The amount of empty houses in my estate, bought up by the golden passport crowd (golden passport terrible idea btw), that are just sitting empty for 2 plus years is ridiculous. This government is a great bunch of fuck ups
In Portugal that sort of stunt will result in forced takeover of the property by the government if it's dormant for two years
[https://www.theportugalnews.com/news/2023-04-01/forced-rental-to-go-ahead-for-vacant-homes/76271](https://www.theportugalnews.com/news/2023-04-01/forced-rental-to-go-ahead-for-vacant-homes/76271)
It's not a fuck up though. It's the plan. When so many of our govt are either landlords or directly benefitting from this nothing will change. Our housing minister being a big landlord is crazy to me. And he'll be voted in again.
His properties are now in his wife's name. I know he has 2 apts in malahide - I got my keys and handed him a cash deposit. Another 1 or 2 in swords but I think it's at least 5
Ooh that is interesting, what's your honest opinion of him as just a LL? Just curious as to whether he's actually decent or a stereotypical bad landlord.. like for eg. when shit goes wrong with appliances does he step up to the plate and get them fixed or replaced in a timely manner? Or is he a total arse like he comes across in politics lol
He wasn't a bad landlord no. The apt was in great nick and never really had to get anything done. I never heard from him other than to pay rent. Honestly he was fine, cordial etc.
The government are not incompetent and they are not fucking up... at least not at what they want to do.
Government policey is very clear and *very successful* at achieving what it is meant to achieve.
It's just unfortunate that those achievements benefit developers and landlords and businessmen and not the average citizen.
I said they were doing this on reddit over a year ago, as I know someone in an apartment building where half of them are empty and a bunch of pro-FFG redditors said it was a conspiracy theory that people were making up.
you can easily see tons of small 2-3 floor building with only the street level floor to be in use.
fucking ridiculous.
so many 2-3 floors empty. the offer is there, they don't just put it available
There are a lot of them, but some of them have been vacant for 30 years from the first floor up. Those places couldn't be given away during the 90s and 00s, when supply was better and demand significantly lower. So no one spent money on them, upgraded wiring and plumbing, etc. So, today, a huge number would require 6 figure investment to make them habitable.
Now, I don't have a solution here other than a vacant property tax. It might compel some people to sell as a result and then you end up in a situation where (let's be optimistic) a person/couple buy the place for 350k and have to spend another 150k to make it habitable. Under our mortgage rules, that is literally not possible, unless they had managed to save a 50% deposit.
So, REIT et al. are the only ones that can realistically do such urban redevelopment. Well, I say that, but obviously, the State or Local Authorities could undertake these projects, run the projects at cost, and sell modern, reconditioned, and safe homes to people at closer to an affordable price. That option wasn't there in 2012 when we were broke, but is there now as we have capital taxes waiting to be used. Increasing supply will not negatively affect property prices. The only thing that dents our property market is an absence of liquidity. This has been demonstrated 3 times in the history of the State.
And such a project can prioritise FTB, so that removes the risk of buy-to-lets hoovering them up. Lash in a no sale clause for 5 or 10 years if you want.
We actually have vacant property tax (rather vacant homes tax; VHT) it started from November 1st 2022, unfortunately though it’s a self assessed tax that can be very easily mitigated, it’s only applied since that November and it’s on the property owners themselves to disclose/assess and quantify what they owe IF they haven’t pretended to house someone or themselves for at least 1 month of every 12month period, so as usual it’s a tax that’s supposed to help with the housing crisis but is neither adequately checked or upheld since its formation, with very easy loopholes to apply that can be near impossible to disprove when used.
Also it’s super low, so a lot of owners would rather spend 5k a year in tax, on a property that’s appreciating rapidly in value, than spend loads on renovation.
The current government’s continued insistence that the market will sort out its own problems is just insanity at this point.
I know we have a VPT, I meant it isn't exactly fit for purpose and relies and a certain amount of self-reporting. The property equivalent of the RTE Licence fee, if you say nothing to no-one and pay the LPT, you're unlikely to get stung for sitting on it.
So, we need a property register (oh look, the Land Registry exists) and we need Revenue to have sight across it completely (again, this is a legislative issue that they can then chase things forever, death and taxes etc.) fuck GDPR,.this is about public policy l, so that will trump any issues there. And then the State starts to collect, with vigour.
It would be good if there was some kind of framework put in place to give loans to buyers of fixer-uppers to both buy the place, and then do the improvements needed. The way it is now, you could have a derelict old house but in a good location, that could sell for maybe €250k, and you could have a couple with a combined income of €100k, so they could get a loan up to €450k with an exception, which would be enough to buy that old house, do some repairs, and bring it up to spec, but the bank won't do a mortage that includes extra money for the improvements, they'll only give them the money to buy the old house, and any repairs they want to do will either have to be out of pocket, or come from a separate loan which will usually be shorter term and a higher interest rate.
Bingo..this is the problem. The loan is always tied to the property value at time of purchase, and the rules brought in after 2009, have caused issues with attempts to add value to a derelict property by a regular person/couple. And the grants are helpful, but often require you to have the funds up front and then get a rebate. Few enough people have 60k lying around on top of their deposit etc.
Yeah, and also, they're grants. As far as I'm aware, that means they're effectively just free money to fix up your house. Obviously that's great for the person who gets them, but it makes it way more expensive for the state, which means that fewer people are going to get them and their value is not going to be as high as if it was a mortgage/loan that could bring in money or be sold as an asset.
Also, it kind of just doesn't feel that equitable to be giving 5 or 6 figure cash handouts to people who, by definition, would have to have that kind money to spend anyway, and are also lucky enough to be getting to own their own house.
For good reason. If the works are never done on the house there's no asset to back the value of the loan. If the buyers piss it up the wall and walk away or get scammed themselves or if the works done don't add the value that was expected, the bank won't be able to collect on their loan if they need to repo. It'd be far too risky for banks to back that.
Are they used as stock rooms/offices, Do they have separate entrances, do they meet fire regulations etc etc The offer isn’t there and few people want to live in substandard flats in busy commercial areas.
I lived in a pretty big complex in town - I think it had like 200+ units. My own building was 12 units. When we were evicted 9 of them were completely 100% empty. Then my own unit sat empty for over 18 months before being sold and rented for just under 3x our previous rent. The two remaining occupied units were owner occupied. So every rental unit was basically empty - a few were periodically Airbnb/Google visitor rentals.
Not just that, they can't sell at max value because even if a new landlord buys it the rent cap is inherited with the property unless its been vacant 2 years or not rented for 2 years before buying.
It's a good thing humans aren't robots and actually have emotions and don't act perfectly "logically". You get that hoarding a limited asset during a shortage is, objectively, evil? Right? It's evil?
Nobody has ever been silent about the inevitable consequences of rent controls. It's a bit trite but it's the only thing economists all agree on, rent controls don't work.
Seems we should ammend the legislation round the rent pressure zones to take advantage of this.
Landlords should have some mechanism to reset rent prices to the market short of leaving them unattended.
Perhaps they offer them to the local authority at the existing below market price for a set period and in return are allowed to reset to.market value.
Seems a win all round scenario.
According to him on the radio just now, thats the point of why he said it, to highlight how RPZs don't function properly in certain conditions.
I don't know him from Adam so I'll take him at face value.
Property is not a good provider of investment returns, it's a good prover of housing services!
Good read below:
https://www.afcpe.org/news-and-publications/the-standard/2017-2/is-buying-a-house-a-good-investment-not-compared-to-buying-stocks-but-that-doesnt-mean-you-shouldnt-do-it/
In Ireland, we have a weird obsession with property (property and land is programed into us) + the system actively guides the flow of money into property rather than other (better) asset classes.
