Rent pressure zone affecting my property value

F

Frank

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A corporate landlord approached about buying my apt.

As the rent was so low, the offer was 10's of thousand lower than market value.

Said it before
I am not in this for greed, also not a charity.
I have always fixed any queries straight away.

This seems very unfair to me,

Anecdotally I believe I could struggle to get a tenant out to sell as they won't find another place close to the rent of mine.

Ready to get out in the next year or 2 as Gov clearly don't want accidental landlord in the market.
 
Compared to Daft at the time
I know not very scientific 35k to 40k different

Now I know this is a different sale as they were happy to take tenant, no EA etc.
But even if I don't get the tenant to leave and sell through EA then this will still effect me as a new owner is stuck with the lower rent.
 
Frank said:
Compared to Daft at the time
I know not very scientific 35k to 40k different
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but what % is this of the 'current market value' ? You are liable for 33% CGT of the differance btw so take that into account as well.
 
No CGT still below what I bought for.
still a ways off that so won't be an issue for a while.

Luckily I bought right at the top :)
 
NoRegretsCoyote said:
How much lower than market rent are you? How much lower than market price was the offer?
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I am 1120 at them moment again daft not very scientific are looking for 1800 to 2000

Personally I feel this is too high, but the fact remains I am way off.

Even if the reality is somewhere in the middle of me and lower daft.
 
Frank said:
Compared to Daft at the time
Click to expand...
The Daft data is skewed to new lettings, you'll find that most existing tennancies are below this, and in many cases well below.

If you haven't done so, you should be increasing the rent in line with the legislation.

How did the corporate get your details and did they know what the rent was? My guess is they already own units in that development and may be looking to exploit negative sentiment in the market and hope that a few reluctant landlords bite at below market offers. The more units they have in a development, the lower their costs and the more influence they can exert in its management.
 
Leo

I accept the point on Daft, but I am not even in the ball park, rent has gone up as per the rules but at 2% I will end up further behind every year.

At least 70 of the complex owned by corporate so as we found in a recent AGM
1 rep had 70 votes and wiped the floor with the rest of us.

So I would say you are right, it was worth a cheeky ask, if someone was struggling they may have taken a low offer.
 
Leo said:
The Daft data is skewed to new lettings, you'll find that most existing tennancies are below this, and in many cases well below.
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The daft rent is the market rent.

Indeed the legislation governing rent reviews includes (or at least included) an obligation on the landlord to provide examples of equivalent properties at or above the rent they were wishing to increase it to.
 
NoRegretsCoyote said:
The daft rent is the market rent.
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True, but with volumes at record lows, it's reflective of a small segment of the overall rental market. Lots of landlords feel hard done by because rents they were happy with a few years back are now below the inflated headline rates they're seeing in the media.
 
Frank said:
This seems very unfair to me,
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its not unfair, its unconstitutional but no one has the money or organisational wherewithal to take it on.

Also Michael D should have referred it at the time but ofcourse didnt!
 
I know someone who sold a house that was rented out well below market rent. To the amount of between €550-€600 pcm.
He sold up anyway and the estate agent did tell him that when people rang up enquiring about the property, once they heard the rent (it was in a RPZ) they weren't interested. If was purchased as a buy to let again and the rent was quoted on daft as the market rent. That is, the new owners just upped the rent by €550-€600 pcm. The property was renter in three days. RTB are beyond useless. There's no enforcement. My advice is just raise the rent. The only people who will know are the old tenants, who will be long gone.
 
Leo said:
The Daft data is skewed to new lettings, you'll find that most existing tennancies are below this, and in many cases well below.
Click to expand...
The media quote the Daft data as indicative of the average rent. The RTB produces a rent index which is based as follows
”the tenancies analysed as part of Q1 2021 Rent Index Report did not include any renewal tenancies, only tenancies that are new in existing housing stock and new tenancies in new housing stock. Daft currently lists 40 rental properties in Cork city. It is likely that a lot of renewals is going on.
Does any agency produce a survey of the actual average rent paid by tenants in our large cities and towns?
 
valery said:
Does any agency produce a survey of the actual average rent paid by tenants in our large cities and towns?
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Not to my knowledge.

It's very hard to collect data on rents in payment.

I agree at this point rents in payment could easily be 20% lower on average than market rents based on advertised lettings.

This is nice of course for tenants lucky enough to have a lease. Rent controls do nothing for new tenants coming onto the market.
 
I heard anecdotally of a solicitor who is in a consortium looking for these sorts cases - a property that where they can make a below-market cash offer for, based on rent that's stuck way too low. They refurbish and either rent out/sell based on much higher rents achieved afterwards. So, not a consortium but there are groups out there looking to take advantage.

In this case, I'd be worried if a corporate entity seemed to be taking over the block at some point they'd just want to own the whole place. Once they have control of the management board, they might decide to find ways to pressure the last 10 - 20% of owners to sell out e.g. increase the service charges using some creative accounting that doesn't affect them (they might switch management agents to one that they own), and so on.
 
argolis said:
I heard anecdotally of a solicitor who is in a consortium looking for these sorts cases - a property that where they can make a below-market cash offer for, based on rent that's stuck way too low. They refurbish and either rent out/sell based on much higher rents achieved afterwards. So, not a consortium but there are groups out there looking to take advantage.

In this case, I'd be worried if a corporate entity seemed to be taking over the block at some point they'd just want to own the whole place. Once they have control of the management board, they might decide to find ways to pressure the last 10 - 20% of owners to sell out e.g. increase the service charges using some creative accounting that doesn't affect them (they might switch management agents to one that they own), and so on.
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That's interesting

The big owner pushed through a load of work this year that doubled the Management fee
As I said earlier we had an AGM then MR big came in with 70 votes and made fools of owners.

I asked the pointed question had the management company bottled in not keeping an adequate sinking fund.
They disagreed :)

Need to get out of dodge
 
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