TheBigShort
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It makes no sense neither in terms of common sense nor economics, and also reeks of the Soviet Union's idealistic year-zero mass housing schemes.
The very concept of 100-year borrowing is madness.
Where did you get your figure of €600pm? What's wrong with €500pm? Or €400pm?
(Incidentally €600pm or €7,200pa would represent a 2.88% gross return on investment on a €250k property. Utterly insufficient to meet capital repayments, interest, management, maintenance etc, and as such, pie in the sky.)
You are really understanding of how economies and societies develop are you.
The State can borrow over 10,20,30yrs if it wants. It simply applies a policy of getting a return over 100yrs or even more.
The State has not set a retirement date!
Or it could be €2,000?Ball park figures, it could be €700 or €800.
Whatever is needed to meet the long term cost of capital, plus a sufficient provision for contingencies. Whatever is achieved beyond that is profit.If the cost of maintaining a property cost you €333 a month, how much profit would you need to make pm before it was worth your while? I suggested €600 could be plausibly be a decent return on a €333 outlay each month.
I find this frankly impossible to understand. Why would any property manager not only rent a property at a massive loss, but compete against others to see who can achieve the biggest loss?The property management will let it out for 2k if they could, but as they have bidded in a competitive tendering process for the property, it is the property managers who offer the most competitive (cheapest price) that will let it out.
Its really not that hard to understand.
???? Are you sure you are a landlord? Or even ought to be?
The State borrows billions to build thousands of housing units, not one!
I just used one unit as an example of how such a scheme could work.
You have to maintain the property to a particular standard. No different to what any good landlord is doing today - all mod cons etc.
Id thought you being an 'excellent' landlord would have a grasp of this?
The State is the property owner and has effectively sub-letted the property to the property manager. The property manager is the effective landlord.
Now you are getting it, except its not worth 2k, its worth €600pm.
2K is the extortionate figure being saddled on working peoples backs who are delaying starting families, cant afford their own home, as a consequence of landlords trying to make their investment pay by getting someone else to pay off their mortgage for them, provide them with profit and capitalise and any asset value appreciation.
All in return for a roof over their head, so that they can go to work and contribute far more in productivity than a landlord ever could.
But people are funny about things like that, like food, and shelter - they will often go to extreme measures like paying extortionate rents, begging, stealing in order to get one or both.
However, under this scheme, effectively taking out the mortgage as a factor, if someone is perpared to provide quality accommodation for €600pm (making a profit too!), then that is all it is worth.
Now you are getting it, choice, value for money. If its not worth your while, go do something else to make money.
There is nothing for the State to manage. All it has to do is build houses, which it already knows only too well how to do. The managing will be left to whoever wins the tender to control the property by meeting certain criteria and offering the most competitive rental price.
This stuff goes on all the time in various other sectors.
https://www.etenders.gov.ie/about_us_main_en-GB
Compared to the HAP nonsense you have highlighted
Seriously, this is simply leeching of the State. Parasitic I think is the word.
Thats the whole point, you are getting so much rent - good for you. But it nothing to do with what you are providing been worth it. You are simply leeching on State funds that could be used to help others elsewhere.
There is nothing 'free-market' or competitive with what you are doing.
The sooner this type of landlord is squeezed out of the sector the better.
Or it could be €2,000?
Whatever is needed to meet the long term cost of capital.
If your return is €600 on a maintenance outlay of €333, the rent you're charging is then €600+€333=€933?
I find this frankly impossible to understand. Why would any property manager not only rent a property at a massive loss, but compete against others to see who can achieve the biggest loss?
It's equivalent to trying to drive down wages by awarding jobs to a panel of prospective workers who will bid against each other for the job and the lowest tendering worker gets the job, at one-third of the going rate.
???? Are you sure you are a landlord? Or even ought to be?
The State borrows billions to build thousands of housing units, not one!
I just used one unit as an example of how such a scheme could work.
You have to maintain the property to a particular standard. No different to what any good landlord is doing today - all mod cons etc.
Id thought you being an 'excellent' landlord would have a grasp of this?
The State is the property owner and has effectively sub-letted the property to the property manager. The property manager is the effective landlord.
Now you are getting it, except its not worth 2k, its worth €600pm.
2K is the extortionate figure being saddled on working peoples backs who are delaying starting families, cant afford their own home, as a consequence of landlords trying to make their investment pay by getting someone else to pay off their mortgage for them, provide them with profit and capitalise and any asset value appreciation.
All in return for a roof over their head, so that they can go to work and contribute far more in productivity than a landlord ever could.
But people are funny about things like that, like food, and shelter - they will often go to extreme measures like paying extortionate rents, begging, stealing in order to get one or both.
However, under this scheme, effectively taking out the mortgage as a factor, if someone is perpared to provide quality accommodation for €600pm (making a profit too!), then that is all it is worth.
Now you are getting it, choice, value for money. If its not worth your while, go do something else to make money.
