Why do Landlords feel entitled to rent increases?
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No, I'm not describing simple supply and demand economics. It's far more serious than any of that rot.
If Mars bars were to be pumped up to €4000 per bar, and there was a limited supply, what do you think would happen? Nobody would buy them, despite the obvious demand that already exists.
Nobody would buy them because people can do without Mars bars. So they are reduced down to an agreeable price for what they are worth to people. Voila.
Now, consider water as an example. Allow some profiteering company a complete and utter, irrefutable control over water. They want maximum money and so they charge 100 euro per litre. There's not much that anyone can do about it because they have no control, so they simply must pay. Regardless of damned supply, the demand hasn't changed either. And hey, why not charge 120 per litre next year? It's all gravy, because they have people by the throat.
You're talking about the simplistic notions of Mars bars, and trying to apply it to water too. No, talk of "increasing the water supply" isn't going to fix anything.
They aren't the same.
Just so, allowing a fundamental societal necessity like housing to be turned to profiteering is disastrous, and there will never be enough supply, ever. They will make damn sure of it. Every bloody move made makes it better for profits and it's well past time that people recognise that simple fact.
As above, how many more years will it take to raise your eyebrow when supply is somehow always negated, year upon year? 8 more years, maybe 15? Be specific.
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Property is not just a "necessary" product, its also an "aspirational" product. Its not just about a roof over your head. Thats why a 3 bed des res in a nice suburb with beautiful sea views, costs a multiple of a 3 bed in a dodgy area with some antisocial behavior issues. Other "necessary" products dont have an "aspirational" element. If you are thirsty, clean water is clean water - whether its shop own brand or Ballygowan.
The state is responsible for providing a minimum standard of living. The state should provide that directly. After that, those with the most money get to live in the biggest places in the best areas.
Some questions to consider
- How much is affordable rent - who gets to decide, and what is the basis to calculate it
- If the private market does not want to supply rentals at the determined affordable rent rates, how do you fill the gap and house people (subsidize landlords, or direct state provision)
- All property is not created equal. How do you value a nice area, or a big garden, or access to the DART etc.
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This whole comment reads like the drunken rant of a college student who had a single tutorial on Marxist theory.
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I don't understand your overall point.
Water is water, and Pepsi may be aspirational water to some. So what? Water is water, firstly and most importantly.
As for who gets to decide what, that's a question that can be answered secondarily once the housing market is wrenched out of the claws of maximum profit. There are a great many people who had feck all say in housing being removed out of their reach and being extorted through rent, a number growing by the day, and I sincerely doubt that the grabbers will be the ones to ameliorate a bloody jot.
I'd wager more than a fair bit that a lot of the "aspirational" shytes living in des res land have done so, and are doing so, off the backs of sucking and slurping rent.
In other words, feck your "open market" ideology. No need to guess where the grumblers on this thread are siphoning their profits from.
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Private service providers maximise profit for service provided. Experts say they have never seen this from a business before.
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While yours reeks to the high heavens of a small-time profiteer desperately attempting to look like a big boy among the landlord class.
It's a talentless "business" you're in and it's only natural to feel that weigh upon you, but dismissing reality will change nowt. Landlords, big or small, will take everything they can get their hands on. It's not their fault that they've been allowed do it, but they won't worry themselves over it too much, I'm sure.
The housing market is a necessity for people, and it has been sold out beneath the population to the aspirational fief lord's of the 18th century.
Ye can all grumble and mumble away about pernickety details that matter not, but it is what it is, and it wouldn't exactly be something anyone would boast about, except when around the similarly "invested", then it'll be all dicks out, of course.
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Yeah, it's never been seen at this level before, well-spotted, Watson.
Another one sucking the teat of a hyper-market.
What are you people thinking? That after almost a decade of increase, increase, increase, that it's just going to continue without any fuss, that ye can **** off together about interest rates while sucking the life out of society?
Cos if you do, you're dead wrong.
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You see it as talentless. It is neither talentless, and certainly not without risk. The LL has first of all have the talent to finance the property purchase then evaluate if the benefit outweighs risk in a sector with tenant favouring legislation and high taxation.
You see maximising profits as morally wrong, you show me a business investor who does not want to profit from their investment, I’ll show you someone who shouldn’t invest.
