Buy to Let in Ireland: The Case for a Contrarian Property Investment

JohnFlory said:
The direct subsidy payments from taxpayers to private landlords are also higher than ever (€550 million per annum through HAP,
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Many landlords do not wish to take HAP supported tenants, but are effectively forced to do so by law..

Becoming a HAP landlord - Housing Assistance Payments

Becoming a HAP landlord You are not legally required to rent your property to someone getting HAP support. You choose the tenants for your property. However, you are not allowed to refuse to rent to someone just because they receive HAP. If you do, you will be breaking the equality laws. Further...
www.hap.ie www.hap.ie
 
I know I'm in the lions den here but landlords saying they do not want the €550 million in HAP payments they get from government every year but are forced to take them is somewhat ridiculous. Similar to landlords saying that they have reluctantly accepted €339 million in ARP money for "humanitarian reasons"
 
JohnFlory said:
landlords saying they do not want the €550 million in HAP payments they get from government every year but are forced to take them is somewhat ridiculous.
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Below is taken directly from Threshold:

'Between 2017 and 2020, the WRC received 329 complaints from tenants on foot of a landlord’s refusal to accept HAP or rent supplement. Based on our research and the experience of our clients, we believe this number to only scratching the surface of the issue.'
 
See here

Threshold etc. are advising tenants not to tell the landlord they will need HAP, move in and pay the full rent themselves for a couple of months, then claim it. Why? You've no hope of a tenancy if you mention HAP when you apply.
 
DannyBoyD said:
I cannot decline because they are entitled to HAP.
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Everytime there's a mention of any pro landlord measure, we get to hear quite loudly about this €550m 'subsidy' to landlords.
But we don't hear that many, as in the Threshold piece I quote above, do not want it and in fact are force fed it.
 
JohnFlory said:
iBy the way you are also excluding ARP landlords which do not have to register with the RTB. If you add the ARP landlords and the AHB landlords (which you included in 2018 figures) to the 2025 figures it is clear that number of landlords is higher than ever and that the numbers have been increasing quarter on quarter for years
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AHB landlords are completely different. These are government supported and funded housing bodies which offer Council level rents to those entitled. It is social housing, just organised and owned by a voluntary body instead of the Council. These are not comparable with private sector landlords at all. You may as well be including Councils as landlords in here and arguing that because it is so profitable they are joining the PRS.

Landlords who have been registered with the RTB at any time post 2022, now can't rent to Ukranians via this scheme. Why? Because landlords left the PRS to rent to Ukranians. This would cause a decrease in registered landlords. Landlords availing of ARP don't register with the RTB. So it is very odd that within about 18 months (2023 and 2024), the number of registered tenancies jumps by a net figure of 27,000 while at the same time tenancies are leaving the RTB for ARP.

Also, where are all these properties that landlords are acquiring for the additional tenancies coming from. We build about 30k new houses and apartments every year - at least 10k (I'm guessing) of those must be acquired by AHBs and Councils. I'm not sure how many second hand properties are sold annually, maybe 50k to 60k, but stock is at an all time low, so I think we'd know about it if landlords were hoovering up a lot of the limited second hand stock.
 
charlie007 said:
Everytime there's a mention of any pro landlord measure, we get to hear quite loudly about this €550m 'subsidy' to landlords.
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My own view is that the private sector probably does a more efficient job of housing the needy than the public sector does.

It also derisks this state to a large extent as we are not left with lots of social houses in place as they are no longer needed.

They are neither a gift nor a subsidy to landlords but simply a payment for a service.
 
Anyone quoting the RTB as gospel really hasn’t a clue. The RTB has been a shambles from the beginning.

In Ireland there is property to buy, the young want only picture perfect boxes. They’re not willing to buy do uppers or to buy to rent. Landlords can’t buy as the RPZ cap means there’s no incentive as it doesn’t make sense. Landlords are getting out for a variety of reasons, good time to sell, rent caps, paperwork…

I got out, cleaned most of it out by selling, start with a clean slate, after much effort legally got the tenants out, all out HAP mostly. (Another lie about landlords not wanting HAp written above) . Kept one property, the cost of renovation is astronomical, (200K) hard to get workmen, have adult child on the job for me learning how it’s done. I’m clear of the two year rule, for one flat was getting HAP 750, told I’ll get 1800, maybe 2 k. So the large renovation investment give me a grant of 50K, and I can write off 150K on a tax scheme for inner city something apparently. Will increase value of property. But crucially I’ll have a top renovation that will give me retirement income for 20 years either no more renovation required. Moving into upmarket rental market, with lovely finishes, walk in shower, double sink, office area, kitchen dining, separate living, outside area, light and bright, smart on reflection, clean lines. Upstairs flat is smaller but I’ll get 1k for that. Moved a stairs to gain a full decent shower room upstairs. Really coming together. Sparks is 20k. He’s getting us a plasterer. Roofer of new warm roof 10 K on extension, wants us to rent to his at home daughter… found a lovely jack of all trades who got us the carpenter to build the new stairs which is lovely. If I had to buy the property it would not make sense.
 
