Who would be a landlord?

stormy said:
Do you have data to support this assertion? I would very much doubt the vast majority is getting anything close to market rate.
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My first assertion was about current landlord sentiment, which isn't easily measured, but can be observed in this and other threads. There is a level of negativity that is hard to understand. Yes there are challenges but the benefits are greater imho.

With regards to the RPZ restrictions. I haven't checked your figures but you are correct rents have not kept pace with general inflation since 2021. But over the longer term, rent inflation has been significantly above mortgage interest rates (tax deductible) and the underlying assets has also risen significantly. On a total return basis landlords have done extremely well, even in the past 4 years under 2% RPZ regime.

During this period we also had tax changes that have helped landlords (tax credits, 100% mortgage interest relief) which is rarely mentioned but also material.
 
Banquo said:
On a total return basis landlords have done extremely well, even in the past 4 years under 2% RPZ regime.
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To realise the total return, they would need to exit the market, right?

Even if they do exit the market, what do you think the total capital appreciation is over, say, 20 years? Based on the average house price index.


Banquo said:
rent inflation has been significantly above mortgage interest rates (tax deductible)
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How is this relevant? Irrespective of how it's financed, I'm making the point that the real term income is mandated by law to reduce annually (unless sitting tenant moves out). Real terms income has reduced by about 20% in the last five years alone. Even if there is no mortgage, you can see it's real terms income decline.


Banquo said:
During this period we also had tax changes that have helped landlords (tax credits, 100% mortgage interest relief) which is rarely mentioned but also material.
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Not sure what period you are referring to, but over the past 20 years - relief was allowed at the start, removed and then slowly reintroduced, yes. I don't think it's lost on any property owner who saw that relief removed. No other business had interest deduction relief removed post the GFC.
 
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Banquo said:
On a total return basis landlords have done extremely well, even in the past 4 years under 2% RPZ regime.
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It just so happens that, after house prices not far off halved during the recession, Ireland has had a bounce lasting over a decade, so right now the capital value of your rental is high and has risen in recent years. But here's a standard warning "investments can go down in value as well as up".

In evaluating how sensible any investment is you have to look forward and it's dangerous to assume capital value will continue to increase in general, but for owners of rental properties there are a couple of specific reasons to be wary of doing so.

First, your property has a particular valuation, eg you think your rental house would sell currently for 500k. If you feel it a good idea to sell it you can start a process that results in you getting around 500k in your bank account in 6 months or so. But if you re-let that house, under the new rules as soon as the tenancy passes the initial 6m notice period the current valuation of your house falls, depending on the details of it and location, probably to something like 350k or it could be easily lower than that.

You have been hit by a huge illiquidity discount, and you did it to yourself. How does your total return look now?

Now, you might be fortunate and the tenant might choose to move out before you actually do want to sell - in which case you write that discount back onto the valuation of the property and sell it for the 500k. But you might not be. The tenant might just stay, and stay.

And then there's the second thing. There are General Elections and the FF/FG government is tired - the people may decide it's time for a change. The only change relating to rental property on the political horizon is leftward, towards transferring rights from owners to tenants. And one of those political outcomes could easily be an eviction ban whenever a tenant is 'at risk of homelessness' (so almost everyone) which means paying rent would for many tenants become a matter of choice.

How's your income return looking then?

Another one would be an electoral promise to 'give tenants proper security of tenure' by doing away with the small landlords' option to get vacant possession after 6 years (and ditching the 6 year rent reset obviously). Your valuation, that you thought was returning from 350k back up to 500k as you approached your 6 year option to sell with vacant possession, just dived down to 350k again.

Did I say 350k?

No, shouldn't have done that, because the new government, with who knows, maybe PBP or equivalent as junior partner, just converted the RTB rent register into a reference rent system (after all that's what the Housing Commission said it wanted it to be called) in which maybe you have to decrease your rent to the average of 10 examples sent to you be the RTB. Now it's talking about giving sitting tenants the right to buy - at the current 'with sitting tenant valuation' but with all previous rent paid to the landlord deducted from the purchase price.

So the current valuation of your house drops to 250k. How's your total return looking now?

The prospects for any investment are always forward looking. It's a natural human thing to look backwards and thing 'that's done OK - onward and upwards' but you are supposed to just look at the landscape ahead. And when you think about what might be an acceptable total return, you cannot sensibly do so without considering associated risks to that total return.
 