It never has, nor never will be the responsibility of the private sector to provide any service at the lowest possible cost to the customer.
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So has it always been this way, or has it not?
Does the old Irish phrase "housing crisis" lost all meaning by now?
The point being, there is nothing normal about this, and it isn't about morality of profit. It's about the ludicrosity of a situation that has spun wildly out of control with some people on the profit side declaring loudly "perfectly natural!"
Feck all that noise.
As for it being a risky business and requiring talent, well, all I'll say is it's risky and talentful to walk down a road without dying too.
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It has always been the way. During the last recession when rents plummeted, the maximum LLs could charge was considerably lower than today because there was excess supply and lower demand. Now those factors are reversed and rents charged are much higher. Did you have a strong opinion when LLs couldn’t make mortgage repayments? I doubt it.
The housing crisis has been caused by increased demand due to increases in population and employment opportunities allied to contraction of supply as a result of a downturn in construction for almost a decade. This has been exacerbated by the numbers of LLs leaving the market as a result of poorly thought out legislation and increases in house prices. A considerable number of LLs are finally in positive equity after nearly 15 yrs of negative equity, so are grabbing the chance to offload BTL properties.
Is there a financial risk every time you walk down the road, and if there is, will it last for the next 20 yrs?
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I have a single property 3 bedroom let in Dublin at abt €1400 pm. I pay a tenth of that to an agent who takes care of practical matters. I recently had to fork out €2300 for a new boiler. This month I’ve not made profit, but a loss to cover this. Next month there’ll be a very small profit. It’s a bit of pension to me, but not a hell of a lot of incentive not to just sell up tbh.
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Oh, so it has always been this way. I forgot that it was St Brigid herself who coined "housing crisis" back in the days of yore.
Go on away out of that, will you!
Oh so there are some poor landlords that were rescued from the negative equity of their stupidity by sucking extortionate amounts of money out of people who never even had a chance to be stupid, and never will. Bully for the boys!
You think it's a fair and righteous thing that some people who gambled on a second property get a second chance, at the expense of people who aren't allowed a first chance to own their own home?
As for your fine analysis of the housing crisis, I'll summarise it more quickly; people that had a say in it, have ridden the hole off this country, at the expense of everyone else, at the expense of the future.
It's the big boy vulture funds, actively enabled by a no-doubt bought governmental system that have purposefully created this crisis. A perfect synergy of "you build 'em, we'll fill 'em" brown envelope exchange-a-thon. The incidental small timers running interference are the mere skid marks of this particularly exhuberant faecal movement.
It's no more accidental or natural than a bank robbery.
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This thread is borderline hilarious.
i’m a landlord, unfortunately. I purchased my BTL property in January 2008 - amazing timing on my part but I knew then I was in it for the long haul. This is where money I had earmarked for my pension went, and continues to go into.
14 years later and the rent has not once come close to covering the mortgage repayments. I have never made as much as one cent on the property. I charge market rate rent. The rent has gone up in recent years due to demand, but equally in 2010 I had to drop it by almost 40% to get someone to rent it. The lowest monthly amount I’ve ever had to to top up the rent received to cover the mortgage payment was €200 (current top up payment by me). The highest (in 2010- 12) was €1100 - per month.
I had a period of over 12 months with no tenant at all, and obviously had to cover the mortgage fully for those months. Unlike most people (I assume) I’m not wealthy enough to cover 2 mortgages fully for a sustained period of time like I had to there.
I also had a delightful period of over 18months where a tenant simply decided not to pay the rent. Obviously again I had to cover this full amount of the mortgage during this time. When the tenant was finally removed (legally I may add) from the property, their parting gift was to take a sledge hammer to the walls, bathrooms, and kitchen etc. This cost over €10,000 (at mates rates I will add) to bring the property back to a rentable condition. The Gardai said there was no point in pursuing a case against the defendant as he was being deported. I took a case anyway and was awarded costs and damages. The defendant hasn’t paid a cent. He was deported, and was back within 2 months. When I reported this fact to the Gardai they were sympathetic but basically said unless I found out where he was living there was nothing I could do. I suggested if I saw him again could I follow him to find out where he lived. I was warned (yes) that that would constitute harassment! The stress of that whole situation was almost unbearable at the time. It caused a lot of arguments with my other half. It put a huge strain on our relationship. Have you ever tried telling a bank that the mortgage won’t/can’t be paid this month on the BTL property because the tenants haven’t paid the rent?
in addition to those costs I have constant/annual repair and regular repainting costs. I have annual property management fees and property tax, as well as many other costs.