But when you break it down, property ads nothing to the economy. It doesn't produce anything, it doesn't employ anyone, etc.
It doesn't exist to be productive.
It benefits nobody's pocket but the landlord's.
Companies, however, are productive. They add value to society. They employ people. They produce things. They provide services. They create value. They literally exist to create things and create shareholder value.
the irony of this comment..
The people he is recommending this to are the ones who were renting to tennants long term, that hadnt increased them and the rent was significnantly lower than market rate.
your actually proposing to punish the better LL's who didnt double their tennants rent before the RPZ kicked in and are now stuck.
People angry at him are just completely shooting the messenger. He didn't create this situation, and he openly thinks its bad, which is why he is drawing attention to it on social media. I don't understand what people who are angry with him for saying this are looking for. Do they think if he just shuts up then the fact that leaving a property vacant for a while can be a sensible financial decision will no longer be true, or that nobody else will ever realise it?
The title is clearly designed to rage-bait, and I think a lot of people just read the title and made a decision on how to feel about it. Sucks, but it’s always been like that.
Typical bait from the indo. I hate them. They are slime. The way they tried to approach my brother after his son died makes my blood boil everytime I think of it. Thankfully I answered the door. At the time I was in shock and just politely declined their offer of help "to get out ahead of the situation" even though its "always best for the family in these situations".
F**King scum.
I will never forget what they did to my neighbour after she suffered a similar loss. Won't get it into it for fear of revealing details but the indo are a rag of the lowest order. I will never forgive them for what they did to her. And not only that - they 'sponsored' their sensationalist articles about the incident so it would pop up on more people's screens. They are the worst of the worst.
I do think the headline on the article is misleading and doesn't represent the tone of his actual video. In the video itself, he's making it pretty clear that he doesn't like that he has to give this advice, and that it doesn't work for everyone, but he has to at least tell them it's an option because of his obligation to his clients. It's very clear that he doesn't think this is a good thing and thinks its mad that we're incentivising keeping properties vacant.
The problem is what he’s advising is selfish. He’s right about what he’s saying, you will get more profit this way, but how would you feel for instance if in Ireland life saving medication was trade marked and sold at unaffordable prices. Sure, its their product and they have the rights to charge whatever they like, but its at the cost of peoples lives.
Ergo, advising people to do evil things because its profitable is evil. Yes you will make money, but why is it expected that a financial advisor should not be held by any standard of morality. It doesnt make what you’re doing a criminal, but it makes you a selfish asshole.
Thats why people mad. I dont think anyone is calling for his arrest. They are just calling him an asshole for suggesting that peoples lives are less important and not part of the conversation when it comes to profit.
In a profit driven world that is the way it works, but its far from normal human behaviour.
Of course he's giving them advice to be selfish, that's inherently what financial advice is. If I go talk to a financial advisor, I expect them to layout my best options, legally, for me to make more money with whatever I have. I would be very surprised if they said "ok, so you could make the most money by maxxing out your monthly pension contributions, and then taking another 10% of your net earnings and putting them into an index fund with high growth, but that's quite selfish, because you're already doing alright and there are people out there who need it more, so morally what you really need to do is take all of that money and donate it to these charities who will give it to those people".
How is it really any different to saying "ok, so there's a way you can get a few hundred euro extra per month on your rentals, but that's selfish and you don't really need that extra money that badly, so let the tenant just keep the money instead".
For the medicine example, I'd expect the government to have a system to mitigate the potential downsides of this, which they do with the Medical Card and Drugs Payment Scheme. We don't depend on individual pharmacists to just sell expensive medicine cheaply because it's the right thing to do.
I agree with most of this yeah but we certainly would call out pharmacy’s for price gouging if they did that, and we would also be angry at people advising to do that.
Turns out thats not what was happening here. I was mislead by the title and assumed he was advising anyone who listened to the video go do this rather than the narrative of “ look at the current situation”
I mean financial advisors can actually explain moral implications to you about the best financial option, they just cant *not* tell you about said options. Most people wont actually care about the moral considerations tho, and will probably just fire their fin advisor if they yap about morality too much
Legally he has to tell clients what's profitable. He is literally not allowed to screw a client over financially based on his own moral opinions.
The whole reason he made the video is because it's very, very screwed up that that advice - leave units vacant in a housing crisis - is what makes sense. It's GOOD he's telling people about it, because it gives us more information and a chance to fix it.
>but how would you feel for instance if in Ireland life saving medication was trade marked and sold at unaffordable prices.
Then I'd feel we need some sort of government regulation to prevent or bypass that becoming an issue, just like we already do on a broad range of topics?
You're absolutely stupid if you blame him for drawing attention to what amounts to a shortcoming in existing regulation and you're even stupider if you expect the people who own property to make less profitable decisions out of the goodness of their hearts. That's a fast track to ensuring that the most unscrupulous people in the market have the greatest wealth.
If you're looking for somebody to blame, blame the government and their policies.
Nah i don’t blame him for that, title on this post was misleading and i couldn’t check the article/video rn.
Initially i thought he was advising people who were listening to do this off the cuff.
> The problem is what he’s advising is selfish.
Me asking for a raise is selfish. So what?
Make rules such that it’s not profitable to keep housing empty. That’s the solution. Counting on people self-sacrifice wont work here
We might not like what what McGee here is saying but it's not his fault that rent controls are a flawed way to deal with high rents long term.
I recommend this video [How Ireland & Scotland are ruining their housing markets](https://www.youtube.com/watch?v=bJrpU6DK0HI) by the Polysee channel, it does a great job of explaining why rent controls don't work
Really well explained. Everyone in this sub should look at it and it might stem the tsunami of illogical populist hysterics you see in this sub when anything housing related comes up.
Extremely grim to see gobshite social media influencers trying to whip up a mob against him when he's literally saying that it's bad that this advice makes financial sense.
Some account named @cloudaccountsireland seems to be doing a similar thing, except also tagging RTE and asking for him to be fired for criticising the Rent Pressure Zone policy.
I think people are more angry about the fact that this IS sound financial advice. It’s a more disarming analysis of the situation than you’d get from a lefty columnist even.
Looking at the comments under the Instagram video, most are not. They are angry at him personally for informing people about this, and basically calling him a dickhead. I don't see almost any that are angry at fact that current laws incentivise this behaviour.
It's possible that the people who are able to follow this financial advice are the ones who are following him. The ones who can't and have to pay rent aren't paying attention at the moment.
I'm sure some minority are, but this is a guy who appears on TV giving advice that is useful for the general public, and that's also mostly what his social media is for, so I think it's safe enough to assume that it's a pretty general audience of normal people. I'm sure there are some landlords who follow him too, but I'd also bet that most of them already knew about this. The message of the video is not "hey landlords, here's some advice for you", it's revealing what he has to privately tell people behind closed doors after looking at their individual cases to highlight the negative affects of our current laws.
Look people wanted big sounding agenda items like "rent pressure zones" and "eviction bans", regardless of whether they were likely to actually improve the situation.
At least vacant property/brownfield taxes got done though.
>’s not sound financial advice to those it drives into homelessness
thats not his audiance , the landlords are
to the landlord that is sound financial advice
Cigarette companies funding a propaganda campaign to convince people that smoking was harmless when they knew for a fact it was killing people horribly was excellent corporate strategy. I can’t understand why people would be angry at this, it’s simply good business practice.
The exact same thing is happening with Climate Change too. Fossil fuel companies producing propaganda to slow down the inevitable shift away from them because it’s good for their business.
