Housing Madness

the issue with money creation via methods such as qe, is that these policies are actually designed to inflate asset prices, this was known prior to their activation! this new money should have been used for 'productive purposes', by creating new assets, such as new properties etc, we re basically now fcuked, with rapidly rising wealth inequality, and serious supply issues in some of our most critical needs, expect mayhem ahead!

Nice stalking.

Did I say I owned all 3 properties that were insulated? Thinking people have right on property ownership and are protected by laws and our constitution doesn't seem to me in any way to be a double standard. Can you explain how it is?

I think the RPZ is a terrible system and not true rent control but a blunt instument that punished good landlords and rewarded those who maximized rent. It has caused landlords to sell up and leave the market. So yes I think it is bad and should be removed. Do you want more or less rentals?

You know nothing about how I own my property and have no idea if it was easier or harder than somebody buying today. What is the stamp duty people pay now, what was the mortgage rate I paid how much work did I need to put into the property etc... You are completely clueless on this and have no reasonable way to say it was easy or easier.

Why is rental property in Germany cheaper and renting is more popular? It is to do with history, they destroyed huge chunks of property with a lot of their population dead. International money was pumped into Germany and no profit housing was set up. They got the land and money for free and were able to keep that going. So how this is relevant to Ireland now certainly is worth pointing out how the same doesn't apply here. It can't apply because it didn't happen in the past.

Where outside Berlin are you, former soviet building? Don't you have to provide your own kitchen and repaint when leaving rented property in Germany. Why aren't you advocating the same apply here?

In conclusion you made massive assumptions, very unclear points, ignored huge differences in history and your friend circle is not a good way to gauge an entire market. You really aren't addressing me but how you feel about the entire market which is very misdirected. I have made sure people have a good standard of rental and made sure a service that was needed was available. My family have rented out property for over 40 years with one tenant for 35years. Do you want to go scream at these people about how I am horrible person for making sure they had a nice home.

Why aren't you honest that you hate landlords?

Actually it isn't. Lots of expenses a company can deduct do not apply to rental income. They also added PRSI to it recently which was new.

The main point is other rentals do not pay any tax on the rental income.

Any extra €1 cost to the landlord means over €2 needs to be added to the rent to keep the same monetary income but actually reduces your return percentage. You can't increase the rent in RPZ but other business can increase prices when costs go up. All the increase on living expense are there on a rental for things like insurance, electricity, materials, labour etc.. So no it is not taxed just like any other income there is a huge barrier diminishing rental income to the landlord for the states benefit. What other industry do we do this on or which one do you think we should do next? I mean the pub industry was given a boost in profits with the minimum alcohol pricing forcing them to make extra profit on off license trade while not allowing competition.

Im not talking about a company structure,

You obviously don't understand how much landlords have to pay out. For most small landlords the rent they receive doesn't even cover all they have to pay out - they have to use personal funds to cover all the costs. They have to pay mortgage, repairs and refurbishments, compliance fees, management fees and tax ( that thing everyone forgets about). Also remember it is only the interest portion of the loan repayment that is tax deductible which is usually a small portion of the repayment. The capital portion is not tax deductible.

You are taking a very simplistic view.

When you say the renter pays almost double. Thats before tax and fees (Insurance, maintenance etc) are deducted.

Can you name other businesses that have such control? It is actually none of your business what profit a landlord makes or to determine how much profit they are allowed. If the landlord has no mortgage then the should only charge the tenant the cost of expenses and a minor profit?

I hope you are 12 or below because only a child could actually think that is reasonable or practical in any way.

So the landlord has to do a major repair and has no money to fix it they just take out a loan and put up the rent until it is paid off and reduce it afterwards? Do you think shops that own their premises should charge less for food?

Very few houses will have rent covering the landlords cost of mortgage.

Why? because Landlord has to pay ~50% of that rent in tax straight off the bat. Then you pay insurance, pay for maintenance, property taxes, management fees. It's far from rolling in money, if it was that good then far more small landlords would be entering the market rather than leaving. Currently this country is hemorrhaging small landlords, only institutionals are growing in number.

A shop could close and sell off it's asset at anytime too but then you have no shops. You want to reduce the number of rentals and force rent up then you have the right idea.

Lots of people buy property to rent out as their pension fund not a lump some payment. Why should they not be allowed do that? Lots of pensioners currently rely on rent as their pension because the sate wouldn't allow them a state pension even though the paid PRSI. Rental income is a good pension as it tracks with inflation. Would you rather large companies make this money instead of ordinary citizens?

Nothing to be done if the investigation gave them the all clear.

Isn’t the issue that a small-time landlord pays half the rental income back to the state in tax, yet a REIT pays no corporation tax, despite landlording being, as Ray Palmer puts it, a business, an “industry”.

