Even the 'experts' have taken some serious burningshttp://www.irishtimes.com/news/ireland/ ... -1.2906313
In 2006, I purchased a small house as an investment for €610,000, paying €45,750 in stamp duty.
Having been vacant for seven years, it needed significant work – costing €110,000. And so my landlord days began.
Since then, I have had a number of tenants. I have been lucky – they have all paid their rent on time and generally looked after the house. Today, though, it is still worth less than I paid for it.
I had a tracker mortgage, so I was fortunate.
Nevertheless, the rent has never covered the mortgage – and that is before I paid the income tax due on the rent.
Despite this, I have always viewed the house as a pension.
However, the Government has again and again changed the rules.
Firstly, I used to be able to claim 100 per cent of the mortgage interest as a taxable allowance. In 2009, it was reduced to 75 per cent.
Secondly, a property tax was introduced which now costs me €573 a year. It is not deductible.
Furthermore, all of the rent is classed as “unearned” and subjected to PSRI, even though it is used to pay down debt....
...Meanwhile, the Residential Tenancies Board has increased its registration fees. In isolation, none of these matters are material. Together, they make the decision to become a landlord very questionable.
My current tenant arrived in June 2012, paying €1,450 per month – €100 per month less than the asking price.
I have always been relaxed about the rent and took the view that it was better to have a good tenant instead of a market-topping rent.
After two-and-a-half years, I spoke to the tenant about increasing the rent. By then, the market rate would have been about €1,800 monthly.
My tenant told me that he hoped to buy a house before Christmas. I agreed to leave the rent alone for a further six months, telling him that we would review it afterwards.
In June 2015, we agreed a €100 increase. It was still below the market rates, but it was done to help him and his family to save for a deposit. It was also done as a short-term measure....
...In 2015, my investment generated a before-tax return of 2.05 per cent.
For me, the decision to sell up is easy. Being a residential landlord provides poor returns; it is time consuming and it carries risk. It is certainly not worth the reward.
Being a landlord is a business. However, continual Government interference means it is a business in which I no longer have any interest.
When I sell up, the house will not be bought by a new landlord – since the new rules state that the rent the new owner would be entitled to collect is linked to the rent I collected.
As such, it is likely there will be one less rented property available.
Even before the latest changes it was clear to us in Lisney that an exodus by landlords had already started.
More than a quarter of all our sales this year were houses sold by investors getting out of the market. Just one-in-seven of our sales went to investors.
Less than four months later, the Government changed the rules again and imposed a two-year rent freeze.
Naturally, I felt a little stupid.
Roll on another year and there has been yet another intervention.
This time it is a suggested 4 per cent cap on increases. In June next year, I would be able to increase the rent to a maximum of €1,676 per month.
Meanwhile, my Lisney colleagues tell me the house would command about €2,100 per month if it was newly let.
James Nugent is chairman of Lisney
I don't know if this guy should be working in Property at all!!!! He seems more suited to a not-for-profit NGO!