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How do we actually fix the rental market?
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And what do we do about bad landlords ?Deleted User wrote: »All this, and normalise evictions and penalties for bad tenants.0 -
Maybe stop moving the goal posts on the people who supply rental property every time the wind changes.
Say these are the rules now that apply to your investment.
They will apply for 10 years and will not be changed on you.
Then maybe landlords might invest again. At the moment they would be mad because what they invest now will have different rules and risks next week.
As for people saying build houses .... As if thats going to happen anytime so or at a rate to make a difference.
You need to encourage investors in. The last 10 years have been spent encouraging them to leave.0 -
Well it looks like the effective ban on foreign holidays, no mega money spent on 3 day music festivals, no takeaway €3.50 cappuchinos on the way to work or shop-bought lunch, people cooking from scratch at home, going to the park, cycling or walking with the family instead of piling into the car and heading to Blanch to buy unnecessary cr*p etc, have finally forced millenials and post millenials to do what previous generations of would-be home buyers did : cut out the non-essential Stuff and scrimp and save for a few years. Bank savings have shot up and mortgage approvals likewise because people have been forced to save due to covid restrictions. I hope that puts to rest the notion that it is impossible for young people to save a deposit. And before someone jumps on me to say few could have saved the 30k or 40k over nine months, many couples have, and for the others, it just may take a few more years of living the lessons of lockdown.
What about singles? Doomed to renting or poverty and eventual homelessness?
The vast majority of inner-city homeless shelter residents are single males. Admittedly, many have had/ do have issues with addiction and criminality. Nonetheless, unless you're part of a couple the options seem a bit grim.0 -
And what do we do about bad landlords ?
More rental properties, more vacancies and easier paths to entry to the market will squeeze a lot of bad landlords out. Although in my experience many landlords are only ‘bad’ because of the insane rules placed on them.
“The didnt fix the shower” seems bad form but if the guy spent 18 months receiving no rent off a previous tenant and is in negociations with the bank about being in arrears he may not have the 4-500 quid to put in a new one etc...
The PRTB is there to act against bad landlords and even not bad landlords often feel their wrath0 -
What about singles? Doomed to renting or poverty and eventual homelessness?
The vast majority of inner-city homeless shelter residents are single males. Admittedly, many have had/ do have issues with addiction and criminality. Nonetheless, unless you're part of a couple the options seem a bit grim.
Realistically nobody is building property for single people, even 1 bed apartments appeal to couples and women arent leaving the workforce en masse any time soon. Any single person will compete with couples to buy any property and thats not going away. The only thing that can be done there is to increase your income or your savings till you can compete with dual incomes / savings.0 -
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Eric Cartman wrote: »Realistically nobody is building property for single people, even 1 bed apartments appeal to couples and women arent leaving the workforce en masse any time soon. Any single person will compete with couples to buy any property and thats not going away. The only thing that can be done there is to increase your income or your savings till you can compete with dual incomes / savings.
It was always difficult if not near on impossible for a single person to buy a property
That has not changed0 -
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Recently? Yes. Always, **** no. Both my parents bought houses in Dublin in their 20s on modest incomes. Pipe dream now.
Well I am 60 and I cant remember a time from the late 70s early 80s when a single person on an average or slightly above average wage could buy a house
58% tax rate and 16% mortgage rates were a barrier
Celtic tiger years were different but people paid for that folly
These are some of the mortgage rates for earlier years
1975 11.25%
1976 12.5%
1977 13.95%
1978 14.15%
1979 14.15%
1980 14.15%
1981 16.25%
1982 16.25%
1983 13.0%
1984 11.75%
1985 13%
1986 12.5%
1987 12.5%
1988 9.25%
1989 11.4%
1990 12.37%
1991 11.95%
1992 13.99%
Its only when we joined the Euro in 1999 and started using the currency in 2002 that rates started dropping to near todays levels0 -
16% interest on a 25k mortgage for a 3 bed house.Well I am 60 and I cant remember a time from the late 70s early 80s when a single person on an average or slightly above average wage could buy a house
58% tax rate and 16% mortgage rates were a barrier
Celtic tiger years were different but people paid for that folly
These are some of the mortgage rates for earlier years
1975 11.25%
1976 12.5%
1977 13.95%
1978 14.15%
1979 14.15%
1980 14.15%
1981 16.25%
1982 16.25%
1983 13.0%
1984 11.75%
1985 13%
1986 12.5%
1987 12.5%
1988 9.25%
1989 11.4%
1990 12.37%
1991 11.95%
1992 13.99%
Its only when we joined the Euro in 1999 and started using the currency in 2002 that rates started dropping to near todays levels
Call the guards!0 -
Eric Cartman wrote: »More rental properties, more vacancies and easier paths to entry to the market will squeeze a lot of bad landlords out. Although in my experience many landlords are only ‘bad’ because of the insane rules placed on them.
