How many landlords have quit because of rent controls?

Discussion in 'Property investment and tenants' rights' started by PaxmanK, 7 Sep 2018.

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  1. PaxmanK

    PaxmanK Frequent Poster

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    For the last decade or so I have been a member of what we call.a property club.
    Basically it is a group of people who own investment property and we meet up once a month and share our experiences, tips, woes etc trying to help each other out.

    I have even taken some topics that have come up and asked about them on AAM because there is a wealth of knowledge here to clear up any differing views we might have. So thankyou AAM.

    Yesterday evening g we had out usual meetup and one of the guys mentioned that out of about 30 people who have e come and gone over the years that they reckon about 50% have got out of renting in the last 2 years or so, basically since Simon Coveny introduced rent controls and then Murphy twisted the knife even more.

    So a quick poll even showed out of the 13 of us there last night, there were even 5 who do only short term or airbnb now. And out of the rest , ALL of them don't intend on doing long term rental anymore once their current tenants move out. Some have even given notice to current tenants because they want out.

    Now this is only a small same, but it would be interesting to know how many landlords on AAM here got out of long term rental or are planning on getting out soon?

    The conversation last night was a real eye opener though. I knew it was bad , but it's worse than I thought. Is it just our small sample or is it widespread?
     
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  2. vandriver

    vandriver Frequent Poster

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    It would seem perverse,to a non landlord,that with rents at the highest level ever achieved since the foundation of the state,that you are leaving this business.
    If it was profitable when you started the investment(and surely it was) then it must be super profitable now.
     
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  3. PaxmanK

    PaxmanK Frequent Poster

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    It's the not being able to charge market rent that is the biggest factor.
    Most were making a loss with rents forced down the during the recession and then when times got better they were slow to put up rent if they wanted to be nice to sitting tenants and then they got trapped below market rent by rent controls.

    That one factor if it were changed would probably see a lot of landlords stay.

    But also the whole rogue tenant risk has to be removed. A landlord basically has no rights. And any left get eroded by new legislation every year. What's next?
     
  4. odyssey06

    odyssey06 Frequent Poster

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    It was Coveney who introduced the rent cap with the backing of cabinet and FF.
    Murphy is completely out of his depth and should never have been given that portfolio by Varadkar.
    This is a collective failure of FG & FF.

    FF wanted 2%, not 4% cap on increases:
    http://www.thejournal.ie/homeless-crisis-4-rents-3138632-Dec2016/

    Just in case anyone thinks the main alternative would be any better!
     
  5. TheBigShort

    TheBigShort Frequent Poster

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    As I understand it, what this effectively means is that the cost of the mortgage repayments was not being met by the rent?

    In other words, in the midst of a housing crisis, some landlords are expecting others to repay the mortgage on their property plus provide a profit.

    The more of these landlords that leave the market the better. Put the properties up for sale for FTB's. The more that do this, the more it will assist in price stability or price drops in the market.
     
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  6. Bronte

    Bronte Frequent Poster

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    Last edited: 7 Sep 2018
    Hassle. Red tape. Tired of the business. More and more horror stories about tenants overholding. Reading PRTB horror cases. (there's one on here currently where the tenant is smirking at the landlord, another thrashed the places causing untold damage in the thousands - front door, furniture, garden).

    Just easier to sell and be done with it.

    And for all that hassle reams of newspaper print on how landlords are the most evil people ever. We are the lowest of the low. And it's all our fault that there is a housing crisis no less. It's unbelievable. Even the presidential candidates are on about homelessness. And does anyone actually bother listing to us landlords.

    Just this week FF have a crazy long lease (no object to long leases here by the way) tax incentive nonsense.
     
    Last edited: 7 Sep 2018
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  7. PaxmanK

    PaxmanK Frequent Poster

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    Last edited: 7 Sep 2018
    Bronte, that was one of the questions that came up form a member of our group and I hadn't got an answer yet, so I posted on here before the meeting and got great help again.