So why don’t REITs pay corporation tax or CGT?

They must not be much effort put into the investigations.

Although I think you are allowed someone stay over a few nights a week, so it's probably not the easiest thing to prove.

Fairly sure this is just because BTL mortgage rates are so high at c.4%. Gross rental yields before costs are 6%+ (ignoring potential capital appreciation), before taxes and costs etc. are top notch.

The only reason a landlord wouldn't be making money hand over fist is because the person loaning them the money (the bank) is getting all of the benefit.

If you can fund the purchase of a rental out of your own money then the returns are incredibly attractive. 4-5% gross yield (6% less costs) + capital appreciation on top - not many investments can match that

if you borrowed the money off the bank, then you're nothing but a middle man/vessel by which the bank is investing (very profitably) in that rental. Why should an individual in such circumstance expect to make significant profit though? Pretty much any joe soap can do it. When you're not providing the capital and you're outsourcing the handling of it to a letting agent, then what exactly are you providing? Not a whole lot therefore profits will rightly go to the capital provider (bank) plus service provider (letting agent).

All investments are taxed in such a manner. Equities for example dividends are at a marginal rate + gains at 33%. Not many investment firms are projecting gross yields above 6% including capital appreciation so the return on property even with the tax rate looks very attractive. The mortgage bit is a non issue, if you can't put up your own funds to buy it then your return isn't going to be as good because it's someone else's money at risk, simple. If you can't afford to buy a property with your own money, buy a REIT instead.

Nobody borrows a few 100 grand from the bank to throw into the S&P 500 because the rate they'd charge you would make it unattractive, same will hold for property.

The risk bit is a little less clear. As was seen in the crisis, when stuff really goes south and negative equity hits, rents plummet...the mortgage quickly stops being paid and it's ultimately the bank who takes the bath..hence the 4% mortgage rate. So again, the bank takes the risk, the bank makes the gain...the "landlord", an intermediary putting the banks money to work hopefully taking a sliver off the top and then some capital gains (of which there has been plenty of late!)

If you could afford to buy an apartment then your returns relative to risk would compare very favourably with an equity fund (even parking for a second that you can't invest in an index tracker as an irish citizen due to the insane tax implications). In fact, investment models need to adjusted at the minute because the risk-reward on property is so good that traditional optimization tools want to bundle everything into it (which generally isn't suitable due to liquidity constraints). Your point about diversification is very well made, and it's why investing in REITs makes way more sense to get property exposure in a diversified way when you're not wealthy.

What you've described is just a fact of life - you're not wealthy enough to individually get involved in the provision of housing in an efficient manner. I don't see this as a problem that a system can fix.

Investing in lots of stuff isn't attractive with small money - hospitals, roads etc. Which is where either the government steps up or big business gets involved to do it efficiently. REITs are a great way for small investors being able to collectively get exposure to a diversified property portfolio with a good running yield.

There's no real solution here. Anytime you have joe public coming along and having a whirl at being a landlord using someone else's money is clearly going to be inefficient. Inefficiencies always get stamped out.

Even if you went and did what all the the landlords want - "0% income tax on property"...money would plough in from all corners of the globe (mine included) to try to get this mythical 6% running yield with 0 tax...and so prices would rise massively...and the yield would fall...and we'd be back to the start again with the only winners being existing landlords and property/land owners. Suggestions like this (not saying you did suggest, but many do) just come from those with 0 grasp of basic economics.

Is there no issue with the government interfering? The different tax rates on smaller landlords and REITs isn't an inefficiency? It seems like a benefit to one part of the competition. Obviously they get benefits with economies of scale but is tax one of the benefits that they should get?

I'm not sure if we want REITs squeezing every drop of profit out of renters as they work towards being efficient. That's a different issue though. For the direction we're going the government seems to be favouring the bigger businesses with a result that the smaller "inefficient" landlords that could function previously are moving on.

We did have inefficient landlords leaving tenants alone but with recent RPZs they have to be efficient and raise the rent 4% a year if their peers are doing so or else lose out in the future.

From a renter's perspective the ideal scenario would probably be a market dominated by large institutional investors. Not good for people trying to get on the housing ladder initially, but good in the long run in that these large investors would have access to far more money to invest in the market (thereby increasing supply) than small amateur landlords.

The government has pledged to spend billions on building social housing or providing housing subsidys to people on lower incomes . The problem is no one knows if they can build houses at the scale to effect the housing crisis . The market needs 15 to 20 k housing units built every year to keep up with demand. Most of the market is governed by simple economics low supply high demand equals rising prices Young people will vote for the party that promises to tackle the housing crisis in future elections , this is not just an Irish problem. In America its becoming more difficult and expensive for ordinary working people or young people to buy a house .

Rearranging deck chairs on the titanic

We need more houses not change of ownership of already occupied houses