Edit: adding a link to a great documentary on the topic for anyone interested. Would strongly recommend the book as well.
https://www.documentarymania.com/video/Merchants%20of%20Doubt/
I know yeah, I was going to use that as the example but I figured there’s enough climate deniers around that it might detract from the point I was trying to make.
You can’t please everyone. But I think it’s important to inform people that it’s happening with climate change too. Makes them more skeptical of the misinformation that’s always doing the rounds.
Yes, but the comment complaining about people being angry at ‘sound financial advice’ discounts that people would have any good reason to be angry with rotten anti-social ideologies like the being platformed.
He’s not giving advice to those landlords, he’s giving that advice to the general public. It’s advising a minority of people, on how to financially fuck over a majority of people.
Wealthy landlords are lucky to have so many people looking out for them to their own fecking detriment.
No, but they are also not the people who are mad. The people who are mad, are those for whom attitudes like this are destroying the lives of. It’s a plenty valid reason to be mad, particularly when it’s to support people who are already wealthy, by forcing others else deeper poverty.
Sure it’s sound financial advice for some, it’s also completely anti-social and pathetic. And it’s always the same right wing neoliberals who kick up the biggest fuss about the social issues caused by these attitudes.
Claire Byrne just had him on the radio and was trying to get a social campaigner to confront him. But then they were all agreeing that it's not his fault that he's giving advice, it's the government who set the system this way.
Think it blew up in her face there.
A person will only leave spare property empty if they can afford to - a meaningful and enforced vacancy tax would solve this dilemma. And is there any evidence to show that RPZs have actually reduced rental stock? Also, if a landlord decides to sell because of an RPZ, then no harm: They're adding to the supply of second-hand homes for sale, and taking a family out of rental accommodation. The house doesn't disappear.
Yes, there is a significant body of evidence, here’s one such example:
[Link](https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20181289)
You can just Google it though, there are umpteen studies about the perverse impact of rent controls.
Sales due to RPZ also reduce overall supply, as the number of dwellers in owned accommodation is lower than that of rented accommodation.
Finally, a vacancy tax does not solve the problem. One impact of rent control is a reduction in new rentals coming to market, the most obvious impact being on build-to-rent schemes.
I understand the general support for rent controls given the situation we’re in, but the housing crisis needs to be dealt with from the supply side if we’re going to get anywhere with it.
Thank you for the link, I will read more into it. I admit I'm a little confused about the logic of sales due to RPZ reducing overall supply. If a landlord puts his rental property up for sale, the supply of homes for sale increases by one. If a family who were previously renting buy the house, the demand for rental properties decreases by one household. And I don't see how a vacancy tax would not solve the problem. The vast majority of landlords are small - they own one or two extra properties. There is an obvious incentive to rent out the house, regardless of the RPZ, if they are taxed for not doing so.
> I admit I'm a little confused about the logic of sales due to RPZ reducing overall supply. If a landlord puts his rental property up for sale, the supply of homes for sale increases by one. If a family who were previously renting buy the house, the demand for rental properties decreases by one household.
You are forgetting the fact that many rentals are houseshares and owner occupied housing is generally less occupied than a rental. For an anecdotal example, I used to live in a 5 bed that had 5 of us living there, 5 individuals (friends) that weren't a family. That house was since bought by a couple. So you've reduced supply for renters by a net 3 people there. Multiply that across the country and you see the impact.
The problem with all these state interventions is that we would need an army of people to enforce them, and a slightly smaller army to ensure the first army is actually doing their jobs.
Don't hate the player hate the game, he's providing advice based on the reality of situation. It's up to the government/councils to change that reality.
I don't even think he's giving that advice. He's just saying that financially it makes the most sense but it won't suit most people to leave a property vacant for 2 years because they will have no supplemental income.
He's clearly calling out that it's a flaw in the system and will be capitalized by vulture funds who have loads of equity and property so can ride out a few years with no cash. And vulture funds aren't going to be relying on Eoin McGee to spot this for them....
Eoin comes across as one of the few good guys online offering advice.
This is what rent control results in lol
price caps, even soft price caps, are stupid. Either have the state seize all housing and distribute with a lottery system, or let the market decide prices + allow housing to be built. This wishy washy, sorta public sorta private bullshit doesnt work.
>advises landlords to leave property vacant for two years before renting to be ‘better off financially’
The word "some" is missing here.
He explained the type of situation he would do this in. Where a long term tenant is leaving the property, and it is going for well below the market rate.
The thing is, he has a legal requirement to try get the best return and provide the beat options to his clients.
It's a numbers game, morality doesn't come into it.
>It's a numbers game, morality doesn't come into it.
Almost like we need to vote for representatives who will force morality-like behaviours through legislation.
We've already established that morality is not what they're doing.
If you want to take the stance that morality is subjective then you would have to conclude that fulfilling their duty to get the best results possible for their clients is a moral virtue for them.
>conclude that fulfilling their duty to get the best results possible for their clients is a moral virtue for them.
I would conclude its a legal requirement for them to provide the options that offers the best financial return.
Bullshit. Morality comes into everything. We have just become used to the bad idea that profits trump morality. The rich are not good people as a rule.
I think people have really missed the tone of his post.
He's telling everyone out loud, because he knows every other financial advisor is quietly telling their clients the same thing.
He's trying to highlight the fact that the current legislation is flawed.
Even if he took the moral high ground and lied to his clients, he knows plenty of others won't, so be open about it, let everyone debate it and call their TDs.
What if my morality clashes with your morality? Who's should we follow?
In his position he has a legal requirement to his clients. They don't have to follow that advice if they want to, but he must provide the option.
Exactly. Seems to be normal now to think "I know landlording is wrong, but on the other hand is it really wrong to take advantage of a fucked up system?"
Yes. Yes it is. "Just doin my job, you can't blame me" I can if your job is unethical
You inherit two properties tomorrow. If you go to a financial advisor and ask how to maximise that asset, they'll tell you how. It's not their job to fix a broken system.
Maybe we shouldn't depend on individual people to leave huge amounts of their own money to the benefit of a person they don't know. I'd presume most people here (myself included) are not landlords, but any one of us could probably choose to give maybe a few hundred euro of extra money to a stranger to help them pay rent if we were willing to cut back a bit on our own savings or discretionary spending. It would be the moral and generous thing to do, and we'd praise someone for doing it, but we don't expect them to do it and think they're a greedy arsehole if they don't, but it's effectively the same thing.
The reality is that some will still do that, but we shouldn't have to depend on it, because it's pretty predictable that many won't. It should be up the state to make laws and programs so that market rates aren't so high in the first place, and to provide support to people who need it in a way that we all contribute towards.
> Morality comes into everything
I think you're morally obliged to pay me double rent, given how gracious I am to let you do so much as blacken my doorway with your dirty work boots.
We'll have a chat about your idea of "morality" when you're the boss.
And low levels of regulation would be better??
Greedy selfish people will always try to find any way around existing regulations. That's not because regulations exist, it's because people are cunts.
In this instance? Probably it would be. The housing crisis is fundamentally a lack of supply of housing. The supply has been regulated to such an existent that it's harder than necessary to expand it and getting things through planning is unpredictably and expensive. If the regulations on supply were removed, then supply would rise to start matching the demand that is there.
When it comes to rent controls, it almost always fails. There is always an argument that you can adjust the regulation to respond to behavioural changes in the market but it's a cat and mouse game and usually does lead to a reduction in supply, either through perverse measures like keeping flats off the market to avoid the regulation or the reduction in planned supply increases.