“The didnt fix the shower” seems bad form but if the guy spent 18 months receiving no rent off a previous tenant and is in negociations with the bank about being in arrears he may not have the 4-500 quid to put in a new one etc...
The PRTB is there to act against bad landlords and even not bad landlords often feel their wrath
That has to be a joke0 -
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That has to be a joke
not really. Like what would you say the top 10 things are that make a 'bad landlord'
the deposit not being in escrow is a big one, often tenants say the landlord won't give it back or is late giving it back. Often they don't have it till a new tenant comes in. Most aren't greedy, just broke.
the house has mould issues - turns out tenants won't open windows for showers, won't put on the rad in the hallway, block vents to 'save money on heat' etc...
the landlord won't fix the boiler / shower - they tried to service it before and bad tenants wouldn't let the service guy in / wouldn't agree a date / the boiler is ancient and the landlord isn't even covering the mortgage payment with the rent and doesn't have a grand or 3 to drop upgrading it.
most issues around 'bad landlords' Ive found stem from tenants inaction / refusal to operate things properly or simple cashflow issues.0 -
Eric Cartman wrote: »not really. Like what would you say the top 10 things are that make a 'bad landlord'
the deposit not being in escrow is a big one, often tenants say the landlord won't give it back or is late giving it back. Often they don't have it till a new tenant comes in. Most aren't greedy, just broke.
the house has mould issues - turns out tenants won't open windows for showers, won't put on the rad in the hallway, block vents to 'save money on heat' etc...
the landlord won't fix the boiler / shower - they tried to service it before and bad tenants wouldn't let the service guy in / wouldn't agree a date / the boiler is ancient and the landlord isn't even covering the mortgage payment with the rent and doesn't have a grand or 3 to drop upgrading it.
most issues around 'bad landlords' Ive found stem from tenants inaction / refusal to operate things properly or simple cashflow issues.
What about landlords that only provide washing machine and not washer -dryers as they are legally obliged to forcing tenants to use clothes racks and causing damp
What about badly insulated houses apt that cost a fortune to heat
What about landlords that do not advertise their BER
What about landlords that will not pay 120 for a boiler service preferring to just change the boiler every 15yrs or so what it goes tits up
What about landlords that are not registered with the RTB
I agree there are bad tenants and a lot by choice ,but there are bad landlords by choice and greed
To not accept this is head in the sand stuff
On the point in bold ,many apts will not have windows in bathrooms and en-suites and woefully inadequate extract fans
I had to upgrade fans in the apartments we had rented out for this very reason0 -
What about landlords that only provide washing machine and not washer -dryers as they are legally obliged to forcing tenants to use clothes racks and causing damp
What about badly insulated houses apt that cost a fortune to heat
What about landlords that do not advertise their BER
What about landlords that will not pay 120 for a boiler service preferring to just change the boiler every 15yrs or so what it goes tits up
What about landlords that are not registered with the RTB
I agree there are bad tenants and a lot by choice ,but there are bad landlords by choice and greed
To not accept this is head in the sand stuff
On the point in bold ,many apts will not have windows in bathrooms and en-suites and woefully inadequate extract fans
I had to upgrade fans in the apartments we had rented out for this very reason
To be fair the design of a building or its BER doesnt make someone a bad landlord. You chose to rent it. Nobody in any reasonable world can blame a landlord for how much a house is to heat0 -
But none of this is the responsiblity of the next tenant. A landlord is in business; he needs to capitalise his business with sufficient working capital; that includes the capital requires to address the expenses that arise from poor tenants, because there are poor tenants out there. When poor tenancy gives rise to problems, is is the landlord's responsiblity to fix those problems; he can't pass the burden onto the next tenant by simply not fixing them.Eric Cartman wrote: »not really. Like what would you say the top 10 things are that make a 'bad landlord'
the deposit not being in escrow is a big one, often tenants say the landlord won't give it back or is late giving it back. Often they don't have it till a new tenant comes in. Most aren't greedy, just broke.