The assumption that EACH AND EVERY LANDLORD in the country is mortgage free and just collecting rent for spending money every month is ridiculous. Most have mortgages on those properties. Are there landlords making lots of money every month? Yes. No doubt there are, but I would wager they are in the minority. Why do you think so many private landlords are trying to exit the market? The last figure I heard was over 1,100 private landlords exited the market last year (or that was possibly over the last 2 years - I’m open to correction on this).
Are there landlords struggling? Yes. But you rarely, if ever, hear that story.
But back to you OP, do you still want to swap places? Could you afford to?
And the bad tenant stories are rarely told.
To conclude, I said “unfortunately” at the start. I say this because it would have been an awful lot less hassle to simply invest in my pension in cash. I took a risk, and that’s on me. I still believe in the long-term play but it’s been an emotional nightmare and I wouldn’t wish the crap I’ve gone through with one tenant in particular on anyone. We call our BTL “Pacific Heights”. If you don’t get the reference it’s an 80s movie about a nightmare tenant. It’s worth a look btw. That’s how stressful it was. It will be a long time yet before I realise some value from this investment.
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My apologies, when you asked has it always been this way, I didn’t realise you want me to take into account the time period since the early 1300’s. I’m afraid I can only speak from my experience since the early 90’s.
Does “fair and righteous” usually go hand in hand with investment? I wouldn’t have thought so. I suspect investors are given short shrift if they talk about fairness and righteousness when losing money on investments. Maybe your experience with investments is different though, have you had any luck with your losses being handed back when you complained?
If you think politicians have been bribed by vulture funds, you would be doing a public service by bringing that evidence to a journalist, or indeed the Gardai. It would be a ground breaking story.
On a serious note, I get it that you are unhappy that rents are rising. But LLs are in the business of making money, not benevolence. A huge number of LLs have left the market, so it appears not to be the gravy train, or dick measuring prospect you seem to think it is. Raging that LLs are only in it for money is like raging at the sky because it’s raining, it just makes you look a bit nuts because everyone knows LLs rent for profit, and rain just falls a lot.
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I am a small time LL. I have two properties in rural Ireland. One I bought in 2016 for 50k two bed house in a small town. I had it rented at 650 after giving a notice to increase of 75 euro. Originally I was going to flip it over but when rents rose I decided to rent it.
Second is an old farm house that I did up. It cost about 50-60K. Rent is 650/ month, it a two bed. Both are HAO rental. Farm house is not really saleable.
The two bed town house was there for a town to buy. It's similar to tens of thousands of apartment and small houses that were sold from 2011-2018. They were there for everyone. But of course they were not in places people wanted at the time and they turned there noses up at them.
I am in for the long haul with the farm house. Of it gets too much hassle the townhouse goes as it has risen in value to about 80k( still only 40-50% of building cost).
Son is sharing in an apartment in D4 costing 1850/ month. What goes around comes around.
Slava Ukrainii
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This isn't about normal investments. Therefore it isn't about "fair and righteous" in normal investments.
It is about the totally abnormal market that exists. Therefore it is about the very unfair and very unrighteous investments in that abnormal market.
The question of the thread was "why do landlords feel entitled to increased rent?", I answered that, via a purposefully broken system, landlords will take everything they can get. It is the simple fact of the matter.
It's screwing the country up beyond belief with consequences already baked in for a generation to come at least.
Similar in a fashion to the "rights" of Kings and lord's of old being able to rape a woman on her wedding night, being able to get maximum, extortionate rent off a people in a purposefully broken system is PROBABLY the kind of thing you'd not want to try and justify in some ludicrous way.
"I'm allowed by the king, that's all there is to my behaviour."
"It's the market, that's all there is to my rent prices."
It's far past normality, and everyone knows it. Everyone. I don't care for the stupid excuses, and neither, I suppose, do any of ye care for my harsh criticism of the system that has been created.