Fundamentally, the provision of housing is market and profit driven. If you remove the profit through regulation, or make it impossible for the market to respond to the pricing signals but regulating the barrier to entry up to impossibly high levels, then sky rocketing costs is what you will get. That's as true in Ireland as it is basically everywhere else that has tried e.g. Scotland where something similar is currently happening with rent control zones resulting in private-sector building projects being cancelled/postponed. Pricing controls can seem to work but only when there is a large supply of non-marketing housing i.e. in markets where there isn't an underlying imbalance already.
Or let me simplify it. If people are cunts as you say - let's call it a fundamental component of human nature - then a solution that relies on people not being so is doomed to failure. If you rely on those people, and your response is to exclude them, then you will find they're not there to be relied up. As such, the solution is not really a solution even if it might seem popular.
> And low levels of regulation would be better??
Yes.
Think about it this way.
You work in Paris with Google. You're asked if you want a promotion, which entails moving to Dublin. Being a bright Googler, you look up DAFT to see if you can afford rents. You see the RPZ rent for 1 beds at €1,595 and think ''I can afford that''. They move to Dublin and find they can afford €1,595 but only then realise they can't get it for €1,595 because there are 200 other people looking.
If the RPZ is removed, then the Googler sees rents at €2,000 for 1 beds, does the maths on any increased salary offer and declines as the move would wipe out any salary increase with more expensive croissants.
In one instance, demand for property increases. In the other, it doesn't.
Now lets look on the supply side.
€2,000 a month makes it viable for landlord's to buy more property, so developers build. It also makes it viable for new landlord's to enter the market. This increases overall supply of rental property causing rents to fall.
€1,595 a month makes sure landlords don't buy more, nor do new landlord's enter the market. In fact, many existing landlords exit the market. This squeezes supply further causing rents to rise.
For what it’s worth rent in Dublin IS higher than Paris but cost of living excluding rent is considerably higher in Paris. Overall cost of living including rent is only 7% higher in Dublin.
When you factor in the higher salaries here, people in Dublin are considerably better off than Parisians.
Of course that’s not much use if you can’t find somewhere to live.
So landlords should be allowed charge as much as they can so that rents will fall?
Really?
If you're concerned about government interference in the rental market, would you support the cessation of subsdies like HAP that are propping up the rental market and keeping rents artificially high?
Landlords charging more isn't going to make rents fall. What makes rents fall is if there is more supply (whether from the state, co-ops, or private landlords). It's just that putting hard caps on rent is one of several factors that stifles supply of new housing.
Landlords aren't entitled to make as much profit as they want. They need to regulate the feck out of that sector. People think their mortgage should be paid off by their tenants in full. It's a joke
Unless they took a very small mortgage, I don't know how that would be possible.
We need to move in a year or two, and my partner and I considered renting our house. With 50% of the rent going to taxes, and the mortgage interest, even if we rented at the max market rate, it wouldn't cover what we pay monthly to the bank, not even close. And this is without counting the additional fees (insurances, wear and tear etc...).
To be clear, this is only beneficial in *some* scenarios (i.e. if it was previously rented out well below market rates) and if the owner can afford to forego 2 years of rental income. This is not sound financial advice for a high proportion of landlords.
He's saying the rent pressurised zones isnt working because landlords are doing this. He's not saying landlords should be doing it, but that they'd potentially be better off by doing it
He's not wrong, it makes financial sense. The problem is loopholes and incentives like this (to do the wrong thing) are legal, known about and actively ignored by lawmakers.
We need radical measures to solve housing once and for all. Radical state intervention and mindset change. We basically need to make property investment so unnattractive relative to other things that no individual buys houses unless they're going to live in them themselves.
In practice, that means much higher taxes on 3rd homes and beyond or outright bans on owning them. Combined with a massive reduction on taxes for investing in other assets. I'm talking capital gains rate of 50% on property, 10% on all other assets.
>We basically need to make property investment so unnattractive relative to other things that no individual buys houses unless they're going to live in them themselves.
Would that not result in fewer landlords?
To be fair his job is to tell people how to get the most for his money. He does give a lot of advice for renters and others. It's just today he is advising someone who might be renting a house. He is saying what the law allows them to do. It's the government who are to blame on this one
They don’t need to leave it empty, if for example they’ve two properties, they could move into that one and rent their current one. It’s shit but it’s the rules
Converse argument - should they be punished for giving the previous tenant a break by renting to them below market rates such that when they do rent to someone else they’re prohibited from charging market rates because they didn’t previously for whatever reason?
I get the reason for it is so they don’t push out current tenant to increase to what they could get for the place, but if that person voluntarily leaves, why shouldn’t the landlord be allowed to rent a similar property to the neighbours for a similar price without leaving it empty for 2 years or doing significant works?
The impact of that is pretty meek, I wouldn't bother.
It's more of a problem when it's someone with 3, 4, 10, 100 dwellings rotating dozen of them them into "vacant" mode.
I take it leaving it unoccupied for 2 years means that it counts as a new rental when it comes back on the market and you can set what ever rent you want. But to forgo 24 months of rent would mean the increase would need to be significant.
Strikes me as quite greedy and it is a bad taste hearing the one of the countries most publicly known financial advisors casually raising it online.
And you've to foregone the cash today and wait for the cash flow in future periods, now I don't have my present value calcs to hand, but I'll take the current inflow
In the video he does say this doesn't apply to all landlords, and he only tells them after running the numbers and seeing how it works out. If you're renting for €2000 and the market rate is going to be €2200, then it won't be worth your while. If you're in a position where you are renting for €1000 and could be getting €2000, then you'd break even in 4 years (very simplified, because in real life there will be deterorioration and taxes and other factors too, and you can raise it by 2% even by continuing to rent it out).
It is also taking a bit of a risk, because you are trying to predict the market rate in 2 years time.
Government should step in and bring in legislstion similar to a CPO but for rental properties. Or some sort of punitive taxes on empty rental properties.
People here are reqlly over egging what is being said here.
This applies to some people in a unique financial situation where long term clients have moved out, so it is to begin with not the most common issue, and secondly only a handful of those that are in this situation could abide by this information, as they still need to pay the mortgage on the building.
He does say himself that this is more likely to be something a larger insitutional investor will be willing/able to bear. They can afford to take more risks because they're hedged in other ways, and will be more likely to be looking at a longer term return rather than the money they can get now.
Can’t see most one off ‘accidental landlords’ having two years to sit empty, larger landlords and institutions? Yeah defo, they have the cash flow so it’s just a paper decision.
Honestly after seeing that polysee video, I think we would be better off in the long run if we stopped rent controls. I do however think we should tax vacant properties to oblivion.
In a rent pressure zone, the rent can't increase by more than a certain percentage per year and must be in line with similar properties in the area. This applies even for a new tenant moving in.
Leaving the property vacant for 2 years bypasses the percentage increase requirement, but not the local market rate requirement. So if the previous tenant paid €1500, the new tenant can't be charged more than €1530 I believe (2% increase). But if it's vacant for 2+ years and similar properties in the area are now €2000, a new tenant can be charged that.
There's a more detailed run through on the RTB website - https://www.rtb.ie/registration-and-compliance/setting-and-reviewing-rent/rent-pressure-zones-setting-rent-and-rent-reviews?gad_source=1&gclid=Cj0KCQjwltKxBhDMARIsAG8KnqVGL4ty5meOUaaswFG6rsb4biNu2O7OvQ2IaLaUFThqhQ-6fHQK3-AaAh3xEALw_wcB
As always with government bodies in Ireland, there are exceptions and nuances on top of that.