the house has mould issues - turns out tenants won't open windows for showers, won't put on the rad in the hallway, block vents to 'save money on heat' etc...
the landlord won't fix the boiler / shower - they tried to service it before and bad tenants wouldn't let the service guy in / wouldn't agree a date / the boiler is ancient and the landlord isn't even covering the mortgage payment with the rent and doesn't have a grand or 3 to drop upgrading it.
most issues around 'bad landlords' Ive found stem from tenants inaction / refusal to operate things properly or simple cashflow issues.
The landlord not having the cashflow to repay the deposit when due is a classic case. It is absolutely 100% the landlord's responsibility to be in a position where he can repay the deposit when due. He should not be dependent on the next tenant for this and, if he is, it is because he is managing his business poorly.
As for the landlord "not even covering the mortgage payment with the rent", that is equally not the tenants problem. Plus, there is no reason why the should expect always to be able to do cover the mortgage payment with the rent. It stands to reason that you expect to pay more to buy a house outright than to rent it for a limited period. The landlord is going to end up with a hugely valuable capital asset, owned outright; he cannot realistically expect to have this financed entirely by tenants who end up with no asset, so that he acquires the entire asset for free.0 -
Peregrinus wrote: »But none of this is the responsiblity of the next tenant. A landlord is in business; he needs to capitalise his business with sufficient working capital; that includes the capital requires to address the expenses that arise from poor tenants, because there are poor tenants out there. When poor tenancy gives rise to problems, is is the landlord's responsiblity to fix those problems; he can't pass the burden onto the next tenant by simply not fixing them.
The landlord not having the cashflow to repay the deposit when due is a classic case. It is absolutely 100% the landlord's responsibility to be in a position where he can repay the deposit when due. He should not be dependent on the next tenant for this and, if he is, it is because he is managing his business poorly.
As for the landlord "not even covering the mortgage payment with the rent", that is equally not the tenants problem. Plus, there is no reason why the should expect always to be able to do cover the mortgage payment with the rent. It stands to reason that you expect to pay more to buy a house outright than to rent it for a limited period. The landlord is going to end up with a hugely valuable capital asset, owned outright; he cannot realistically expect to have this financed entirely by tenants who end up with no asset, so that he acquires the entire asset for free.
Do LLs really expect tenants to finance the purchase of the property? I wouldn’t have thought so. Tenants pay for a service not a physical asset, the benefit of the is that they have use of the property during the tenancy period, not an asset at the end of it. If the tenant wants an asset, buy, don’t rent.
I do agree with you that LLs should not assume that the proceeds of the rental will cover the mortgage, but they should be able to assume that a tenant who stops paying rent can be replaced within a reasonable timeframe, therefore allowing the LL to continue to use the rent for whatever they see fit, including paying off the finance on the property. We know this is not the case due to legislation which favours the tenant.
You say that it is up to the LL to “fix those problems” when there is a poor tenancy and that the LL should be capitalised enough to cover expenses during that period. If this were like any other business the tenant would cease to have benefit of the service once they stopped paying for it, saying landlordism is a business and a LL should be able to cover expenses while the eviction process moves painfully past the moratorium on evictions then slowly through the RTB and courts, is like saying a law office should have enough money to continue as normal to provide services for clients for up to two years, without any payment whatsoever coming in. To be honest, I find that unreasonable, could you be expected to have enough capital to continue pay your staff/expenses/mortgage/rental/utilities/insurance for that period as normal with no income?