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Virtually all commodities rise in value when demand outstrips supply, in that way, the rental market is no different to any other. I do agree with you that certain aspects of the market are abnormal, for instance, it is abnormal for LLs to be leaving a market in such numbers while rental prices are so high and show no signs of decreasing for the foreseeable future. In theory, more LLs should be entering the market than leaving.
The justification for LLs charging higher rents is that all investors intend to maximise profits when risking their money on the investment. There is nothing new about this, all investments can fall as well as rise subject to market conditions, that’s the rules of the game.
You can rage, but that doesn’t change the fact that renting property is a business, right now business is good, but it wasn’t a short time ago, and may not be again in the future. You won’t shed a tear for the LLs then, and they should not expect you to.
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What goes around comes around is right. I work in Galway and pay under 300pm rent to share a lovely house. It hasn't raised in 8 years as I'm on good terms with the landlord. My friends couldn't believe it was so cheap.
I also rent an apartment D4, at a very similar price, people balk at that cost too. But I choose to live there despite the cost.
Honestly though, all things considered, if I bought in Galway I'd have much more disposable income despite a lower salary, a nicer car, more holidays, bigger house, etc.
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You insist on inferring that this is all somehow normal. Despite the meaning of the word "crisis" bandied about for nearly a decade
No matter how many times you refer to housing as though it were a packet of biscuits, it won't be normal.
The system is utterly broken. I say, and common sense says, this is the result of coordinated effort. That's my problem. People trying to downplay it are my problem.
I don't think you have any grasp on the reality of the situation for this country. I'm angry about it, yes, and I'm not even affected by it. But the amount of people I know that have been negatively impacted is preposterous. Relationships destroyed, employment destroyed, mental health destroyed, education destroyed, financial futures near non-existent . I'm angry on behalf of them, and rightly so. And that feeling is rife across the board, all you need do is dare listen for it. It's swelling.
You say that it has been a good business "for a short while". A short while, as in the guts of a fecking decade? Can you not comprehend the damage that has been done in such a long time? Oh you'd like to have a baby, woman? Well, just sit tight for another "short while", a decade or so, no big deal. Oh you'd like to go to Trinity college, just hold on there until you're 28, teenager. Oh you'd like to save for a home of your own, just hold on there another short bit. Oh you'd like to take that job offer? Just get back to them in a decade. It's really no big deal at all!
Not to mention that every indication is that it's going to get worse and worse. I'm sure you're happy with that. It's only the market, after all.
Well, happy as you may be with all the money, you're going to have to live in this society too down the road, and I'm telling you now, it's not looking pretty for anyone.
But I may as well be talking to a brick, for God's sake. "Hey, I know you're making money off that thing, but it's bad for other people". Useless.
The hyper-financialisation of housing should have never been allowed, never mind encouraged and carefully curated. People need to get on the streets with this. Whether before or after it all collapses, along with this society, they will be on the streets for justice. It will be less and less easy to scoff at that as this situation reaches inevitability. Not always, but quite often, we get what we deserve.
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Crisis are not abnormal occurrences. Housing bubbles are cyclical, as are periods of inflation, usually linked to over/under supply. There was a crisis in 2008 linked in no small part to speculation on property which led to over supply, and rents plummeted as a recession hit.
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You know nothing about me. I actually agree with you that the housing situation in this country is a shambles, as it seems to be in many other wealthy countries too. But you're making your arguments in a juvenile and facile manner.
And I take issue with your characterisation of all landlords as heartless bloodsuckers. And yes that's partly because I have ended up a landlord myself. I never set out to be but we couldn't afford to sell our home when we needed to move for work. What should we have done instead?
It's too easy to make everything into a fairytale with innocent victims and big bad villains. That's why your post read like a drunken college rant. Adults realise the world is not so simple.
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I suggest you and the OP look at your options as this is not going away anytime soon All key indicators are that
Property Prices and Rents are going up
Property is not being built quickly enough for demand
Demand for property is going to more competitive going forward.