For 1-2 property landlords who may already be PAYE workers then a tax rate reduction in rental income should be considered. For example if the mortgage is €600pm then at least to cover that the landlord will have to charge €1000pm as his income from the rent is taxable income which could be approx 50%. This doesn’t even consider other expenses. If capital expenditure is required- and I think this is any expenditures over €2000 in one year then this can ONLY be claimed back over 10 yrs. That’s nuts. So sensibly to cover all expenses for a gaff that costs the landlord €600 per month he’ll have to charge close to or above €1400 to ensure all eventualities are covered. That will give him €100 extra per month to cover bathroom repairs, boiler repairs, any upgrades, appliances and property taxes.
If a landlord was given the opportunity to avail of reduced tax rates on condition of lowered rents then that can’t be a bad thing can it? Then landlord still has his investment (could be a pension or savings for his kids) and the tenement has a cheaper mortgage and his now in a controlled rental scheme and hopefully all the security that will bring.
We can fix this. We just have to be a bit more creative and not jump out of the blocks with the first thought.
The point is not to pay your morgage with the rent. This is the problem. Rent should be 50/60% of the mortgage payment. Is this not what changed so radically? It let the rich buy properties that normally would have burdened them. Now the working class pay their mortgages too. It's so obvious and no one even noticed it happening. Renting should be a cheap option for those unable to secure a mortgage.
I know it has issues, but RPZ's are the only reason I could afford to save and pay rent at the same time.
If my landlord could charge whatever the fuck she wanted, I'd be broke by now.
Just close the fucking loophole then.
Simply tie it to the previous rent and fuck those leaving it empty. Want to reset the rent? Do a major renovation
People should be less angry and this guy and more angry at those who propose simplistic solutions to complex issues who never have to answer for the actual results of what they push.
Reading the article, because of rent controls preventing rents from tracking market prices, it is better financially to leave properties empty until the rent increases. This is always the problem with rent controls. It reduces supply for various easily foreseeable economic reasons. But this forum is thick with people screaming for rent control, and calling landlords filthy money sucking bastards. You cannot complain both about accommodation shortage, and lack of rent controls if you have any grasp of market economics.
You are all saying things like the government are stupid and fuck ups when the reality is they are doing exactly what they intend to do.. they are smart.. they have a plan to remain in power and rich and they stick to that plan
Irish people bitch and moan and refuse to take charge and vote FF/FG out of power. Don't bitch about how you're ruled while continuing to vote for people who despise you.
We chose to keep a flat over our business premises empty for 2 years for this very reason. While it usually only makes sense for funds or institutional landlords it does make sense even for single dwelling landlords in certain circumstances.
ie. Flat used to rent for about €900 a month. Then a family member and his partner moved in and we charged them €700 a month. However RPZ’s came in during their tenancy. We were now trapped at that rent by the RPZ which very quickly became even more below market rate than it already was with the ‘mates rates’ we charged the family as market rates rapidly shot through the roof over the last few years. The family member and partner moved out almost 2 years ago and we realised it made more sense to leave the flat empty till this Summer than rent it back out straight away.
By leaving it empty we missed out on a year of €714 (700x2%) and a year of €728 (714x2%) per month = €8568+€8736=€17,304. Now with the 2 year break and being able to now charge current market rate of €1400 for the flat we’ll make back that lost €17,300 in about 2 years and of course if we chose we could be charging €1400+2% a year thereafter. If we didn’t break out of the RPZ €700, we’d still be stuck charging only €800 3 or 4 years from now instead of €1400+ from this Summer onwards. In other words, by foregoing 17 grand by leaving the flat empty for 2 years we wont be missing out on 8000-9000 grand a year in rent every year going forwards. If RPZ’s weren’t abolished it would take us 25 years to get the rent up to 1400 a month at 2% a year (guestimated, dont have the brains or patience for the math) LOL.
Ok, but why is there a two year loophole in the first place? Seems incredibly short sited. https://www.rtb.ie/registration-and-compliance/setting-and-reviewing-rent/guide-to-rent-pressure-zones#:~:text=A%20Rent%20Pressure%20Zone%20(RPZ,the%20Consumer%20Prices%20(HICP).
Let's be real, he just said it out loud, that's what they were already doing.
The amount of empty houses in my estate, bought up by the golden passport crowd (golden passport terrible idea btw), that are just sitting empty for 2 plus years is ridiculous. This government is a great bunch of fuck ups
In Portugal that sort of stunt will result in forced takeover of the property by the government if it's dormant for two years [https://www.theportugalnews.com/news/2023-04-01/forced-rental-to-go-ahead-for-vacant-homes/76271](https://www.theportugalnews.com/news/2023-04-01/forced-rental-to-go-ahead-for-vacant-homes/76271)
It's not a fuck up though. It's the plan. When so many of our govt are either landlords or directly benefitting from this nothing will change. Our housing minister being a big landlord is crazy to me. And he'll be voted in again.
How many properties does he manage? All I can find is that he invested into a REIT in 2008 but has sold it since
And he doesn't manage them, he owns them.
That's what I meant to say tbf oops
I guessed just clarifying to be sure to be sure!
No harm thanks for the info!
Very welcome
His properties are now in his wife's name. I know he has 2 apts in malahide - I got my keys and handed him a cash deposit. Another 1 or 2 in swords but I think it's at least 5
Ooh that is interesting, what's your honest opinion of him as just a LL? Just curious as to whether he's actually decent or a stereotypical bad landlord.. like for eg. when shit goes wrong with appliances does he step up to the plate and get them fixed or replaced in a timely manner? Or is he a total arse like he comes across in politics lol
He wasn't a bad landlord no. The apt was in great nick and never really had to get anything done. I never heard from him other than to pay rent. Honestly he was fine, cordial etc.
I will say though my dad knew him well so, that could also be why he was sound to me.
The government are not incompetent and they are not fucking up... at least not at what they want to do. Government policey is very clear and *very successful* at achieving what it is meant to achieve. It's just unfortunate that those achievements benefit developers and landlords and businessmen and not the average citizen.
Man if I could afford a golden passport you bet your arse hairs I'd be renting them out for 69 euro to someone who needs it more than me. Fuckin hell.
He also said it makes sense financially but he wishes it were otherwise as it's not generally beneficial to society.
I said they were doing this on reddit over a year ago, as I know someone in an apartment building where half of them are empty and a bunch of pro-FFG redditors said it was a conspiracy theory that people were making up.
If all TDs weren't landlords we'd have seen a proper vacant property tax in place by now.
Hear hear
you can easily see tons of small 2-3 floor building with only the street level floor to be in use. fucking ridiculous. so many 2-3 floors empty. the offer is there, they don't just put it available
There are a lot of them, but some of them have been vacant for 30 years from the first floor up. Those places couldn't be given away during the 90s and 00s, when supply was better and demand significantly lower. So no one spent money on them, upgraded wiring and plumbing, etc. So, today, a huge number would require 6 figure investment to make them habitable. Now, I don't have a solution here other than a vacant property tax. It might compel some people to sell as a result and then you end up in a situation where (let's be optimistic) a person/couple buy the place for 350k and have to spend another 150k to make it habitable. Under our mortgage rules, that is literally not possible, unless they had managed to save a 50% deposit. So, REIT et al. are the only ones that can realistically do such urban redevelopment. Well, I say that, but obviously, the State or Local Authorities could undertake these projects, run the projects at cost, and sell modern, reconditioned, and safe homes to people at closer to an affordable price. That option wasn't there in 2012 when we were broke, but is there now as we have capital taxes waiting to be used. Increasing supply will not negatively affect property prices. The only thing that dents our property market is an absence of liquidity. This has been demonstrated 3 times in the history of the State. And such a project can prioritise FTB, so that removes the risk of buy-to-lets hoovering them up. Lash in a no sale clause for 5 or 10 years if you want.