There is nothing for the State to manage. All it has to do is build houses, which it already knows only too well how to do. The managing will be left to whoever wins the tender to control the property by meeting certain criteria and offering the most competitive rental price.
This stuff goes on all the time in various other sectors.
https://www.etenders.gov.ie/about_us_main_en-GB
Compared to the HAP nonsense you have highlighted
Seriously, this is simply leeching of the State. Parasitic I think is the word.
Thats the whole point, you are getting so much rent - good for you. But it nothing to do with what you are providing been worth it. You are simply leeching on State funds that could be used to help others elsewhere.
There is nothing 'free-market' or competitive with what you are doing.
The sooner this type of landlord is squeezed out of the sector the better.
I don't think there is a hatred for landlordsWhy not just extend the rent a room scheme to landlords so the tenant pays the net income the landlord makes after tax. The tenant can save for a deposit to purchase there own property should they wish.
Why complicate the situation by the state borrowing money to invest in property that will pay for itself over 100 yrs with some odd set up to manage the property, against which property managers will compete to undercut each other almost to the point of loss making.
It would appear there is a ongoing hatred for landlords simply because they are landlords.
That makes no sense. Go off and study the basics of financial management, specifically the long term cost of capital, and come back to me.
Put simply, the current value of future cashflows receivable in 50-100 years time approximates to nil. And there is a considerable repair and replacement cost attaching to any property within a 100 year timeframe.
There's a very good reason why individuals and families aren't allowed have mortgages of 100 years duration.
Or it could be €2,000?
If your return is €600 on a maintenance outlay of €333, the rent you're charging is then €600+€333=€933?
I find this frankly impossible to understand. Why would any property manager not only rent a property at a massive loss, but compete against others to see who can achieve the biggest loss?
It's equivalent to trying to drive down wages by awarding jobs to a panel of prospective workers who will bid against each other for the job and the lowest tendering worker gets the job, at one-third of the going rate.
Parasitic and leeching. There we have it, your view of landlords.
Shure why should supermarkets make profits on bread and milk.
They shouldn't. Food is a fundamental right. Everyone should have access to decent food at affordable prices. No need for greedy merchants to make profits. Just look how well it's working out in North Korea!
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The economics of State borrowing are no different than that of a corporation nor an individual, apart from economies of scale.You need to go beyond the basics of financial management for this. I am talking about the State borrowing funds, not a corporation, not a family, not an individual.
No, the initial electricity infrastructure installed in Ireland up to the early 1960s is now largely if not totally obsolete and has been supplanted by waves and waves of newer investment. If were depending on 1950s electricity infrastructure, we'd resemble North Korea. It's like saying we all have cars because our grandads bought Morris Minors.The benefits of this are obvious. The productivity gains and improvements to standard of living, attributable in no small part to the availability of electricity in every corner of Ireland, over the last near 100yrs are obvious!
So back to housing. Like electricity, the availability of affordable, quality housing, increases the standard of living of the population, in turn increases productivity (people spending their incomes in other areas of economy) instead of disproportionate amounts of their income on rent, becoming less productive as rents increase.
Again, if the property is managed well, if there is unused contingency fund reducing rents further, if the property is affordable, well furnished etc...there is every incentive to keep the property in good condition.
You cannot insure against normal wear and tear as it's an inevitability.If structural defects emerge, the State will insure against these costs.
There is no reason why any property built to standard today should require any significant structural repairs for 50yrs.
It means that there is a contract available to provide a service for profit in which the prospective service providers compete to provide the service for the most competitive price.
In other words, the rent payable by the tenant will be set at the lowest price that a prospective property manager is willing to do the job for profit.
Return is €600 less cost of service €333 = €267 profit per month.
Based on what, though?Where is the massive loss?
The property management has competed for the right to let the property, it has stated what it is willing to let the property for, for profit.
Its not hard to understand, its simple price competition.
Why not just extend the rent a room scheme to landlords so the tenant pays the net income the landlord makes after tax. The tenant can save for a deposit to purchase there own property should they wish.
which property managers will compete to undercut each other almost to the point of loss making.
It would appear there is a ongoing hatred for landlords simply because they are landlords.
It's equivalent to trying to drive down wages by awarding jobs to a panel of prospective workers who will bid against each other for the job and the lowest tendering worker gets the job, at one-third of the going rate.
No, this is akin to you enjoying a State service, let's say TV and radio shows, and instead of just charging you €160 for the TV licence, the State lets third parties sell you licences for €30, €40 or €50, and somehow make a profit for themselves doing so.You mean like the time I got my house painted and was quoted €1,000 , €900 and €750? Guess which one I picked?
Considering its poor track record of managing properties, but its capacity to deliver building units...
No, this is akin to you enjoying a State service, let's say TV and radio shows, and instead of just charging you €160 for the TV licence, the State lets third parties sell you licences for €30, €40 or €50, and somehow make a profit for themselves doing so.
The whole idea is nuts, sorry.
The State's record in building infrastructure is every bit as bad as its track record of managing properties.
How so? Any examples? Specifically around housing pls.
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