At a time when rents were at historically high levels, landlords were leaving the sector in significant numbers and buy to let mortgage applications were extremely low. If the rental market is to improve, the reasons for those market anomalies must be considered and addressed. If investors are not staying in the market when demand/rent is high, nor new LLs interested in entering the market, there is a huge problem.0 -
I take the point about the need for efficient and effective eviction procedures when a tenant isn't paying rent. That is something that needs to be fixed if the Irish rental market is to become more functional.
But Eric's points were different; he seemed to suggest that if one tenant (who paid rent) was responsible for degradation of the property it was reasonable and natural for the next tenant to bear the burden of that and be expected to pay market rent for a substandard property, or that it was reasonable for the landlord to retain the deposit of a departing tenant until he has succeeded in reletting the premises to a new tenant on terms acceptable to himself. Neither of these things are at all reasonable, and the presence in the market of landlords who think they are is another indication of the dysfunction of the Irish residential letting market.0 -
Nobody will rent their property if they have any sense You will lose control, and possibly ownership of the property, because of increasing government regulations.0
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You absolutely lose control of the property; that's the whole point of letting. The tenant becomes entitled to exclusive possession; he's primarily in control of the property, and as landlord you have to contract with him for whatever degree of control or oversight you wish to retain. If you want to retain control in your property, absolutely, yeah, don't let it.Government buildings wrote: »Nobody will rent their property if they have any sense You will lose control, and possibly ownership of the property, because of increasing government regulations.
As for losing ownership - nope, that's just drama queenery. I don't know of a case in which that has happened, and there are certainly no government regulations which provide for this to happen.0 -
Peregrinus wrote: »You absolutely lose control of the property; that's the whole point of letting. The tenant becomes entitled to exclusive possession; he's primarily in control of the property, and as landlord you have to contract with him for whatever degree of control or oversight you wish to retain. If you want to retain control in your property, absolutely, yeah, don't let it.
As for losing ownership - nope, that's just drama queenery. I don't know of a case in which that has happened, and there are certainly no government regulations which provide for this to happen.
I suspect the loss of control and potentially ownership is associated with inability to remove tenants and repossession associated with inability to pay mortgages when rent ceases to be paid.0 -
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No it hasn't happened yet. But it will, and without any referendum . If you are a landlord, and look at all the miniscule rules regarding tenant eviction all designed with the tenant in mind, you see that all cards are stacked against the landlord. You will realise how impotent you are as owner of the property.
If you have an empty property, you are lucky. Sell it, put the money in the bank, and save yourself a lot of headache.0 -
Government buildings wrote:No it hasn't happened yet. But it will, and without any referendum . If you are a landlord, and look at all the miniscule rules regarding tenant eviction all designed with the tenant in mind, you see that all cards are stacked against the landlord. You will realise how impotent you are as owner of the property. If you have an empty property, you are lucky. Sell it, put the money in the bank, and save yourself a lot of headache.
Yup, this is where we re heading to, a concentration of ownership of property, and monopolisation of rental markets, should be fun!0 -
Peregrinus wrote: »But none of this is the responsiblity of the next
As for the landlord "not even covering the mortgage payment with the rent", that is equally not the tenants problem. Plus, there is no reason why the should expect always to be able to do cover the mortgage payment with the rent. It stands to reason that you expect to pay more to buy a house outright than to rent it for a limited period. The landlord is going to end up with a hugely valuable capital asset, owned outright; he cannot realistically expect to have this financed entirely by tenants who end up with no asset, so that he acquires the entire asset for free.
He doesn’t acquire the asset for free. He needs up front capital of 30pc at a minimum. They also bear all the risk during the 25-35years mortgage where property values may go up and down at the point they need to sell, they have a highly concentrated asset, 35 years is a very long time to be overpaying a mortgage. It looks like what you say is contradictory. You say it’s a business yet at the same time. You expect the business to not be profitably for 35years as they will have a free asset at the end. Normally a business is profitable throughout to pay all the bills that come in. Look at car rental companies or any company that allow rentals of anything. The rental cost is usually always more expensive that owning.0 -
Saying you acquire a property for free by using rent to pay mortgage is like saying you get a home for free by using your wages to pay the mortgage. Some assume that as there isn’t much manual labour involved in being a landlord, the rent/pay isn’t earned, but of course a service is being provided by the landlord and that service has a price.0
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Yeah, but car renters don't end up with a valuable asset; a car depreciates immediately and quickly. Whereas you expect a house to appreciate in value. So the profit in a house-rental business is loaded to the back end in a way that is never going to be true of the profit in a car-rental business. House rental is essentially a way of financing the purchase of a house; you'd never say that about car rental, where the cars are basically consumables.He doesn’t acquire the asset for free. He needs up front capital of 30pc at a minimum. They also bear all the risk during the 25-35years mortgage where property values may go up and down at the point they need to sell, they have a highly concentrated asset, 35 years is a very long time to be overpaying a mortgage. It looks like what you say is contradictory. You say it’s a business yet at the same time. You expect the business to not be profitably for 35years as they will have a free asset at the end. Normally a business is profitable throughout to pay all the bills that come in. Look at car rental companies or any company that allow rentals of anything. The rental cost is usually always more expensive that owning.