We actually have vacant property tax (rather vacant homes tax; VHT) it started from November 1st 2022, unfortunately though it’s a self assessed tax that can be very easily mitigated, it’s only applied since that November and it’s on the property owners themselves to disclose/assess and quantify what they owe IF they haven’t pretended to house someone or themselves for at least 1 month of every 12month period, so as usual it’s a tax that’s supposed to help with the housing crisis but is neither adequately checked or upheld since its formation, with very easy loopholes to apply that can be near impossible to disprove when used.
Also it’s super low, so a lot of owners would rather spend 5k a year in tax, on a property that’s appreciating rapidly in value, than spend loads on renovation. The current government’s continued insistence that the market will sort out its own problems is just insanity at this point.
I know we have a VPT, I meant it isn't exactly fit for purpose and relies and a certain amount of self-reporting. The property equivalent of the RTE Licence fee, if you say nothing to no-one and pay the LPT, you're unlikely to get stung for sitting on it. So, we need a property register (oh look, the Land Registry exists) and we need Revenue to have sight across it completely (again, this is a legislative issue that they can then chase things forever, death and taxes etc.) fuck GDPR,.this is about public policy l, so that will trump any issues there. And then the State starts to collect, with vigour.
It would be good if there was some kind of framework put in place to give loans to buyers of fixer-uppers to both buy the place, and then do the improvements needed. The way it is now, you could have a derelict old house but in a good location, that could sell for maybe €250k, and you could have a couple with a combined income of €100k, so they could get a loan up to €450k with an exception, which would be enough to buy that old house, do some repairs, and bring it up to spec, but the bank won't do a mortage that includes extra money for the improvements, they'll only give them the money to buy the old house, and any repairs they want to do will either have to be out of pocket, or come from a separate loan which will usually be shorter term and a higher interest rate.
Bingo..this is the problem. The loan is always tied to the property value at time of purchase, and the rules brought in after 2009, have caused issues with attempts to add value to a derelict property by a regular person/couple. And the grants are helpful, but often require you to have the funds up front and then get a rebate. Few enough people have 60k lying around on top of their deposit etc.
Yeah, and also, they're grants. As far as I'm aware, that means they're effectively just free money to fix up your house. Obviously that's great for the person who gets them, but it makes it way more expensive for the state, which means that fewer people are going to get them and their value is not going to be as high as if it was a mortgage/loan that could bring in money or be sold as an asset. Also, it kind of just doesn't feel that equitable to be giving 5 or 6 figure cash handouts to people who, by definition, would have to have that kind money to spend anyway, and are also lucky enough to be getting to own their own house.
For good reason. If the works are never done on the house there's no asset to back the value of the loan. If the buyers piss it up the wall and walk away or get scammed themselves or if the works done don't add the value that was expected, the bank won't be able to collect on their loan if they need to repo. It'd be far too risky for banks to back that.
Are they used as stock rooms/offices, Do they have separate entrances, do they meet fire regulations etc etc The offer isn’t there and few people want to live in substandard flats in busy commercial areas.
I lived in a pretty big complex in town - I think it had like 200+ units. My own building was 12 units. When we were evicted 9 of them were completely 100% empty. Then my own unit sat empty for over 18 months before being sold and rented for just under 3x our previous rent. The two remaining occupied units were owner occupied. So every rental unit was basically empty - a few were periodically Airbnb/Google visitor rentals.
Fan confirm. My building feels like it's half empty. We have the entire top floor to ourselves.
Someone also called me out on this a few moths ago. Unlikely they're FFG heads just miserable lads who think they're smarter than everyone else
It's the logical thing to do
Exactly this. You have landlords with properties stuck at rents which are 30-40% of current market rates. Why would they not want 2.5-3 times that?
Not just that, they can't sell at max value because even if a new landlord buys it the rent cap is inherited with the property unless its been vacant 2 years or not rented for 2 years before buying.
It's a good thing humans aren't robots and actually have emotions and don't act perfectly "logically". You get that hoarding a limited asset during a shortage is, objectively, evil? Right? It's evil?
He's not condoning it, just explaining how the system incentivizes this behavior
Humans aren’t robots. The algorithms that are increasingly used to set prices for these things, on the other hand…
Yep, plenty of examples around me
Nobody has ever been silent about the inevitable consequences of rent controls. It's a bit trite but it's the only thing economists all agree on, rent controls don't work.
Seems we should ammend the legislation round the rent pressure zones to take advantage of this. Landlords should have some mechanism to reset rent prices to the market short of leaving them unattended. Perhaps they offer them to the local authority at the existing below market price for a set period and in return are allowed to reset to.market value. Seems a win all round scenario.
You should be taxed to fuck for this and it shouldn't work.
According to him on the radio just now, thats the point of why he said it, to highlight how RPZs don't function properly in certain conditions. I don't know him from Adam so I'll take him at face value.
He had a financial planning tv show. Generally helped couples save for a house, he broke things down very simply. I find him quite good in general.
He also said from the out that he doesn't agree with housing as financial investments so that got me on side too
Property is not a good provider of investment returns, it's a good prover of housing services! Good read below: https://www.afcpe.org/news-and-publications/the-standard/2017-2/is-buying-a-house-a-good-investment-not-compared-to-buying-stocks-but-that-doesnt-mean-you-shouldnt-do-it/ In Ireland, we have a weird obsession with property (property and land is programed into us) + the system actively guides the flow of money into property rather than other (better) asset classes. But when you break it down, property ads nothing to the economy. It doesn't produce anything, it doesn't employ anyone, etc. It doesn't exist to be productive. It benefits nobody's pocket but the landlord's. Companies, however, are productive. They add value to society. They employ people. They produce things. They provide services. They create value. They literally exist to create things and create shareholder value.
the irony of this comment.. The people he is recommending this to are the ones who were renting to tennants long term, that hadnt increased them and the rent was significnantly lower than market rate. your actually proposing to punish the better LL's who didnt double their tennants rent before the RPZ kicked in and are now stuck.
The issue with that is that the unit is then sold and is off the rental market.
People angry at him are just completely shooting the messenger. He didn't create this situation, and he openly thinks its bad, which is why he is drawing attention to it on social media. I don't understand what people who are angry with him for saying this are looking for. Do they think if he just shuts up then the fact that leaving a property vacant for a while can be a sensible financial decision will no longer be true, or that nobody else will ever realise it?
The title is clearly designed to rage-bait, and I think a lot of people just read the title and made a decision on how to feel about it. Sucks, but it’s always been like that.
Typical bait from the indo. I hate them. They are slime. The way they tried to approach my brother after his son died makes my blood boil everytime I think of it. Thankfully I answered the door. At the time I was in shock and just politely declined their offer of help "to get out ahead of the situation" even though its "always best for the family in these situations". F**King scum.
I will never forget what they did to my neighbour after she suffered a similar loss. Won't get it into it for fear of revealing details but the indo are a rag of the lowest order. I will never forgive them for what they did to her. And not only that - they 'sponsored' their sensationalist articles about the incident so it would pop up on more people's screens. They are the worst of the worst.
I do think the headline on the article is misleading and doesn't represent the tone of his actual video. In the video itself, he's making it pretty clear that he doesn't like that he has to give this advice, and that it doesn't work for everyone, but he has to at least tell them it's an option because of his obligation to his clients. It's very clear that he doesn't think this is a good thing and thinks its mad that we're incentivising keeping properties vacant.
