Landlordism 2.0

[thewobbler]

No, I'm saying if you can't afford your rental mortgage without income from tenants, then you shouldn't have one in the first instance. Tough shit.

Renting property is a business, you have to cover your costs. If there was a general inability to cover costs then the house would not have been rented out in the first place and so the tenants would never have had a house.

This is nonsense.

House prices, and therefore mortgages, and therefore rent, are not determined by the usual rules of supply and demand. These figures are determined by speculation levels and investment levels.

The problem is that all that speculation, all that investment, has reached a point whereby housing of any shape or form is an unaffordable proposition for a hefty and growing percentage of the population. Mr "quick buck" who took on a property or two at maximum LtV, and needing rent to always cover his mortgage is, clean and simple, fucked. He can't afford to do anything other than increase the rent, and nobody in his target market can afford to pay his new mortgage rate for him.

So we now in a situation where people are now both metaphorically and physically sleeping outside vacant properties.

f**k the landlords. f**k the greedy, skill less c***ts.

I dont understand this statement in bold. Speculation and investment levels are more complicated ways of saying demand.

Supply and demand is generally associated with needs and wants. No man needs more than 1 car, though he might want a few more. No harm done. No man needs a year's supply of groceries on tap at all times, though he might want to overstock for things he enjoys. No harm done. No man needs more than 10 pairs of trousers. Though m a wardrobe full of them affects nobody.

No man needs more than 1 house. Even if he wanted 2, no real harm. But speculation and investment potential leads them to buying more than they need. It means that property operates in a different sphere.

Which would be okay if it was flowers. Or ornaments. Or paintings. 

But we're dealing with a basic human need here.

f**k the greedy skill less c***ts who drive this stain on society.

I'm away to howl at the moon.

[CK_Redhand]

You can redefine supply and demand all you like, but to say that house prices are not determined by s&d is wrong.

[Look-Up!]

And the notion of having tenants and not collecting rent. That's just a ridiculous scenario to be advocating.

Never suggested that at all. Don't know where you got that idiotic idea from.

Glad you clarified you think it's idiotic to be paying a mortgage on a rental property and not collecting rent.

Of course it's idiotic, equally as idiotic as taking on a mortgage without the ability to repay it independently of rental income. Basic affordability rules.

People borrow all the time on good faith. Business people borrow on the strength of their company and projected revenues. If it goes tits up there's no alternative affordability rules. People with jobs borrow on the strength of their future earning potential. If they lose job or get sick and can't pay the mortgage there's no alternative affordability rules. The house goes.
Renting property is no different. People borrow to get into the game or expand their business. Expecting a return on a highly valuable asset like a house is hardly idiotic.

Expecting it to carry no risk is.

The risk is this instance is a landlord cannot get tenants to pay their rental mortgage. Tough shit, that's the risk they took when agreeing a buy to let mortgage.

Again, if you can't afford a rental property without income from tenants you shouldn't have taken it on.

No one mentioned no risk and no landlord expects no risk. Perfectly acceptable business practice to borrow money on the strength of ROI for partial repayment. You could say the same thing about not taking on a mortgage if you can't repay if you lose your job. But that makes no practical sense. If you were so inherently wealthy not to require a job, or not to need rent, there'd be no need for the mortgage in the first place.

It's about controllable risk and stress test. Whereas before landlords accepted the risk and could afford to carry the can from loss of a couple of months rent or repair job after bad tenants, now there is no control whatsoever and they could be left for an indeterminate length of time (years if you listen to some hardliners) with no rent or recourse. And once the buffer money runs out i.e stress test, their family home could them come under risk. That's the unacceptable risk, a risk they didn't agree to when taking the mortgage, that has landlords wanting out. 

[Look-Up!]

You can redefine supply and demand all you like, but to say that house prices are not determined by s&d is wrong.

Correct CK Redhand. Of course it's S&D that controls price. Demand outstrips supply at the moment considerably.

