Irish Property Market chat II - *read mod note post #1 before posting*

Been getting several a day too. It could be the usual January bounce but a lot these places look like rentals that may have been held back from sale. Like you, hoping it’s not just confirmation bias.

Have also noticed some places that were up for sale just before Christmas reducing asking prices by about 5%.

I myself have been told I can probably expect to have an offer accepted on a place for nearly 5% under asking price that I placed before Christmas but am now considering withdrawing as it needs a lot of work and feel I could well get something for the same price without the work needed in a few months, admittedly with higher interest rates. Conflicted.

Our cultural memory doesnt sit well with evictions.

The average landlord has 1 or 2 properties at most meaning they need other income. With other income it means they more than likely pay the full rate of income tax, along with property tax, home insurance, life insurance and in most cases a mortgage as well that is paid after tax. Compare that with the REITS and how they are treated. So they are not making much on rental. Then they have the real danger of a rogue tenant where some tenants can stay rent free for 3/4 years and reck it and leave with out any comeback. You don't have to take my or anyone else's word for it on here but the figures for landlords leaving the market speak for themselves. As you say rents are sky high and interest rates were so low yet the vast majority of small landlords are all getting out of dodge.

I find this post bizarre to say the least. The average landlord has one or two properties. Being a landlord is like any other business. We enter it to make a profit. if you get a rogue tenant like the one highlighted costing the landlord €70k in lost income and at the same time being unable to reduce his losses can financially destroy him.

If a landlord has paid tax on his profit and the value of his asset has fallen below its purchase price due to a fall in property values, changing legislation etc and the landlord is still liable to repay the capital outstanding is this a "fairly crap landlord"

Do you understand the concept of "average"?

If 1% of tenants pay no rent, then that will reduce the expected rent received by landlords on average by 1%.

If you are unable to manage your investment, then yes, it would make you a bad landlord. Same as how if you bought a pub and ran it into the ground and weren't able to pay back your loans when plenty of other publicans were then that would make you a bad publican. BTW, if you are paying back capital then you are leveraging up your own capital via loans. That is your own choice to leverage up the risk.

The sense of entitlement from a certain cohort is fairly astounding. It's a real extension of the public sector mentality. The State should not be propping up the market for the benefit of such people.

Oke Dokey

That is not an uncommon thing in the US market in general to have something like that where the vendor gives money back towards things.

New builds won't cool at all they will continue to rise as the government will continue to expand taxpayer subsidies to them to keep construction going.

I expect at least one of my children will buy land, not necessarily one of my sons. It's a genetic fact. My mother bought land,( my father died when I was very very young), his brother bought land. Both my maternal grandfather and great grandfather bought land. My better halfs father and grandfather bought land. We bough our farm together. The genetics ate there to indicate that my children will as well. However generally it something you do in your 35-55 year age profile.

I have explained how it is getting harder for LL to .some a profit. But you choose not to understand. Not all LL are unprofitable but the risk factor now for them has a substantial number 4-5k units/ year leaving the business.

Again I will explain inheritance issue. In most other business owners are allow d to extract 750k in capital tax free it's not available in rental therefore inheritance tax is more of a factor.

But you choose to be blindsided by what appears to be a hatred off LL. One must have taken a boyfriend, girlfriend or spouse off you the way your dislike of LL comes through.

Few rental investment will start to repay the owner before 25-30 years. The assumption of many is that the LL should then rent it at reduce rates when it starts to make a return. I no other investment choice is that a factor.

You start throwing red herrings all over the place drifting from one to the other. All most LL want is a fair regulatory system and the stopping of flipfloping by the government and the stopping of using the rental section as a political football by the opposition.

Like any other investment if you make a good one you should be allow to reap it's reward.

Property is not a passive investment of you want to make a return. It the failed assumption you are making. I will put 100ish hours per property into there management every year along with costs. Costs are top of that. I can farm a 60 acre farm in about 10-15 hours a week and I am not living on it. It's return is about 10% at present and that is not including capital appreciation. It has the added advantage that everything spend on it was allowable against tax and losses are allowable against income tax.

Remember this property is NOT a passive investment

Yes, average is the important factor as regards returns. In addition, idiosyncratic risk should not be rewarded in investments. That you, as an individual, are unable to manage and diversify that risk, does not mean you should be entitled to be compensated for it. That is a basic tenet of investing. You could, for example, get together with 20 of your buddies and pool your properties. That would greatly lower the risk of you suffering a catastrophic disaster due to an extremely bad tenant. That is why a market will not compensate you for such a risk. And it is why you should expect to be compensated for it.

And has nothing to do with the topic of the thread anyway. Only insofar that I would say that there should be no government intervention propping up the market for individual investors who made bad decisions as regards taking on risk they couldn't manage. If things turn sour and loans aren't repaid, they banks should be recovering those properties more quickly this time around.

I never said it should be free but your trying to paint a picture that landlords are creaming it but they are not the only ones creaming are the REITS and as you alluded to if it was all so easy and all so profitable why are the majority of landlords running for the hills. I don't even have to argue with you the proof is in the pudding. You asked the question I gave you answer.

Donald you just need to research small landlords and look at the amount of property available to rent in the country and how it has fallen sharply over the last couple of years the vast majority are struggling or at the very least see an investment property or 2 as no longer being viable for them. Look I guess its good for people buying but those who cant buy and have to rent its kind of tough sh1t. The other side of this is if REITS that are buying Irish property get caught up and have lots of exposure if property prices do drop they may well have to sell assets to settle redemptions and other expenses we may see a clusterphuck of a scenario coming in the next 12/24 months.. It is happening the UK currently with the likes of Blackrock who are deferring redemptions.

True but an eviction is an eviction regardless of whether the person is a renter or a mortgage holder. In fact, most people evicted and made destitute in the 19th century were tenants yet it is they who get evicted no prob but not the people who are not paying their mortgage and who are therefore responsible for houses being kept off the market. This is why house prices and house rents are so high for everyone else.

If eviction was an instant and automatic consequence of defaulting on a morthage, house prices would plummet and rents would also moderate for those who prefer renting (you would have a choice if house prices crashed).

Some of the renters pleading with the RTB not to be evicted are families which nowhere to go and no prospect of renting anywhere else. Their stories are every bit as harrowing as those proffered by people who don`t pay their mortgage even though we know people sometimes choose not to pay their mortgage for reasons founded in greed, for example they might not like being in negative equity.

New builds are of little to no consequence. What determines house prices is the eviction rate of mortgage defaulters in the houses that already exist (i.e. the 99% of the market). As long as defaulters are protected, house prices will stay elevated for everyone else. The government doesn`t care because high house prices will make a profit for their precious NAMA and then they can go on pretending that bailing out the banks was not an act of monumental stupidity (notwithstanding the fact the bailout included Anglo which was so toxic it was kept separate from NANA). Besides, house owners like when their house has a high price even though it is still the same four walls.