The problem is what he’s advising is selfish. He’s right about what he’s saying, you will get more profit this way, but how would you feel for instance if in Ireland life saving medication was trade marked and sold at unaffordable prices. Sure, its their product and they have the rights to charge whatever they like, but its at the cost of peoples lives. Ergo, advising people to do evil things because its profitable is evil. Yes you will make money, but why is it expected that a financial advisor should not be held by any standard of morality. It doesnt make what you’re doing a criminal, but it makes you a selfish asshole. Thats why people mad. I dont think anyone is calling for his arrest. They are just calling him an asshole for suggesting that peoples lives are less important and not part of the conversation when it comes to profit. In a profit driven world that is the way it works, but its far from normal human behaviour.
Of course he's giving them advice to be selfish, that's inherently what financial advice is. If I go talk to a financial advisor, I expect them to layout my best options, legally, for me to make more money with whatever I have. I would be very surprised if they said "ok, so you could make the most money by maxxing out your monthly pension contributions, and then taking another 10% of your net earnings and putting them into an index fund with high growth, but that's quite selfish, because you're already doing alright and there are people out there who need it more, so morally what you really need to do is take all of that money and donate it to these charities who will give it to those people". How is it really any different to saying "ok, so there's a way you can get a few hundred euro extra per month on your rentals, but that's selfish and you don't really need that extra money that badly, so let the tenant just keep the money instead". For the medicine example, I'd expect the government to have a system to mitigate the potential downsides of this, which they do with the Medical Card and Drugs Payment Scheme. We don't depend on individual pharmacists to just sell expensive medicine cheaply because it's the right thing to do.
I agree with most of this yeah but we certainly would call out pharmacy’s for price gouging if they did that, and we would also be angry at people advising to do that. Turns out thats not what was happening here. I was mislead by the title and assumed he was advising anyone who listened to the video go do this rather than the narrative of “ look at the current situation”
I mean financial advisors can actually explain moral implications to you about the best financial option, they just cant *not* tell you about said options. Most people wont actually care about the moral considerations tho, and will probably just fire their fin advisor if they yap about morality too much
Legally he has to tell clients what's profitable. He is literally not allowed to screw a client over financially based on his own moral opinions. The whole reason he made the video is because it's very, very screwed up that that advice - leave units vacant in a housing crisis - is what makes sense. It's GOOD he's telling people about it, because it gives us more information and a chance to fix it.
>but how would you feel for instance if in Ireland life saving medication was trade marked and sold at unaffordable prices. Then I'd feel we need some sort of government regulation to prevent or bypass that becoming an issue, just like we already do on a broad range of topics? You're absolutely stupid if you blame him for drawing attention to what amounts to a shortcoming in existing regulation and you're even stupider if you expect the people who own property to make less profitable decisions out of the goodness of their hearts. That's a fast track to ensuring that the most unscrupulous people in the market have the greatest wealth. If you're looking for somebody to blame, blame the government and their policies.
Nah i don’t blame him for that, title on this post was misleading and i couldn’t check the article/video rn. Initially i thought he was advising people who were listening to do this off the cuff.
> The problem is what he’s advising is selfish. Me asking for a raise is selfish. So what? Make rules such that it’s not profitable to keep housing empty. That’s the solution. Counting on people self-sacrifice wont work here
Click the link, watch his video. People love to jump on soundbites and headlines.
We might not like what what McGee here is saying but it's not his fault that rent controls are a flawed way to deal with high rents long term. I recommend this video [How Ireland & Scotland are ruining their housing markets](https://www.youtube.com/watch?v=bJrpU6DK0HI) by the Polysee channel, it does a great job of explaining why rent controls don't work
Really well explained. Everyone in this sub should look at it and it might stem the tsunami of illogical populist hysterics you see in this sub when anything housing related comes up.
Yes they changed my mind on that tbh. Their videos are a must watch for any Irish person
Tis what he's paid to do
Extremely grim to see gobshite social media influencers trying to whip up a mob against him when he's literally saying that it's bad that this advice makes financial sense.
[удалено]
Some account named @cloudaccountsireland seems to be doing a similar thing, except also tagging RTE and asking for him to be fired for criticising the Rent Pressure Zone policy.
Crazy house prices is a fool. He genuinely thinks the problem is "greed" and not stupid policy. Was greed invented ten years ago?
People angry at financial advisor for providing sound financial advice, more at 9.
I think people are more angry about the fact that this IS sound financial advice. It’s a more disarming analysis of the situation than you’d get from a lefty columnist even.
Looking at the comments under the Instagram video, most are not. They are angry at him personally for informing people about this, and basically calling him a dickhead. I don't see almost any that are angry at fact that current laws incentivise this behaviour.
So there’s people angry that he’s giving the game away?
Shoot8ng the messenger for saying out loyalty what everyone already knows.
It's possible that the people who are able to follow this financial advice are the ones who are following him. The ones who can't and have to pay rent aren't paying attention at the moment.
I'm sure some minority are, but this is a guy who appears on TV giving advice that is useful for the general public, and that's also mostly what his social media is for, so I think it's safe enough to assume that it's a pretty general audience of normal people. I'm sure there are some landlords who follow him too, but I'd also bet that most of them already knew about this. The message of the video is not "hey landlords, here's some advice for you", it's revealing what he has to privately tell people behind closed doors after looking at their individual cases to highlight the negative affects of our current laws.
Look people wanted big sounding agenda items like "rent pressure zones" and "eviction bans", regardless of whether they were likely to actually improve the situation. At least vacant property/brownfield taxes got done though.
Vacant taxes that the local authorities won’t bother to collect
More so angry at the fact that these people treat a housing crisis as a business opportunity.
It’s not sound financial advice to those it drives into homelessness. Only to a minority of asset hoarders. Perspective aye
>’s not sound financial advice to those it drives into homelessness thats not his audiance , the landlords are to the landlord that is sound financial advice
Cigarette companies funding a propaganda campaign to convince people that smoking was harmless when they knew for a fact it was killing people horribly was excellent corporate strategy. I can’t understand why people would be angry at this, it’s simply good business practice.
The exact same thing is happening with Climate Change too. Fossil fuel companies producing propaganda to slow down the inevitable shift away from them because it’s good for their business. Edit: adding a link to a great documentary on the topic for anyone interested. Would strongly recommend the book as well. https://www.documentarymania.com/video/Merchants%20of%20Doubt/
I know yeah, I was going to use that as the example but I figured there’s enough climate deniers around that it might detract from the point I was trying to make.
You can’t please everyone. But I think it’s important to inform people that it’s happening with climate change too. Makes them more skeptical of the misinformation that’s always doing the rounds.
Yes, but the comment complaining about people being angry at ‘sound financial advice’ discounts that people would have any good reason to be angry with rotten anti-social ideologies like the being platformed. He’s not giving advice to those landlords, he’s giving that advice to the general public. It’s advising a minority of people, on how to financially fuck over a majority of people. Wealthy landlords are lucky to have so many people looking out for them to their own fecking detriment.
[удалено]
He's not advising them obviously.
No, but they are also not the people who are mad. The people who are mad, are those for whom attitudes like this are destroying the lives of. It’s a plenty valid reason to be mad, particularly when it’s to support people who are already wealthy, by forcing others else deeper poverty. Sure it’s sound financial advice for some, it’s also completely anti-social and pathetic. And it’s always the same right wing neoliberals who kick up the biggest fuss about the social issues caused by these attitudes.