    I have loads of questions about our experiences that I'll probably post on AAM if the answers we get elsewhere are not clear. I find AAM is a hive of knowledge.

    Also, I meant to add also that we discussed the new threat to airbnb too.

    The consensus was ....

    None of us is going going to stay in long term letting.

    Anyone gone to airbnb will just find another way if that is banned.

    If they can't find a way they will let for the maximum short term and then leave it empty for the rest of the year rather than have to operate under the long term let regime.

    Some will just sell up anyway.
     
    Last edited: 7 Sep 2018
  8. The Horseman

    The Horseman Frequent Poster

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    Because of the anti landlord stance the govt has adopted the risk is too great. What other business continues to provide a service where they stop receiving payment for the provision of the service knowing full well they will never get payment even if they go to court and win!
     
  9. The Horseman

    The Horseman Frequent Poster

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    Landlords are expecting their investment to yield a return that's why people invest, its to make money!

    The more landlords that leave the sector then the bed spaces available for rental decreases and unless additional supply comes on board then rents increase as supply has fallen.
     
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  10. Bronte

    Bronte Frequent Poster

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    In case you've missed it, government policy for housing is that us private landlords provide it. While government does everything to drive us out. You're delusional if you think driving us out of business will solve the housing crisis. Most of my tenants can not purchase a property and never will, so where do you think they should go?
     
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  11. SBarrett

    SBarrett Frequent Poster

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    I think I will print this off this thread and give it to all the people who tell me that they want to buy property.
     
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  12. PaxmanK

    PaxmanK Frequent Poster

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    Maybe send a link to it to the minister :)

    Or shos it to tenants who want to know the real reason they can't get a place or are asked to leave. Especially good tenants.

    Or the numerous newspapers who don't seem to understand why rents are so high for the few places available.
     
  13. thos

    thos Frequent Poster

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    I am a 'reluctant landlord', being that I had a previous property in negative equity that was no longer fit for purpose, so held and rented when I moved to a new place.
    It has now returned to positive equity, so would provide some payback after clearing mortgage.
    I don't want the hassle, or the risk (should interest rates rise), so for me, I'm planning on getting out.
     
  14. vandriver

    vandriver Frequent Poster

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    Just musing....
    Is airbnb really the panacea for all ills?
    What's the average stay?A couple of days?
    Then cleaning laundry greeting new guests etc.Then maybe a few days empty till the next weekend.
    While for most landlords,a tenant on a long lease is almost a passive investment.
    Just my 2c this find Friday morning!
     
  15. PaxmanK

    PaxmanK Frequent Poster

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    Last edited: 7 Sep 2018
    Airbnb can be as passive as you want it to be. And you should see the difference in the state of the place after 6 months b&b Vs 6 months renting. It's an eye opener.

    Also no red tape and no one sided rights for the tenant.

    I don't think airbnb is the only game in town if you want to avoid long term lets though, but is is handy.

    Anyway it's the extreme level of risk that's the problem with letting your property these days. If you are not permitted to get a return based on the level of risk it isnt going to work.
     
    Last edited: 7 Sep 2018
  16. TheBigShort

    TheBigShort Frequent Poster

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    Im not suggesting reducing the amount of landlords, just the ones that saw buy-to-let properties as a cash cow for others to pay the mortgage+profit and sell at retirement.
    When the going gets tough these 'landlords' are bailing out.
    Landlords should be providing a competitive alternative option to house ownership. Providing quality accommodation at competitive prices that provide a real option for people. They dont.

    And a dismal failure it has been.

    I never said it would solve the housing crisis, but it would be a step in the right direction.
    Landlords who provide housing on the expectation that the tenant will pay the mortgage plus provide profit, but then bailout when times are tough should not have become landlords in the first place.
    The sooner the fly-by-night landlord is gone, the better.

