Why are landlords obsessed with getting market rents?

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Sister Sara said:
Thanks @AlbacoreA I think we are close on point without either of us laying monopoly on the defintion of 'landlording'.
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You're thinking it's primary purpose is to provide housing. It isn't. It's primary purpose is to make money.

The conflict is when the govt outsources public housing to the private rental market. That squeezes supply of private rentals, and houses for sale. The govt also massively increase demand. They also massively increase risk of loss, by anti landlord legislation.

All this risk and all these costs are borne by the landlord.

The landlord has to earn enough money to cover over holding, damage, refurbishment, cleaning. These always the risk of recession. Then thersv the cost of renting it. So the rent has to cover all these things.

So any business makes hay while the sun shines.
 
letitroll said:
I think you've completely misunderstood
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Perhaps.

You have given an example of how tenants are extracting excess value through the imposition of RPZ's.

This would be valid in a perfect market, or perfect competition.

The increasing numbers of homelessness, social unrest in communities, and...its just my observation, happy to proven wrong...the near endless news topics about a housing crisis day-in, day-out!

Not least, RTE headlines today that state "

Government signs off on plan for national rent controls"​


This, in a purported effort to entice more landlords and rental accommodation.

This signals to me that when it comes to the fundamental and essential utility of housing our population, now, and for future generations, there is a market failure.

For both sides of the equation - tenants and landlords.

Is that a fair assessment?
 
Sister Sara said:
I would respectively ask anyone who disagrees with this and who is a landlord to exit the market and allow good landlords, who understand what the business is about, to enter the market.
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I would suggest if you think that's how it works go test the water by doing it.
 
Sister Sara said:
I would respectively ask anyone who disagrees with this and who is a landlord to exit the market and allow good landlords, who understand what the business is about, to enter the market.
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Not enough want to enter the market, that is the main issue the government is trying to tackle and you want people to exit.
 
Sister Sara said:
This signals to me that when it comes to the fundamental and essential utility of housing our population, now, and for future generations, there is a market failure.

For both sides of the equation - tenants and landlords.

Is that a fair assessment?
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The govt has been inept in dealing with housing. In fairness all govt have been inept. It's a world wide crisis that came from privatisation in the 80s and then stopping building public housing and privatisation of that. Which lead to Commoditization of housing across the world.

A prefect storm.

Kinda of a bit much blaming a worldwide crisis on landlords the majority of which own one rental. Or did at the start of this.
 
Sister Sara said:
For both sides of the equation - tenants and landlords.
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I think this is part of the problem re:housing in Ireland.....folks always want to drop it down to some bilateral transaction between a developer and a buyer or tenant and landlord.

Its counterprodcutive to get bogged down in such details.

The much more important question is why we have an undersupply of dwellings relative to demographics, GDP and headship rates (which we do). The simple answer is that writ large because of an orchestra of taxes, planning regs, rpz rent caps, building standards factors....it is simply not attractive enough to build new homes/apartments.

We ran this experiment already - remember section 23?......in 2006/2007 the most profitable thing in the country was to build homes for sale....and we peaked out at 90,000 produced in a single year......today we will be lucky to build 30,000 in 2025.....why....cause its not that attractive to build....and putting price controls on the thing you want more off is not the way to get more of it....its the way to get less......and so the crisis will get worse (for renters for sure IMO).

I'm waiting for a price cap to come in now for the sale of houses to owner occupiers.

We are way down the socialist rabbit hole now.....and its very hard to see how we get out of it without first things getting much much worse.
 
KOW said:
Sister Sara has to be a wind u
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I think Sara point of view isn't that uncommon or unreasonable considering the click bait media reporting and govt using landlords to deflect attention from the govt..
 
Regretably folks, it would appear that I am labelled by some here as 'anti-landlord'.

I'm not. Read the OP.

I'm imply recognising the fact that, whether it is boom or bust, there has not been a stable functioning housing market in this country, and further afield, for over 20yrs or more.

By any yardstick, that is a market failure - here, and abroad.
 
Sister Sara said:
I'm not blaming landlords
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They are your sole focus on this thread. That's just an observation.

