

beauf

Assetbacked wrote: »

There are limits to what people can pay, arguably we're past those limits which is why we are seeing rental increases start to slow.

https://www.irishtimes.com/business/economy/rents-up-by-8-2-but-inflation-slows-in-cork-and-dublin-1.4118664?mode=amp

Perfect time for rent freeze. Kick it into over drive.

Be interesting is this because a fall of in people getting new tenancies because there simply isn't anything available to rent.

Old diesel

Assetbacked wrote: »

There are limits to what people can pay, arguably we're past those limits which is why we are seeing rental increases start to slow.

https://www.irishtimes.com/business/economy/rents-up-by-8-2-but-inflation-slows-in-cork-and-dublin-1.4118664?mode=amp

The limit to what people can pay is a key issue.

If someone is at the limit of what they can pay then we need to look at what the benefits of them doing that long term are.

Having tenants at their financial limit means......

1) less money to spend in the economy - less weekends away in Killarney for example. Less hairdresser visits. No nights out to restaurant.

2) increased risk of rent default - as in someone who always paid rent ends up running short of funds to do so.

3) less money for pensions - irony is that the tenant isn't able to put money aside for own pension because trying to pay SOMEONE ELSES.

The answer is for officials to gain an understanding of what the landlord cost/financial issues are.

As in the cost and financial issues that require continued increases even if rent too high already.

The landlord model needs to be studied carefully to understand if it's still the best way forward.

If we know the costs a landlord faces at official level then steps could be taken to assist those costs and address risk factors.

Even down to compensating Landlords for bad tenants.

It's a mess.

beauf

Fol20 wrote: »

So how does this solve the rent crisis or alleviate it?

Your basically saying “ah sure, we don’t need the ll at all, they can sell up if they want” if you have one less rental on the market, what does this mean for renters? Then multiply that by x and you can see why this is a bad idea

The govt have clearly shownn over the last couple of decades they are heavily biased towards reits and new landlords with large portfolios. It's all about attracting more people here and foreign investment.

You're trying to bolt the stable door long long after the horse has disappeared over the horizon....

beauf

Old diesel wrote: »

The limit to what people can pay is a key issue.

If someone is at the limit of what they can pay then we need to look at what the benefits of them doing that long term are.

....

..or you attract people from elsewhere who can pay these amounts, into well paid jobs in multinationals who are paying housing and relocation top ups.

The Student

Old diesel wrote: »

The limit to what people can pay is a key issue.

If someone is at the limit of what they can pay then we need to look at what the benefits of them doing that long term are.

Having tenants at their financial limit means......

1) less money to spend in the economy - less weekends away in Killarney for example. Less hairdresser visits. No nights out to restaurant.

2) increased risk of rent default - as in someone who always paid rent ends up running short of funds to do so.

3) less money for pensions - irony is that the tenant isn't able to put money aside for own pension because trying to pay SOMEONE ELSES.

The answer is for officials to gain an understanding of what the landlord cost/financial issues are.

As in the cost and financial issues that require continued increases even if rent too high already.

The landlord model needs to be studied carefully to understand if it's still the best way forward.

If we know the costs a landlord faces at official level then steps could be taken to assist those costs and address risk factors.

Even down to compensating Landlords for bad tenants.

It's a mess.

I personally think the above while valid will not be acted upon. The State does not want the problems associated with housing people so they abdicate the role to the private rented sector.

The State benefits most from the current situation, they get the income tax from the rent without the risk of non payment. If they just gave a tax credit to the tenants then the tenants would have funds to put towards a deposit on their own place should they wish to purchase a property.

We need faster eviction laws with actual penalties that will impact on the tenant. ie if they fail to pay rent and the landlord gets a court judgement then the judgement is automatically deducted from wages or social welfare they receive.

What the State wants is all the benefit without the risk and is pitting tenant against landlord.

Being a landlord is a business, the social obligations of housing people is the States responsiblity.