    And yet part of the issue that landlords apparently have is not being able to charge market rates.
    If they were able to, no doubt homelessness would increase, so spare me the fake concern of where tenants will go.

    Put the property up for sale, I will buy it and let it out. I will slash the rent by 50% offering decent accommodation at affordable prices that provide tenants a real alternative to home ownership (whether they can afford it or not, they now have a choice).
    I bet you I can find tenants that will appreciate the property and look after it.
     
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  17. The Horseman

    The Horseman Frequent Poster

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    That's business you stay when profit is available and leave when its gone.

    If you want to see the provision of this type of accommodation at prices that you deem competitive prices then make it attractive to new landlords remember being competitive comes from "competition".

    Landlords are leaving rather than entering the market. Ever wonder why?
     
  18. PGF2016

    PGF2016 Frequent Poster

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    As I see it there are two types of landlords. Those who are looking to profit and set themselves up for retirement and those who are reluctant landlords due to negative equity / property crash.

    What landlords do you want exactly? Charity landlords that provide housing for no profit but take all the risk and hassle?
     
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  19. Alistair

    Alistair Registered User

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    Last edited: 7 Sep 2018
    I have posted on this matter previously, so apologies if folks think I am harping on, however I would like to share my view on the BTL market having been a long term landlord since 1997. I currently have 5 BTLs in Ireland having sold 2 earlier this year. Additionally, 2 x notices of termination accompanied with the relevant statement of intent to sell witnessed by a commissioner for oaths have been issued to long term tenants (> 5 years) in two of the remaining properties. Once these are sold, I will sell the remaining BTLs in Ireland.

    For me, there are two main reasons why I am exiting this business; firstly there is far too much volatility in terms of tax treatment, legislative controls (emergency measures being threatened by the current housing minister) and wider economic factors (European tax harmonization). I cannot effectively plan the future return this business will provide in Ireland due to the changes and punitive tax treatment of BTLs. No other business would continue to invest or operate in a jurisdiction where they cannot effectively plan or estimate future returns due to the level of uncertainty introduced by tax and legislative changes (rent controls, tenant rights, unreasonable PRTB delays and the reduced recourse to the property when a tenant decides not to pay or meet their contractual obligations).

    Secondly, the tax treatment and level of tax applied to turnover and profit has reduced the attractiveness of this business. USC is partially applied to rental cashflow for non institutional landlords. I am not aware of any other non VAT registered business that pays a percentage of tax on turnover and such a punitive level of tax on profit. Additionally, businesses that require their employees to essentially work for free would not have any employees. There is no effective mechanism that allows for a landlord's time and travel in servicing a BTL. For example, a tenant calls reporting a problem with a washing machine. The landlord has to travel to the property to establish if its really a problem with the equipment or tenant finger trouble. Possibly call a repair or service agent, again meet the agent at the property and pay for that person's time and assessment. Possibly go shopping for a replacement machine, arrange delivery/collection. Travel back to the property, take out the old equipment, wait around for the delivery service and connect the new machine.... non of the landlords time and travel expenses are allowable under revenue rules. What other business would expect their employees to travel and work for free ?

    Having sought legal advice and receive additional feedback from my accountant, anecdotally, there is a significant exodus from the BTL market. There is net immigration into the country and a continued strong demand from those with cash or the means to purchase the ex-BTL stock coming onto the market for sale. My view is that the stock of BTL for rent will continue to reduce which will force rents upwards until they find their level... but it will be more expensive for tenants going forward.

    I have tried to objectively state my experience... it is what it is. Businesses adapt and change continuously and follow the money where the risk/reward makes sense. I plan to be fully out of the Irish BTL market by mid 2019 and will continue to invest abroad instead.
     
    Last edited: 7 Sep 2018
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  20. The Horseman

    The Horseman Frequent Poster

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    There are plenty of ex rental properties for sale on MyHome.ie so you can purchase them and rent them out at a rate you feel is appropriate.
     
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