And market rent is a function of house price i.e demand. I'd imagine it's 7/8% yield (gross) at the moment.

[Look-Up!]

Is the problem not that landlords are charging way and above the mortgage on the property? That would just be pure greed.

That's a very hard question to answer East Down Gael as every situation is different. Market rent is a function of house price, I'd guess about 7/8% gross. You might expect to clear 3% net or slightly better so might look over the mortgage to tenant but not to landlord. But that's simplistic as some of the mortgages could be years old and yield on initial investment much higher. Then again negative equity could have been in play for a very long time in this scenario so landlord might be still recovering costs.

You could argue RPZs have had the reverse effect of what they were designed to do. It's made a lot of landlords more aware of market rent and feel they must increase rent to the maximum every year. This is important for their exit strategy if they need to sell up and get out of the business as if they're charging too low a rent it will hamstring the new buyer to that rent if they are landlords. So could rule out a lot of potential buyers. Then again there are plenty of decent landlords in it for the long haul that are happy to keep rents low for long term dependable tenants. You'd imagine under these conditions the mortgage on property would have to be minimal.

But Leo is right, the haemorrhaging of small landlords from the market is bad news for renters. Even if they are replaced it's still bad as any new landlords to the market will absolutely be looking at market rent as a minimum starting point. So if all the hurlers on the ditch get their way, and you think things are bad now, an even bigger cluster f**k impending.

[seafoid]

You can redefine supply and demand all you like, but to say that house prices are not determined by s&d is wrong.

Prices are determined by the money supply and the level of interest rates. The lower the rates the higher the price.
annual rent is a percentage of the price.

There are 2 economies in the south. The multinational/financial economy grows strongly and the domestic economy doesn't.
The 2 meet in the housing market.

[seafoid]

https://www.irishtimes.com/opinion/2023/03/11/pat-leahy-ending-eviction-ban-could-be-this-governments-worst-mistake/
There is a strong chance that lifting the moratorium on evictions this week could turn out to be one of the most serious mistakes this Government makes.

While there is clearly a strong argument to end the ban in order to keep as many landlords as possible in the market, it is politically reckless not to have either prepared the ground beforehand, or else to announce the end of the ban in three months' time and give that time and space to put in the place the mitigations and protections for tenants that the Government hastily announced this week.

[seafoid]

You can redefine supply and demand all you like, but to say that house prices are not determined by s&d is wrong.

S&D is too simple to explain what is happening. Speculation is like leverage. It drives up house prices beyond the level of demand from the real economy.
This drives up rent. If S&D explained everything, rents would not be 2000 Euro.

It's on the same side as demand but should be separate. How can ordinary people afford 2000 per month ?

[marty34]

20 mins discussion on this on TLLS last night.

A woman with 3 young chilsren spoke about her situation.

While a Senator from FF or FG were on the sofa with a lecturer (I think) who has studied the housing situation in Ireland and compiled reports on it.

He said lifting the ban was definately going to make things worse.  The politician seemed, to me, was just trying to get through the discussion.

The lad raised a really good point though. We're in a housing crisis this past 10+ years  but the governments hasn't dealt with it like a crisis should be dealt with i.e. the Covid crisis. The government threw everything at that e.g. money and resources but this isn't happening with the housing situation unfortunately.

[trailer]

We need to build more houses. It really is that simple. But this isn't just an Irish or Dublin problem, same issue exists in almost every large city in the world. Perth, Sydney, NYC, London are all struggling.
Opposition to new developments needs to stop as well ... cough, cough Sinn Fein.

[seafoid]

We need to build more houses. It really is that simple. But this isn't just an Irish or Dublin problem, same issue exists in almost every large city in the world. Perth, Sydney, NYC, London are all struggling.
Opposition to new developments needs to stop as well ... cough, cough Sinn Fein.