That's not to say that the rent shouldn't exceed the mortgage payment. It may, and from time to time it often will. But of course the rent has to cover not just the mortgage payment but also the maintenance and other outgoings on the house, and the other overhead costs of renting out a house (like providing and renewing furniture and appliances).
My point is that the landlord takes this risk, in return for the upside risk of a valuable capital asset, free of mortgage, at the end. It's inherent in the property rental business that the downside risks come first, and the upside at the end. That's not the tenant's fault. It's not anybody's fault, really; it's just the economic nature of the business. Which means, don't get into the business unless you have the resilience to deal with the downside risks, should they eventuate. You need to have some capital (or surplus income from other sources) to make expenditures that are not covered by the rental income, because there will definitely be times when that happens, and they could come quite early in the piece. That's not unfair, and it's not market dysfunction, and it's not a bias against landlords - it's capitalism, red in tooth and claw.0 -
Peregrinus wrote: »I take the point about the need for efficient and effective eviction procedures when a tenant isn't paying rent. That is something that needs to be fixed if the Irish rental market is to become more functional.
But Eric's points were different; he seemed to suggest that if one tenant (who paid rent) was responsible for degradation of the property it was reasonable and natural for the next tenant to bear the burden of that and be expected to pay market rent for a substandard property, or that it was reasonable for the landlord to retain the deposit of a departing tenant until he has succeeded in reletting the premises to a new tenant on terms acceptable to himself. Neither of these things are at all reasonable, and the presence in the market of landlords who think they are is another indication of the dysfunction of the Irish residential letting market.
Im not suggesting its reasonable. Im suggesting that our rental taxation and what counts as an expense in this country is so distorted that often times there just simply isnt the money to make these repairs after youve paid the tax amd mortgage. So unfortunately the result is the next tenant getting a sub standard property and the landlord labelled as bad.
In a functional rental market (germany) the tenant has to hand back the space they rent painted a neutral colour and to the same standard as they received it. The landlord has a lot fewer responsibilities, here the landlord gets handed back properties full of old crap , in need of a repaint, with broken furniture etc...0 -
Peregrinus wrote: »Yeah, but car renters don't end up with a valuable asset; a car depreciates immediately and quickly. Whereas you expect a house to appreciate in value. So the profit in a house-rental business is loaded to the back end in a way that is never going to be true of the profit in a car-rental business. House rental is essentially a way of financing the purchase of a house; you'd never say that about car rental, where the cars are basically consumables.
That's not to say that the rent shouldn't exceed the mortgage payment. It may, and from time to time it often will. But of course the rent has to cover not just the mortgage payment but also the maintenance and other outgoings on the house, and the other overhead costs of renting out a house (like providing and renewing furniture and appliances).
My point is that the landlord takes this risk, in return for the upside risk of a valuable capital asset, free of mortgage, at the end. It's inherent in the property rental business that the downside risks come first, and the upside at the end. That's not the tenant's fault. It's not anybody's fault, really; it's just the economic nature of the business. Which means, don't get into the business unless you have the resilience to deal with the downside risks, should they eventuate. You need to have some capital (or surplus income from other sources) to make expenditures that are not covered by the rental income, because there will definitely be times when that happens, and they could come quite early in the piece. That's not unfair, and it's not market dysfunction, and it's not a bias against landlords - it's capitalism, red in tooth and claw.
