Landlord renting out a self contained flat or apartment in his own home

[bipped]

The fundamental and primary issue of housing is to provide security of tenure for its tenants. Whether that is for life, 20yrs, 10yrs, 10months, or 10 ten weeks.

The government should have legislated for different types of lease terms then if that’s the case, instead they have tied one party into unlimited tenancies with onerous conditions to withdraw.

Adults enter all kinds of fixed agreements every day and are well aware of what they’re signing up to, car loans, mortgages, jobs, phones etc etc. People should have the choice to agree a lease for the amount of time that suits both parties whether that’s 6 months, 5/10/20+ years. That would suit most fair minded people instead of the convoluted mess that’s there now.

 

[LarryScott]

One would think that LLs are fighting over each other to enter the market.

Falling market prices would be the sign of this being true, but it is very much the opposite.

 

[bipped]

The government has failed in its task to induce a larger supply of housing. It has correctly identified the long-term need of housing as a critical social provision ahead of the individual financial and economic needs of the landlord.

So because the government has failed to provide the conditions that encourages housing supply, they pass laws that forces private property owners to step in to fill the gap.
It’s disturbing when the financial and economic needs of landlords are treated as having less protection or rights than the financial and economic needs of other groups. Who will be next on the list I wonder?

 

[Sister Sara]

In my first post on this topic clear inferred 'other landlords' and not all landlords.

The decline of the small landlord (I will define as 3 rental properties or less) in Ireland has been in train for a few years before the new rules were even published.
There could be many factors for this, RPZ's etc.
One factor is that it is now 2026 and this coincides with 20-25yrs of the rise of small landlords into the market during the property boom. Credit was easy, housing developments were popping up everywhere at pace.

The financing to become a small LL that was available then is not nearly as readily available today to the best of my knowledge. Therefore as some small LL's exit (due to retirements) it is inevitable that that the take-up from prospective new small LL's will lag with restraints on financing, shortage of housing properties at reasonable prices, and government legislation etc.

I know some people that on average income's in 2000's became LL's and will be exiting and selling the property as their pension fund. They have done well for themselves and good luck to them.

However this is not a sustainable long-term functioning rental market in my opinion. And it is my view that their exit is good for the long-term housing needs of the population.

It is my view that housing used as rental accommodation should remain as rental accommodation for long as possible, multi-generational. Individuals (passing on the titles as inheritance), corporate institutions, government agencies should be prepared to rent out properties over multi-generations.

One generation small LL's compete with prospective owner-occupiers turning them into unwilling tenants due to affordability are not required.

If I can find it, some 68% of tenants of private landlords would prefer to own their own home but cannot save because their rent is crippling them. This is bad for social cohesion and delaying family planning. There is a healthy mortgage loan book to finance these prospective buyers if prices could drop some and they could save some. Exiting LL's that put properties up for sale increase the supply for FTB's.

And back to the OP, we are discussing the rules for letting coverted garages, basements, etc. Nothing wrong with them per se, but indicative of what a failure this property market has become for all insofar that the LL's are now fearful of being Landlords!?!!?

If that is the case then I would suggest exiting the market is the best idea. There still remains a healthy amount of people, corporations, agencies that show no sign of exiting the market on account of the new rules.

 

[Greenbook]

Adults enter all kinds of fixed agreements every day and are well aware of what they’re signing up to, car loans, mortgages, jobs, phones etc etc. People should have the choice to agree a lease for the amount of time that suits both parties whether that’s 6 months, 5/10/20+ years.

I agree. I always thought that it would suit many tenants and many landlords very well (myself included as I grow older) if you could grant a long fixed term lease to a tenant at a discounted rent plus inflation/max 4% annual increases. The landlord provides the house with kitchen, bathroom, flooring. The tenant furnishes and provides white goods. The tenant can exit with decent notice. The landlord can only evict for non-payment of rent etc.. The tenant is responsible for repairs and maintenance. The landlord for structure. Both parties can negotiate a new lease when the term is up.

That would be saleable as well with the tenant in situ, because it is akin to a commercial lease for a landlord - very little management or costs involved.

It would many tenants as well.

But there is no such option. Instead we have the crazy situation that if I grant a lease to an 18 year old student, he gets a lifetime tenancy.

 

[Greenbook]

If that is the case then I would suggest exiting the market is the best idea. There still remains a healthy amount of people, corporations, agencies that show no sign of exiting the market on account of the new rules.

You are going to get your wish.

Keep in mind though that a new 2 bed apartment in Dublin costs in the region of €600k. In Cork, it would be less, but not far off it. If the Fund wants a yield of 6% (which is on the lowesh side), that is rent of €3,000 per month.

A German Fund bought 132 apartments in Dublin 8 recently (described as Temple Bar, but looks closer to the Liberties). From memory, a studio rents for €2,300 per month, a two-bed for over €3,000 per month and a three-bed for €4,150.

That's the future in Dublin, Cork and maybe Galway. Expensive Fund owned property.

Large landlords (20 properties plus) many fill the gap in the smaller cities and towns. You may end up with 2 or 3 large local landlords in a place like Clonmel. They'll act as a cartel and charge high rents.