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stormy said:
To realise the total return, they would need to exit the market, right?

Even if they do exit the market, what do you think the total capital appreciation is over, say, 20 years? Based on the average house price index.
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Selling, bequeathing, gifting, donating or even borrowing against the value. Many ways to extract value, not sure what the point is though.

Not sure about 20 years, it depends on so many variables about the property. I know my property has risen about +250% in that time.

I referenced mortgage interest rates because that typically is the largest expense for a landlord before tax. I measure my return based on the cost of the investment. General inflation captures costs I don't bear in maintaining my investment.
stormy said:
Not sure what period you are referring to, but over the past 20 years - relief was allowed at the start, removed and then slowly reintroduced, yes. I don't think it's lost on any property owner who saw that relief removed. No other business had interest deduction relief removed post the GFC.
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The relief was never removed. It was scaled back (to 75% I think). We all know the exceptional circumstances why the government needed to raise extra revenues. The government doesn't consider property investment as an entrepreneurial business. Its not a productive endeavour, it doesn't create jobs. The comparison is not valid. People may disagree but that's the policy. I think it's reasonable.

An alternative option to property is to invest in the equity market but the government doesn't give me any tax relief on any interest borrowing to invest in the equity market.

In my first post I was simply providing a counter argument for investing in residential property. The drivers are supply and demand, and supply has not kept pace or likely to keep pace in the next few years imho. Hence I remain invested. I'll leave it there.
 
stormy said:
On this point, it's worth flagging the new rules incentivise bad behaviour from the accommodation provider.
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If only certain things affect price, then only those things and nothing else will be upgraded/maintained.

Why make the house nice to rent if there is no premium.

Tenants may find that dwellings have high BER ratings, every room is a "bedroom" with a double bed (though only 1 person allowed per bed).

The effect is that the rules get more and more exact to cover everything that landlords have no incentive to provide otherwise. You get policy to fix the problems with previous policy.
 
Banquo said:
not sure what the point is though.
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Just simply stating that for the majority, the only way to realise the gain is to sell their investment / exit the market. Very hard to borrow against it in Ireland. For those of us that have renovated places ourselves etc, it's hard to sell. More an emotional thing I guess, but still hard.

Banquo said:
Not sure about 20 years, it depends on so many variables about the property. I know my property has risen about +250% in that time.
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That's the reason I asked for the house price index is to get a representative view.

The national index of house prices increased by 26% from Dec '06 to Oct '25 (HPM09 table as per CSO). Inflation over the same period increased by 33% (CPM01 table as per CSO). Ignoring cap gains tax, they have lost out in real terms on the increase in principal. After Cap Gains gains are paid at 33%, they took a hit in real terms of 12% on the house price (((100+(126-100)*(1-0.33))/1.33)-100)/100 [0.33=tax rate, 1.33=inflation factor].

I had this posted here also.

Banquo said:
I referenced mortgage interest rates because that typically is the largest expense for a landlord before tax. I measure my return based on the cost of the investment. General inflation captures costs I don't bear in maintaining my investment.
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Again, I'm curious if you have data to support this? I don't think, on average / in aggregate, this is true. i.e. I don't think the amount of debt outstanding relative to property values is very high, the BTL loan book share of banks has been shrinking for quite a while now. Correct me if I'm wrong, but in aggregate I believe the BTL Loan Book Value is only about 10% of the value of BTL properties. Hence for majority, interest expense is not so material / relevant.

Banquo said:
The relief was never removed
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Sorry, you are correct. It was reduced, not removed. But my point is that the tax position did not change much over 20 years (counter to your assertion that this was a material benefit to property owners). The tax credit you mention is €600, and that has quite a lot of criteria one needs to satisfy otherwise its clawed back.

Banquo said:
An alternative option to property is to invest in the equity market but the government doesn't give me any tax relief on any interest borrowing to invest in the equity market.
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This would make sense though right - as the company itself gets the tax interest relief on its borrowings. It's not comparing like for like.

Banquo said:
In my first post I was simply providing a counter argument for investing in residential property.
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I just asked for data to support that counter argument. I appreciate your specific case, but I don't think many people hold a property which has a price 3.5x of what they paid for it.

