Mountain Man1
Registered User
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- 6
Is theHi Brendan et al,
This is my first time to post a message so I hope I am posting in the appropriate section. I am writing this piece re forthcoming proposed rent controls from an accidental landlord perspective so would appreciate your thought on a dilemma I see down the road next year for myself and my current tenants who are on rent support. This is based on purely what I am hearing at the moment in the news etc.
I am what you would class as an accidental landlord for the last 8 .5 years and have an investment property in Dublin. During this period I have been on an interest only mortgage which is up for review next Feb with the bank . Over a number of years I had to gradually reduce the monthly rent by €100 each year due to tenants coming & going coupled with market forces at various times over that period. In essence, I had to put forward €600 or so from my own pocket just to meet interest only . No different to any other landlords in similar circumstances & I fully accept my responsibilities etc .As market conditions improved I have gradually increased monthly rent back by €100 - always in line with market conditions and have examples of properties in local area as evidence or even reached out to local estate agents for validation. For the last 4 years or so I have had tenants on rent support.
Here lies my issue - I now see that my investment property is €100 or so below market conditions in the local area and have had this verified by local estate agency and sites like Daft.ie .I was planning to increase the rent by a further €100 next May when tenancy comes up for renewal.I cannot continue to absorb €100 as I have recently become unemployed , have v young kids etc. I see a dilemma down the road her for both my self and the current tenants who are a family on rental support with me for the last 2 years. It looks like I will not be able to increase the rent next year and I will likely have no alternative but to end the tenancy and advise tenants I am selling up but only to rent it back out 1 month later at the higher rent of €100 to new tenants. For some reason I think you are going to see more landlords consider the same approach. However, if there was going to be some provision in the new legislation to be approved by cabinet that will conversely allow landlords who are renting a property below market value at the moment to have the right to increase the rent to market conditions at time of next tenancy review . I would personally prefer them to stay next year but in line with rent at market conditions.
I suppose I would appreciate your thoughts & insight on this scenario and do you see this approach happening with some landlords next year ?
What’s stopping you from increasing the rent to the market rate at the end of the current tenancy?However, if there was going to be some provision in the new legislation to be approved by cabinet that will conversely allow landlords who are renting a property below market value at the moment to have the right to increase the rent to market conditions at time of next tenancy review . I would personally prefer them to stay next year but in line with rent at market conditions.
I suppose I would appreciate your thoughts & insight on this scenario and do you see this approach happening with some landlords next year ?
I suppose I would appreciate your thoughts & insight on this scenario and do you see this approach happening with some landlords next year ?
Good advice! huge levels of negative equity here and no capacity to reduce the capital on 989k of borrowing. Given the high levels of negative equity you are wasting money in applying any personal funds to reduce the capital on your main mortgage. redundancy funds are surely needed to supplement your living expenses until you get replacement employment. Insolvency is not attractive but given the debt position here it must be looked at now. Also given your unemployment situation, there is little that can be done to you in an insolvency situation.Would your wife and you not be better off getting rid of everything and renting on her salary and going bankrupt? Is the idea of selling the family home divorce talk?
I don't see any sense in you paying your redundancy into a moneyless pit unless there is light at the end of the tunnel.
this can has been kicked well down the road already. taking a bank perspective I would tend to nurse this position along as long as the primary mortgage is being paid. It is quite clear that taking an aggressive stance on the BTL debt where patently there is no capacity to meet an element of capital payments will lead to an impasse with the client and a realization of the negative equity in the properties. All indications are now that there is no affordability to maintain the existing repayment schedule beyond a limited period and that ultimately MARP will come into play on the HL.44brendan, what would the banks view be in the case above please. Is it can kicking?
Accidental landlord with 2 investment properties - that was some accident.
interesting that he says in an earlier post that both properties were previous PPR. I'm aware of people during the boom who were moving up the ladder and were told by their banks, why sell your existing house, you can rent it out and we'll give you a 2nd mortgage, I wonder if that is what has happened here?
That makes sense, and it's probably what happened, especially seeing as it's the same bank that was imprudent in lending on his current home. You've reminded me of my brother actually, he was told the very same and told they'd give him more than half a million if I remember correctly to buy a regular nice family home in not an urban area and he thought the banker he was speaking to was nuts. Boy is he glad now.
The term 'accidental' was annoying me this week because of all the landlords on Joe Duffy describing themselves as 'accidental'.
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