The new rules mean it is just not feasible for the current small landlords to operate any longer. No new young small landlords are replacing us.

That we are older and exiting over the next 10 or 20 years any could have been factored in - my suggestion in the post above could be a partial answer there. Instead we are all being driven out in a wave with no immediate replacement. It'll be a couple of years before the Funds' properties come on stream and that is assuming that they do so at scale. They are international, they may decide the Irish market with its constant meddling is too risky as well.

 

[Sister Sara]

I appreciate that perspective @Greenbook and that is certainly to be considered.

They'll act as a cartel and charge high rents.

To the average tenant, right now, it doesn't matter if it is a cartel or not. Rents are at record highs!

Cartels will be another challenge but not an insurmountable one.

 

[LarryScott]

It is my view that housing used as rental accommodation should remain as rental accommodation for long as possible, multi-generational.

That isn't rental. That is ownership. If they want to stay in the same house (and leave to their decedents), they should get a mortgage and buy it.

They could also negotiate with a landlord for an actual long-term lease, but landlords don't actually want to do that. More importantly, most tenants don't want it either (tenancies are generally 2-3 years).

It is pushing up rents for all tenants so that long term tenants get what they want.

68% of tenants of private landlords would prefer to own their own home but cannot save because their rent is crippling them.

The high rent is not caused by landlords. In fact, every extra landlord that puts a property up to rent pushes down the price of rent for everyone. They are literally the reason rents aren't even higher.

Rent controls are the reason that there is a housing shortage. That shortage is the problem. All the other problems can be traced back to that root.

Exiting LL's that put properties up for sale increase the supply for FTB's.

That is true, though the effect is only short term.

Landlords leaving the market mean fewer buyers for houses, so fewer houses will be built by builders. Eventually, there are the same number of houses for FTBs and the ones that went to the buy-to-let market are just not built.

... but indicative of what a failure this property market has become for all insofar that the LL's are now fearful of being Landlords!?!!?

People are willing to rent out dwellings, but not if the rules are too onerous. This is the cost of those rules, supply of housing is reduced.

Rooms are left vacant which could be rented out if the owner could avoid (some of) the rules.

Those rules may have benefits, but the costs need to also be acknowledged. Not just the costs to landlords (which nobody really cares about), but the costs to tenants. Harsh rules means fewer places available to rent and so tenants end up having a hard time finding places.

You can say that renters in this country don't need them. If they aren't willing to follow the rules, then good riddance. However, in that case, the property owners will simply say, fair enough, and a room that could have been occupied is left vacant.

Admittedly, some owners will still rent out, so it is a trade off. Some tenants get better deals and others end up unable to find anywhere.

 

[Greenbook]

To the average tenant, right now, it doesn't matter if it is a cartel or not. Rents are at record highs!

And the new rules won't change that. They will make it worse. The new system bakes in high rents for all the reasons discussed on other threads.

The next version of the rules won't change that, neither will the version after that.

 

[Greenbook]

This is bad for social cohesion

You are correct there. When the new rules and their 'improvements' make things worse, there could easily be social unrest. You can bet that 'bad' landlords instead of bad policies will be blamed. Yet another reason to leave the PRS.

 

[Sister Sara]

Rent controls are the reason that there is a housing shortage.

This is simply not true. The housing shortage precedes the introduction of rent controls. Rent controls were introduced as rents were rising rapidly as a consequence of the housing shortage. Had there been amply supply, rents would not have increased to the extent they were increasing and there would have been no need for government intervention.

Im not suggesting that the new rules fix the supply problem, they don't. They do give security of tenure to tenants, at least for 6yrs (if needed). And the 2% pa cap is a nonsense if tenants are faced with huge rise after 6yrs.

That isn't rental. That is ownership.

I was referring to the property remaining a rental unit for multi-generations. That it is not taken out of the rental when the LL decides.
A lot of the arguments made here cite how LL's will leave property or rooms empty reducing supply. Many of the same small LL's have every intention of taking their rental property out of the rental when they retire and cash in for pension - nothing wrong with that, but its the same thing. Any LL's selling property now as a consequence of the rules are simply doing now what they were intending to do at a later stage, sell up and reduce the supply.

And the new rules won't change that. They will make it worse. The new system bakes in high rents for all the reasons discussed on other threads.

Yes, I accept that point but it doesn't explain why LL's would leave if higher rents are baked in and ergo, the capital appreciation of the property will also increase?

LL's are leaving because they don't want to be stuck with a tenant (even a decent one) and unable to take their property out of the rental at a later point. Its the same thing, those selling up and leaving are just doing now what they were intending to do anyway at a later point - reduce supply.

 

[Premos]

Rent controls were introduced as rents were rising rapidly as a consequence of the housing shortage. Had there been amply supply,

Rents bottom up in 2013. By 2015, rent control measures were introduced in Dublin because of public outcry.
Rents increased from a low level.

 

[stormy]

The housing shortage precedes the introduction of rent controls

Can you share the details? What was homelessness numbers pre rent controls and now. What were we average rents pre-rent controls and now.