Aside: renovation costs of 200k are the reason the "young" don't want fixer uppers. They're typically older than FTBs of yore, and don't want to live in the new house or pay rent and mortgage while the renovations happen. And that’s if they can even get reliable tradesmen!
 
Dr Strangelove said:
My own view is that the private sector probably does a more efficient job of housing the needy than the public sector does.

It also derisks this state to a large extent as we are not left with lots of social houses in place as they are no longer needed.

They are neither a gift nor a subsidy to landlords but simply a payment for a service.
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I agree with the 3 points you make.
However I'd put an asterik on the 3rd that this payment is in many cases unwelcome!
 
The beauty of HAP is that it doesn't just benefit the landlords that get the €550 million every year. It enriches all landlords by setting a floor on rents. e.g a one bed flat for a single person was around €1000 a month in Finglas. The government raised the HAP payment to a landlord for a single worker on average wage to €1,485 per month for a one bed in Finglas. That person might also top it up be a few hundred. So the new base rent for a one bed in Finglas goes from €1000 to €2000. No landlord needs to accept less than that. The working single renter isn't really any better off as they probably still have to top up, often by as much as the rent was before HAP came in to raise the rates, but the landlords get a lot more. So it is entirely accurate to call all these schemes landlord subsidies.
 
JohnFlory said:
No landlord needs to accept less than that. The working single renter isn't really any better off as they probably still have to top up, often by as much as the rent was before HAP came in to raise the rates, but the landlords get a lot more. So it is entirely accurate to call all these schemes landlord subsidies.
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Landlords in RPZ have had their rent increases limited for the past 9 years. So yes, some landlords have to accept less than that.
 
Dr Strangelove said:
My own view is that the private sector probably does a more efficient job of housing the needy than the public sector does.

It also derisks this state to a large extent as we are not left with lots of social houses in place as they are no longer needed.
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I would agree here ordinarily.....but social housing might be the one area where the State's superior cost of capital and ability to amortize debt over the full useful life of a property (80-100yrs) versus the working life of BTL investor means the State is the low cost producer/provider of a social home......HAP was always meant as a temporary measure as folks found themselves between private sector tenancies and perhaps the final destination which would be social housing......HAP has a become a vampire squid on the face of the Irish property market......and I applaud the doubling down on rebuilding of the social and affordable stock in the country via state sponsored sector via AHB's et al.....what I would say now is that we have enough AHB's and they should be forced in a darwinian Chinese communism sense to compete now for State funding to continue to grow and that ones that can't or are less efficient at managing their stock get eaten up by their large brothers/sisters.....three to four large AHB's with the threat of the weak ones getting consolidated into their more efficient rivals should hopefully keep them honest....if not they will just descend, as all things will, if left alone without a real P&L into inefficient money sucking quangos.
 
JohnFlory said:
The beauty of HAP is that it doesn't just benefit the landlords that get the €550 million every year. It enriches all landlords by setting a floor on rents.
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So, the government stopped building social housing, sold off the ones it had cheaply and let the rest fall to rack and ruin. A fair percentage of the population needs social housing and the government turned to the PRS to house this cohort. Landlords weren't going to rent for free, so the government decided to pay them HAP which does indeed impact on what the market rent in an area is. This whole situation, however, is entirely landlords' fault and down to their greed.

Keep in mind that the HAP level has no impact on the tenancies subject to the RPZs which the RTB has said is working well to keep rents down here
 
Without HAP, RAS, ARP etc rents would collapse to a level that workers on average salaries could afford. If this wasn't enough for landlords they could either sell their investment properties to owner occupiers or accept a lower rent. But nobody in power wants such a nightmare scenario
 
JohnFlory said:
Without HAP, RAS, ARP etc rents would collapse to a level that workers on average salaries could afford.
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I agree with you entirely. Prior to the Celtic Tiger, nobody entitled to social housing rented in the PRS for any length of time. The government stopped building social housing and sold a lot of its stock. Those entitled to social housing moved to the PRS which ultimately increased rents - much more demand. It is certainly one of the factors which has pushed up rents.

Until the government can get social housing numbers up to the required level, it is stuck with HAP. If it cancelled HAP in the morning, tenants couldn't pay their rents and would be evicted with no place to go. That should ultimately bring down rents as those houses would become available, but, you are right, a nightmare scenario, so won't happen.

HAP won't go away & Simon etc. are calling for it to be increased, so on we go.
 
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