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.
You may not like what this says or implies. You may not want it to be true. You may be happy to sneer and gloat at the person’s experiences, lack of knowledge and misfortune. You may be happy to comment on his stupidity in paying so much for a residential rental property, so evident in hindsight.
But he was doing why lot of other people who do not receive pensions and who were trying to responsibly plan for their futures were doing. He followed advice and received wisdom.
I have made the point elsewhere about the effective subsidies large numbers of private landlord made to their tenants from the years 2008-2014 and this was rejected.
But none of the comments on this have addressed the core issue is that large numbers of the person classified as accidental or amateur landlords are leaving the market, reducing the pool of available properties. The replacement rate is not matching the rate at which the numbers are leaving.
Demographic pressures mean there is more demand for a smaller number of residential rental properties.
That is not changing and no amount of smugness, sneering, gloating, after-the-event smartarsedness or wishful thinking will make it change.
The only action that will make it change is building more residential property to relieve supply-wide pressures and satisfy demand.
Building more residential property will have many primary, secondary and tertiary benefits.
Nothing that is for the greater good will benefit that person, building more will hinder their "investment".
Fact of the matter is that the market was out of balance during the bubble and investors were an inflated portion of buyers. It follows that these investors should be squeezed out of the market to bring it back into balance. This is what is happening this investor.
We certainly do not want a situation where bubble level prices equal a good rental yield (accounting for inflation). This would mean the country is more screwed up than in 2006.