 

[Greenbook]

Yes, I accept that point but it doesn't explain why LL's would leave if higher rents are baked in and ergo, the capital appreciation of the property will also increase?

High rents are baked in now because of the danger of a rent freeze, additional rent controls etc. If you are staying in for the high rent, you may only get one shot at it.

Secondly, if you have to sell with a tenant in situ, the price to the purchaser landlord is entirely based on yield. To get a high price from another landlord, you need a high yield and the only way to achieve a high yield is a high rent. This is the policy lunacy - the new rules whose goal is to bring down rent mean that the rent has to be high because of the risk of having to sell with a tenant in situ. The new landlord will only pay a decent price if the rent is high.

Also high rents are needed to compensate for the fact that if you sell with the tenant in situ you may not achieve full market price at all even with a high rent.

All this is dealt with in other threads and was pointed out by us dim landlords when the new rules were first announced.

That landlords are leaving indicates despite record rents shows that we are not greedy gougers who only look for a high rent. We are leaving because we want a sustainable investment. The risk of further meddling and that we may never be able to exit because of the mess being made of the PRS, means that the investment is not a sustainable one. Hence, anyone with any sense is on the way out.

 

[Premos]

leaving are just doing now what they were intending to do anyway at a later point - reduce supply.

I am 15 years from retirement. I will not rent any longer. I never thought that I would stop so quickly, I thought I would continue during retirement.
Just for information, my father is 84, he is a LL in another jurisdiction

LL's are leaving because they don't want to be stuck with a tenant (even a decent one) and unable to take their property out of the rental at a later point.

LL are leaving for multiple reasons. Not only because they don't want to be stuck with a tenant. At this stage, I would believe that LL are concerned about how much more risks they are going to face and they have absolutely no trust in the government's ability (probably any government) to take into consideration LL's issue. Personally, I think that the current government is making such a mess of it that a future government could make things even worse.

 

[Greenbook]

Rents bottom up in 2013. By 2015, rent control measures were introduced in Dublin because of public outcry.

That is correct, but it is only half the picture.

The house I mentioned earlier, I was renting that to a family for rent of €900 per month. During 2011 or so, I got a phone call one night. They were leaving unless I dropped the rent to €400. I negotiated it up to €500. It stayed at that until 2015 or so when I got it back up to €750.

From what I can tell my increase from 500 to 750 was part of the public outcry as it was a 33% increase. What was never taken into account was the decrease from 900 to 500 and the fact that I never reached the 900 rent again.

Plus, while I'd no issue with the tenant doing this, in his shoes I'd have done exactly the same, I was under financial pressure at the time and that made the struggle worse.

The rent controls came into deal with these increases, but only half the picture was looked at.

 

[bipped]

That it is not taken out of the rental when the LL decides.

Fine if it’s the states property built specifically for social housing. The state has a responsibility to house citizens who can’t provide for themselves. Private landlords don’t.
So why should a privately owned property be left in the rental market if the owner doesn’t want that? If a citizen chooses to withdraw from any business sector, they can sell as a going concern or just cease trading, that’s their right. Afaik, there’s no other sector where the state compels an owner to leave their property in the business when they leave.

It’s fair and reasonable that rules and regulations are followed during the years a landlord provides his property as a rental. However, if they decide to quit the business, why should they be forced to leave their property as a rental?

 

[Premos]

What was never taken into account was the decrease from 900 to 500 and the fact that I never reached the 900 rent again.

I am currently renting a property for the same price it would have been in 2007. At the time I research into it, the rent for this type of property was about 700 to 750(2013). By the time I bought, it was 900 to 950 (2014). Still 300 less than 2007.

 

[Sister Sara]

To get a high price from another landlord, you need a high yield and the only way to achieve a high yield is a high rent.

Or, as in 2026 property prices being at record highs, you could always reduce the selling price to achieve the yield? Just accept that is a factor of the rental market?

LL are leaving for multiple reasons. Not only because they don't want to be stuck with a tenant.

Granted. But one the reasons cited is being caught with a tenant that you cannot evict - its this reason that I was honing in on as it depicts an attitude, to me anyway, that is not suited to being a landlord.

Private landlords don’t.
So why should a privately owned property be left in the rental market if the owner doesn’t want that?

Absolutely, you are right - so can we please stop hearing from private landlords pretending to be concerned about the lack of supply for tenants as a consequence of government legislation? Private landlords are only more than capable of exiting the market, reducing supply by themselves.

 

[Premos]

Granted. But one the reasons cited is being caught with a tenant that you cannot evict - its this reason that I was honing in on as it depicts an attitude, to me anyway, that is not suited to being a landlord.

Eviction is only one part of it. The all rental investment is becoming more risky as LLs are seen as the issue and more and more rules are imposed on them. I actually didn't mind so much the new rules initially. Until I realised that there is no chance that the rules will stay this way very long. What do you think will happen when RPZ LLs start charging the going rate? The current rent I charge is about 1250 (that is a ridiculous low yield of about 3 per cent before tax) I could put it on the market tomorrow for 2200 and rent it. What do you think that would do to the national average rent? I would think there would be public outcry. And then, further rules...