There's is a bigger context for RPZ and rents. Berlin tried this and it didn't work. So we copied it, and suprise it hasn't work either.

The only solution is more housing and less demand. Landlords are a side show in that.
 
AlbacoreA said:
They are your sole focus on this thread
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Primary focus for sure, they are inextricable from the issue. Here is the substance of my OP

​

Sister Sara said:
You sound like a good landlord, someone who is providing accommodation to others who need it and they are paying you rent. You are obtaining the capital appreciation on the property also.

This sounds like a good news story. This is how landlord/tenant leases should operate. Well done!
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AlbacoreA said:
stopping building public housing and privatisation of that. Which lead to Commoditization of housing across the world.

A prefect storm.
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The more compelling thesis I've seen on why housing has become an issue almost simultaneously across many western democracies is that as the demographics shifted in those countries from a healthy pyramid (lots of young people) to an inverted one (way more old people, generally boomers)......NIMBYISM under the guise of local democracy & planning began to severely restrict supply of housing.....existing holders of homes became the holders of power at local and state governments.....and they implemented something akin to an unconscious & uncoordinated coordinated scarcity regime for the primary asset they owned. Put simply it became deeply difficult too impossible in these demographically skewed countries to get anything suitably located built.....and so resources (financial and human capital) went elsewhere away from construction......and it worked.....housing costs as a multiple of income has climbed ever higher across the OECD. Deeply rewarding for the holder of the asset in question (homes) and deeply difficult for those seeking to purchase the asset.

Put more succinctly the boomer generation implemented a short squeeze on housing......and weaponized the planning system & local government to do it.
 
Sister Sara said:
Primary focus for sure, they are inextricable from the issue. Here is the substance of my OP
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Do landlords create demand or build property? No. If landlords vanished overnight we'd still have more demand than supply. So they are totally separate from housing crisis.

A landlord might have no mortgage but good business is to maximise income or profit. Because the govt legislation massively penalise the landlord if they don't. Landlords didn't create that legislation, but they are bound to it.
 
letitroll said:
the boomer generation implemented a short squeeze on housing......and weaponized the planning system & local government to do it.
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In fairness the banks and poor govt regulation and oversight created the bubble and bust that followed. Govt and politics drove cost cutting to decimate building of public housing.

You're blaming those who took cheap credit not those who provided it.
 
Premos said:
The market hasn't been allowed to work properly for 9 years, even longer as there was a rent freeze previously.
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Yep - funny to watch if the results weren't so tragic.....the Government has literally tied themselves and housing market itself in a spaghetti junction of rules, schemes, help to buy, AHB, LDA's, Infrastructure finance corps.......and what do we get for all that....were going to get 28,000 homes this year is what I hear.

Say what you will about the celtic tiger.....but back then in a market unconstrained by all this red tape nonsense we we're able to pump out 90,000 homes a year.....now we've tied ourselves in so many knots nobody can think of way out of this mess except to tie another few knots every few years.
 
AlbacoreA said:
Do landlords create demand or build property? No. If landlords vanished overnight we'd still have more demand than supply. So they are totally separate from housing crisis.
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Thanks @AlbacoreA. I agree with half the answer to your question.

I agree they don't build houses. Developers build houses on foot of demand.

I do however think landlords create demand by competing for properties that may otherwise be bought by owner-occupiers.

If landlords vanished overnight (your words, not mine), by my estimation some 350,000+ properties suitable for accommodation would come on the market for prospective owner-occupiers.

What would that do to the supply/demand and market price of housing do you think?
 
Sister Sara said:
What is the obsession with achieving 'market rent'?

I do not understand. You let at a certain price in 2014 and presumably you were happy with that? That was 11yrs ago so what mortgage repayments you are liable for (if any) are, maybe 1/3 less the market rate of mortgages than they are now for the same property?

You sound like a good landlord, someone who is providing accommodation to others who need it and they are paying you rent. You are obtaining the capital appreciation on the property also.

This sounds like a good news story. This is how landlord/tenant leases should operate. Well done!
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If you model an asset at 25-30 years & are capped at 2% growth, it won't get beyond any investment case.
 
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