The risk/reward needs to be right though. Its not. Not by a long way.
And worsae than that. Its getting worse for the investor all the time. And then the investor has no idea how much worse it will get or when. There is no room for planning for a return on investment.
So if we cant get enough investors in at the moment, no chance in the future.0 -
with no will to fix and after "de pando"come sept there with be sweet FA to rent now is the time to be brave and incentiivize to increase supply must have fast track antisocial nonpayment evictions and a national database of same or we keep going round in circles its the same ones each time.0
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Yeah. But also in German the tenant gets much greater security of tenure, plus protection against rent increases. Tenancies are open-ended and the tenant can basically stay as long as he wants, unless the landlord can prove that one of a limited number of specific termination conditions has occurred.Eric Cartman wrote: »Im not suggesting its reasonable. Im suggesting that our rental taxation and what counts as an expense in this country is so distorted that often times there just simply isnt the money to make these repairs after youve paid the tax amd mortgage. So unfortunately the result is the next tenant getting a sub standard property and the landlord labelled as bad.
In a functional rental market (germany) the tenant has to hand back the space they rent painted a neutral colour and to the same standard as they received it. The landlord has a lot fewer responsibilities, here the landlord gets handed back properties full of old crap , in need of a repaint, with broken furniture etc...
The tenant can terminate without reason, but may need to give up to 9 months notice. As a result of all this, average tenancy length in Germany is 11 years; I think it's less than 3 years in Ireland. The long tenancies combined with restrictions on rent increases for sitting tenants means that rents do not move in line with shifts in mortgage costs or house prices, except in the very long term, and neither landlords nor tenants expect them to.
And handing back broke furniture doesn't arise because the landlord doesn't generally provide the furniture and appliances; the tenant does. The tenant will often also fit a kitchen, and take it away when he leaves.
In short, it's a very different market. A tenancy implies much greater commitment on both sides. The majority of German families live in rented accommodation, and the system is set up on the assumption that tenants are presumed to be there for the long haul. And of course tenants are a powerful voting bloc; there are many more tenant voters than landlord voters, and all the political parties are conscious of this. Tenants' unions and representative bodies are politically significant.
This might be a better system than the Irish system; when tenants stay longer they have more commitment to the property and more incentive to maintain it in good condition. But it wouldn't necessarily suit Irish landlords who want to rent property for a short period, or who see renting as a way of initially financing the acquistion of a property that he intends for himself. And it certainly wouldn't suit landlords who expect the rental income to cover the mortgage payment, because there is there is only a very indirect connection between them.0 -
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Peregrinus wrote: »Yeah. But also in German the tenant gets much greater security of tenure, plus protection against rent increases. Tenancies are open-ended and the tenant can basically stay as long as he wants, unless the landlord can prove that one of a limited number of specific termination conditions has occurred.
The tenant can terminate without reason, but may need to give up to 9 months notice. As a result of all this, average tenancy length in Germany is 11 years; I think it's less than 3 years in Ireland. The long tenancies combined with restrictions on rent increases for sitting tenants means that rents do not move in line with shifts in mortgage costs or house prices, except in the very long term, and neither landlords nor tenants expect them to.
And handing back broke furniture doesn't arise because the landlord doesn't generally provide the furniture and appliances; the tenant does. The tenant will often also fit a kitchen, and take it away when he leaves.
In short, it's a very different market. A tenancy implies much greater commitment on both sides. The majority of German families live in rented accommodation, and the system is set up on the assumption that tenants are presumed to be there for the long haul. And of course tenants are a powerful voting bloc; there are many more tenant voters than landlord voters, and all the political parties are conscious of this. Tenants' unions and representative bodies are politically significant.
This might be a better system than the Irish system; when tenants stay longer they have more commitment to the property and more incentive to maintain it in good condition. But it wouldn't necessarily suit Irish landlords who want to rent property for a short period, or who see renting as a way of initially financing the acquistion of a property that he intends for himself. And it certainly wouldn't suit landlords who expect the rental income to cover the mortgage payment, because there is there is only a very indirect connection between them.
I'd prefer the german experience, having been a landlord and a tenant before (currently neither) , to the irish one.0
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