The facts are:
>on average, there has been no real terms gain in residential property values over a 20 year horizon (data sources above). I suspect you would come to the same finding if you extended the horizon.
>It's also a fact that for accommodation providers with sitting tenants in RPZ, they have taken a real terms hit on rental income of ~20% over the last 5-6 years, and unless the tenant moves out, they will continue to see real terms income reduced (data here)
 
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faketales said:
What?
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You want 1 tenant per bedroom to prevent overcrowding.

The RTB register lists number of bedrooms and beds, so you want a higher number for both to get best rent. The main thing is that you want anything in the register to be high and ignore anything that isn't tracked by the register.
 
LarryScott said:
You want 1 tenant per bedroom to prevent overcrowding.
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I suppose ideally you would just have a single person in a four bed house?

But in reality it’s probably a family?
A couple in a one bed, two couples in a two bed etc.

So what no couples? I’m not sure you can prevent a partner moving in without good reason.

You sound like you are trying to control the personal lives of tenants because you can’t profit from it.

Two in a bedroom is not overcrowding.
 
I'm a landlord and not planning to exit just yet and actually decided to defer selling a vacant property, going to roll the dice and hope I get a short-term tenant and possibly sell then if equities look more appealing.

As has been noted by others, there is a strong preference now to get a short-term tenant, whereas previously, i wanted to get someone who might stay longer term

Would i buy a property now to let out, absolutely not unless there were some unique circumstances that made it more appealing
 
Cameo said:
As has been noted by others, there is a strong preference now to get a short-term tenant, whereas previously, i wanted to get someone who might stay longer term
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That is going to be an issue going forward. Whereas before you'd be looking for a long term tenant, not now though. This is not because we want to jack up the rent every time a tenant leaves. It is the flexibility. When the tenant leaves, you can sell if you want. Also, if more restrictions come in (highly likely) again, you have the flexibility to sell. If you have to sell it situ, a short term tenant is a much more attractive proposition for another landlord.

Amazing that the Department of Housing didn't spot the clear incentive they are creating. They will eventually spot it and that will result in another harsh reaction and restrictions. We are only acting in accordance with the playing field they created. They won't see that, of course. It'll be dodgy, dishonest landlords again.
 
QUOTE="Greenbook, post: 1987841, member: 118384"]
That is going to be an issue going forward.
[/QUOTE]
It has been my position since the change to unlimited tenancy in 2022 as I wanted to keep flexibility and be able to get out easily if legislation became even more drastic. Worked so far. But in terms of housing it means 2 things: it does work for long-term tenants, it also meant I had 2 long periods when the property was not occupied as with low rents the incentive to work hard to put the property back on the market quickly was diminished.
I don't intend to do that again as I think that short-term tenants are going to become more difficult to spot.
 
Greenbook said:
Tenants will also claim to be short term
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Say a landlord decided to give a FTC for six months. So the tenant knows from the start that it will end and an NoT will be issued to stop the lease becoming a TMD. Is that possible?
 
bipped said:
Say a landlord decided to give a FTC for six months. So the tenant knows from the start that it will end and an NoT will be issued to stop the lease becoming a TMD. Is that possible?
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Currently, I would think that it is, but you have to be very careful with your timing. The NoT is invalid if you don't give exactly three months notice.
 
Greenbook said:
The NoT is invalid if you don't give exactly three months notice.
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Heh, it's exactly 90 days, not exactly 3 months :).

I wouldn't leave it as 6 months either. I wouldn't write 6 months in the lease, write 175 days (6 months is at least 178 days). That ensures that you don't go over the limit.

If the lease says 6 months, then the tenant might be able to say that he is entitled to stay for the full 6 months and so any NoT evicting him before that is invalid. He then stays 6 months and gets a 6 year tenancy.

Once you set the duration to 175 days, you can then issue a NoT any time within 90 days of the end, but it has to be exactly 90 days. It would probably be worth issuing on the earliest possible day and then challenge your own NoT. That gives maximum scope for re-issuing if there is an issue.
 
LarryScott said:
It would probably be worth issuing on the earliest possible day and then challenge your own NoT
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Thanks Larry. Do you know current timelines for disputes? I've an ajudication case running for 7 months now without any sign of the determination order. It took 5 months just to get the hearing. No update since. RTB have ignored all requests for an update. Do you, or anyone else, know the timeline for mediation disputes at the moment?
 
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