20000 people have unpayable mortgages from the last property bubble.
Building more houses only makes sense if prices come down.
the private sector can't be the solution for social housing.

[J70]

You can redefine supply and demand all you like, but to say that house prices are not determined by s&d is wrong.

Prices are determined by the money supply and the level of interest rates. The lower the rates the higher the price.
annual rent is a percentage of the price.

There are 2 economies in the south. The multinational/financial economy grows strongly and the domestic economy doesn't.
The 2 meet in the housing market.

In the US, higher rates ARE leading to price drops in many markets.

Unfortunately, these drops are coming in already hugely inflated markets resulting from the Covid bubble, and the prices are still unaffordable. And the knock-on affect is that many people who would otherwise sell and move are staying put as they'd rather their current house and low interest mortgage than a move to a larger new house with a much higher interest-related monthly payment. Which means supply is shrinking. Which then keeps prices from contracting too much. Which is leaving a lot of people locked out of the market and stuck with high rents.

[Look-Up!]

You can redefine supply and demand all you like, but to say that house prices are not determined by s&d is wrong.

S&D is too simple to explain what is happening. Speculation is like leverage. It drives up house prices beyond the level of demand from the real economy.
This drives up rent. If S&D explained everything, rents would not be 2000 Euro.

It's on the same side as demand but should be separate. How can ordinary people afford 2000 per month ?

Things can be made as simple or complicated as anyone likes but demand drives all when it all boils down.

Of course there are things that make demand achievable or a pipe dream for the masses. In the case of Ireland it's safe to assume the unit supply hasn't changed much so demand was always there but prices have varied greatly. Money supply is one. When banks were not giving out money, houses were not moving and a lot of people were "renting". It was seen as a very bad time for us but homeless figures were lower. One factor for this is because in that climate occupancy rates were much higher but what country wants to stay in that state.

Wage and wealth disparity drives prices and reduces occupancy rates. Multi nation tech investment had a huge effect in the Dublin rental/buying market. Highly paid/specialised recently qualified individuals were now on the lookout with maybe 3 times or more the average industrial salary. Price wasn't a barrier and fair play to them we all say, what country wants to see their kids still dancing at the crossroads. But it does have consequences. Prices go up and people who can afford it like space and guest rooms which reduces occupancy, further driving up price. Bad news for those on the low end of the wage scale.

Don't know about speculation. I've been assuming when mentioning landlords here that it's the small guy. It wasn't really a speculators market here since the crash unless you had the cash outright. So yes, vulture funds made serious hay here speculating but I don't think they're going anywhere anytime soon so don't really fall into the category "landlords leaving the market". UK market is a bit different too. Don't know if it's the same up north and England but interest only mortgages are still a thing over there so small guy can still speculate. Here, I don't believe you can get interest only mortgages anymore so speculation for the chancer not really an option. Plus I think they have better tax incentives as well.

People saying lifting of the eviction ban will make things worse will probably be proved right but only by default. Government have been asleep at the wheel where backup plans are concerned. Equally not lifting the ban will make things worse, maybe even more so, without a backup plan. Landlords need to be kept in the market and expecting private individuals with limited means to carry the can for social housing with no government support is crazy talk. So dirty trigger word for a lot of people, "incentivising landlords" needs to be seriously explored to keep them in and ease some of the serious concerns a lot of them have about current climate or where it might end. And there needs to be a speedy recourse where rent is blatantly not being paid. Where those individuals then go is purely the remit of government, period. This hardliner BS when it comes to landlords of f**k em, tough shit, scabby c***ts is nonsense and needs to stop. And politicians who feed on that and perpetuate it are complete and utter bluffers only out for votes with soundbites. They couldn't care less about people. It will take a lot of growing up from a lot of people to really solve this issue but I fear the biggest fear of political parties is that the other lot might solve it.

[Mike Tyson]

So do you think there should be any actions available for landlords in cases where tenants don't pay rent? Or just tough sh!t and they should absorb the cost?