My advice to you is instead of looking at landlords who have not made the conditions for the current housing paradigm that exists today. Key to this are
1/2 Million more people living here now than 10 years ago
After the 08 bust developers stopped building
During Big balls Berties reign they stopped the need for developers to build social housing and just pay extra to the government instead
We have to face the fact that housing is a commodity that is being fleeced by not just the right wing of REITS and Vulture funds, as well as domestic landlords but Irish property is seen as a good place to buy throughout the globe with the government guaranteeing up to 90% of market value in the form of rent from anywhere from 10 to 25 years. There is not many other investment opportunities that would return that government backed dividend. Then you have the government interfering with HAP and the likes meaning people not working or on low wage are competing with other workers earning more. They have made an absolute sh1t show of it.
This government for the next 3/4 are snookered with our levels of debt and deficit there are reports that we may see a 2% hike in interest rates in the next 5 years. That means our 250Billion debt will see interest alone on that debt reach 5Billion a year to service.
You should look at your options. If I was unable to afford rent in Dublin today my options would be and what I would do is one or a combination of the below
Move home with parents and save.
Move in with other people and save on the over all cost of rentals.
Rent in a location that is not exactly where or what you want. Rent a house that is not exactly in great condition
Upskill/retrain to a job where you can earn more and then rent where you want
Buy as a mortgage will set you back less than rent in a lot of scenarios.
Move to a different country - see if the grass is greener.
Come back to me when you have tried all of the above as anyone I know has had to use one or all of the above to buy/rent a property where can afford. Stop waiting on everyone else to sort your problems
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It's not like your ideas haven't been tried in Ireland. Any government telling telling the workers of Ireland that the state will be the near exclusive provider or housing wouldn't last.
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The truth is harsh......................... unfortunately.......... it's.................. the........ truth.
Slava Ukrainii
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Prima Nocta is a myth without any historical records. You have conspiracy theory because your views require no evidence just your belief. Theories actually require evidence to form a theory not a list of things you reckon. Can you point to the regulation changes in the last 10 years that favoured landlords?
When the ERSI warned of a housing crisis and suggested the government put money into construction the public went crazy. They planned to put the money in but then people like you said it was all about lining their pockets and their developer friends' pockets. So they didn't do it and we have a housing crisis. The government should have ignored the public but they didn't as they wanted to be reelected. Now you are saying that was the plan all along to force house prices up. Which was it? Seems conspiracies can take either route and still be doing it to make money. Pretty complex view
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Got a failure notice in the post just now for a HAP rental I have.
it’s a recently build house rented to an elderly disabled gentleman.
it failed because I don’t have child-proof window restrictors on all windows in the house, upstairs and downstairs.
when you read the stories of how a high % of rentals fail inspections, this is why!
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All the talk of "the market" as an irresistible and inevitable force acts as a smokescreen obscuring the very obvious answer.
Landlords increase rents because they want to, decide to, and are able to.
Speaking anecdotally, obviously; as a renter for almost two decades until quite recently, I can say that in none of the places I ever stayed did the rent ever decrease. It increased, regularly. Any upgrading to the various places was done by me (painting, mainly) and I bore the cost. If a landlord is unable to cover their mortgage payments on a rented property through the rents they charge, the option to sell the place to someone who'd actually like to live there is available to them.
The agency of landlords in setting rents is too often obfuscated. It's not "the market"; it's a desire on the part of landlords to extract more value from an asset that they are invested in. They should own that.
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Well that is an anecdote you will find data that would suggest that rents dropped significantly after the 08 crash. You should of asked for a rent decrease during that period of 5 years where rents almost halved
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In actual fact I did. Having been great tenants (with the references to prove it!), the people I was living with and I asked the landlord to consider lowering the rent in 2008. He didn't, so we left. And what happened? That place stayed on daft.ie, empty, for the guts of a year.
Rents are set by landlords, not some magical market.
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'The housing crisis has been caused by increased demand due to increases in population and employment opportunities allied to contraction of supply as a result of a downturn in construction for almost a decade. This has been exacerbated by the numbers of LLs leaving the market as a result of poorly thought out legislation and increases in house prices. A considerable number of LLs are finally in positive equity after nearly 15 yrs of negative equity, so are grabbing the chance to offload BTL properties.'
The construction lockdowns increased the supply shock as well.
Eliminating bedsits, which I was against, at the time put the squeeze on low wage workers.
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