Yes there should.

No one mentioned no risk and no landlord expects no risk. Perfectly acceptable business practice to borrow money on the strength of ROI for partial repayment. You could say the same thing about not taking on a mortgage if you can't repay if you lose your job. But that makes no practical sense. If you were so inherently wealthy not to require a job, or not to need rent, there'd be no need for the mortgage in the first place.

It's about controllable risk and stress test. Whereas before landlords accepted the risk and could afford to carry the can from loss of a couple of months rent or repair job after bad tenants, now there is no control whatsoever and they could be left for an indeterminate length of time (years if you listen to some hardliners) with no rent or recourse. And once the buffer money runs out i.e stress test, their family home could them come under risk. That's the unacceptable risk, a risk they didn't agree to when taking the mortgage, that has landlords wanting out. 

Hence why I made the point they should be able to afford repayments without the need for rental income. That is the risk from investing in a rental property - there may be no rental income. Regarding repossession of the family home, surely repossession of the rental property would be the first port of call? Has there been many incidences of "the small guy" having their family home repossessed for not paying rental property liabilities?

I wouldn't advise someone who couldn't afford to lose money in shares to invest in shares because they expect prices increase and they may potentially make some return on their investment. You can expect a return on a highly valuable asset all you want, doesn't mean it is going to materialise and become risk free. Don't see how the principal of investing in a rental property is any different.

As I originally stated, if they can't afford to service the mortgage on the rental without tenants, shouldn't have taken on the mortgage in the first place. I have no sympathies at all for people in this instance. They took a gamble to make more money, it hasn't paid off. That's life.

This hardliner BS when it comes to landlords of f**k em, tough shit, scabby c***ts is nonsense and needs to stop.

something tells me you have a vested interest in this subject!

[armaghniac]

No, I'm saying if you can't afford your rental mortgage without income from tenants, then you shouldn't have one in the first instance. Tough shit.

Renting property is a business, you have to cover your costs. If there was a general inability to cover costs then the house would not have been rented out in the first place and so the tenants would never have had a house.

This is nonsense.

House prices, and therefore mortgages, and therefore rent, are not determined by the usual rules of supply and demand. These figures are determined by speculation levels and investment levels.

The problem is that all that speculation, all that investment, has reached a point whereby housing of any shape or form is an unaffordable proposition for a hefty and growing percentage of the population. Mr "quick buck" who took on a property or two at maximum LtV, and needing rent to always cover his mortgage is, clean and simple, fucked. He can't afford to do anything other than increase the rent, and nobody in his target market can afford to pay his new mortgage rate for him.

So we now in a situation where people are now both metaphorically and physically sleeping outside vacant properties.

f**k the landlords. f**k the greedy, skill less c***ts.

I dont understand this statement in bold. Speculation and investment levels are more complicated ways of saying demand.

Supply and demand is generally associated with needs and wants. No man needs more than 1 car, though he might want a few more. No harm done. No man needs a year's supply of groceries on tap at all times, though he might want to overstock for things he enjoys. No harm done. No man needs more than 10 pairs of trousers. Though m a wardrobe full of them affects nobody.

No man needs more than 1 house. Even if he wanted 2, no real harm. But speculation and investment potential leads them to buying more than they need. It means that property operates in a different sphere.

Which would be okay if it was flowers. Or ornaments. Or paintings. 

But we're dealing with a basic human need here.

f**k the greedy skill less c***ts who drive this stain on society.

I'm away to howl at the moon.

People are confusing speculation, where you hope that that price of property will increase and renting out houses. Now the two are related to some extent, but they are not the same thing.

Food is as essential. Not not everyone grows their own food, instead people invest in refrigerated warehouses and cheese factories and sell food to other people. This isn't much different than building or buying houses and renting them out to other people who do not buy their own
The problem is not people renting out houses, it is that enough people do not rent out houses and the state has been slow to fill the gap.