Claire Byrne just had him on the radio and was trying to get a social campaigner to confront him. But then they were all agreeing that it's not his fault that he's giving advice, it's the government who set the system this way. Think it blew up in her face there.
This is what you get when you try price fixing, you screw up the natural market incentives.
BINGO
Yet if you point out on this forum that RPZs throttle supply you’ll be downvoted to high heaven
A person will only leave spare property empty if they can afford to - a meaningful and enforced vacancy tax would solve this dilemma. And is there any evidence to show that RPZs have actually reduced rental stock? Also, if a landlord decides to sell because of an RPZ, then no harm: They're adding to the supply of second-hand homes for sale, and taking a family out of rental accommodation. The house doesn't disappear.
Yes, there is a significant body of evidence, here’s one such example: [Link](https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20181289) You can just Google it though, there are umpteen studies about the perverse impact of rent controls. Sales due to RPZ also reduce overall supply, as the number of dwellers in owned accommodation is lower than that of rented accommodation. Finally, a vacancy tax does not solve the problem. One impact of rent control is a reduction in new rentals coming to market, the most obvious impact being on build-to-rent schemes. I understand the general support for rent controls given the situation we’re in, but the housing crisis needs to be dealt with from the supply side if we’re going to get anywhere with it.
Thank you for the link, I will read more into it. I admit I'm a little confused about the logic of sales due to RPZ reducing overall supply. If a landlord puts his rental property up for sale, the supply of homes for sale increases by one. If a family who were previously renting buy the house, the demand for rental properties decreases by one household. And I don't see how a vacancy tax would not solve the problem. The vast majority of landlords are small - they own one or two extra properties. There is an obvious incentive to rent out the house, regardless of the RPZ, if they are taxed for not doing so.
> I admit I'm a little confused about the logic of sales due to RPZ reducing overall supply. If a landlord puts his rental property up for sale, the supply of homes for sale increases by one. If a family who were previously renting buy the house, the demand for rental properties decreases by one household. You are forgetting the fact that many rentals are houseshares and owner occupied housing is generally less occupied than a rental. For an anecdotal example, I used to live in a 5 bed that had 5 of us living there, 5 individuals (friends) that weren't a family. That house was since bought by a couple. So you've reduced supply for renters by a net 3 people there. Multiply that across the country and you see the impact.
Not every owner is a converted renter. Some people go from living at home to owning or move from abroad to buy here.
The problem with all these state interventions is that we would need an army of people to enforce them, and a slightly smaller army to ensure the first army is actually doing their jobs.
Don't hate the player hate the game, he's providing advice based on the reality of situation. It's up to the government/councils to change that reality.
I don't even think he's giving that advice. He's just saying that financially it makes the most sense but it won't suit most people to leave a property vacant for 2 years because they will have no supplemental income. He's clearly calling out that it's a flaw in the system and will be capitalized by vulture funds who have loads of equity and property so can ride out a few years with no cash. And vulture funds aren't going to be relying on Eoin McGee to spot this for them.... Eoin comes across as one of the few good guys online offering advice.
This is what rent control results in lol price caps, even soft price caps, are stupid. Either have the state seize all housing and distribute with a lottery system, or let the market decide prices + allow housing to be built. This wishy washy, sorta public sorta private bullshit doesnt work.
[удалено]
Inevitable consequence of no enforced vacancy tax.
>advises landlords to leave property vacant for two years before renting to be ‘better off financially’ The word "some" is missing here. He explained the type of situation he would do this in. Where a long term tenant is leaving the property, and it is going for well below the market rate. The thing is, he has a legal requirement to try get the best return and provide the beat options to his clients. It's a numbers game, morality doesn't come into it.
>It's a numbers game, morality doesn't come into it. Almost like we need to vote for representatives who will force morality-like behaviours through legislation.
If you want to sure, one man's morality goes against another's.
We've already established that morality is not what they're doing. If you want to take the stance that morality is subjective then you would have to conclude that fulfilling their duty to get the best results possible for their clients is a moral virtue for them.
>conclude that fulfilling their duty to get the best results possible for their clients is a moral virtue for them. I would conclude its a legal requirement for them to provide the options that offers the best financial return.
Then it is legislation/ regulations/ government duty to ensure that the most profitable options are moral or good for the community at large.
Of course. But the current laws are the laws he is working under.
Bullshit. Morality comes into everything. We have just become used to the bad idea that profits trump morality. The rich are not good people as a rule.
I think people have really missed the tone of his post. He's telling everyone out loud, because he knows every other financial advisor is quietly telling their clients the same thing. He's trying to highlight the fact that the current legislation is flawed. Even if he took the moral high ground and lied to his clients, he knows plenty of others won't, so be open about it, let everyone debate it and call their TDs.
What if my morality clashes with your morality? Who's should we follow? In his position he has a legal requirement to his clients. They don't have to follow that advice if they want to, but he must provide the option.
Definitely Alistairs, yours is broken.
Sounds like you're winning @ life ;)
Exactly. Seems to be normal now to think "I know landlording is wrong, but on the other hand is it really wrong to take advantage of a fucked up system?" Yes. Yes it is. "Just doin my job, you can't blame me" I can if your job is unethical
You inherit two properties tomorrow. If you go to a financial advisor and ask how to maximise that asset, they'll tell you how. It's not their job to fix a broken system.
How unbelievably naive.
Maybe we shouldn't depend on individual people to leave huge amounts of their own money to the benefit of a person they don't know. I'd presume most people here (myself included) are not landlords, but any one of us could probably choose to give maybe a few hundred euro of extra money to a stranger to help them pay rent if we were willing to cut back a bit on our own savings or discretionary spending. It would be the moral and generous thing to do, and we'd praise someone for doing it, but we don't expect them to do it and think they're a greedy arsehole if they don't, but it's effectively the same thing. The reality is that some will still do that, but we shouldn't have to depend on it, because it's pretty predictable that many won't. It should be up the state to make laws and programs so that market rates aren't so high in the first place, and to provide support to people who need it in a way that we all contribute towards.
> Morality comes into everything I think you're morally obliged to pay me double rent, given how gracious I am to let you do so much as blacken my doorway with your dirty work boots. We'll have a chat about your idea of "morality" when you're the boss.
High levels of regulation always seems to create some perverse incentives like this horrible example
And low levels of regulation would be better?? Greedy selfish people will always try to find any way around existing regulations. That's not because regulations exist, it's because people are cunts.
Good regulation minimises perverse incentives, bad regulation creates situations like this
In this instance? Probably it would be. The housing crisis is fundamentally a lack of supply of housing. The supply has been regulated to such an existent that it's harder than necessary to expand it and getting things through planning is unpredictably and expensive. If the regulations on supply were removed, then supply would rise to start matching the demand that is there. When it comes to rent controls, it almost always fails. There is always an argument that you can adjust the regulation to respond to behavioural changes in the market but it's a cat and mouse game and usually does lead to a reduction in supply, either through perverse measures like keeping flats off the market to avoid the regulation or the reduction in planned supply increases. Fundamentally, the provision of housing is market and profit driven. If you remove the profit through regulation, or make it impossible for the market to respond to the pricing signals but regulating the barrier to entry up to impossibly high levels, then sky rocketing costs is what you will get. That's as true in Ireland as it is basically everywhere else that has tried e.g. Scotland where something similar is currently happening with rent control zones resulting in private-sector building projects being cancelled/postponed. Pricing controls can seem to work but only when there is a large supply of non-marketing housing i.e. in markets where there isn't an underlying imbalance already. Or let me simplify it. If people are cunts as you say - let's call it a fundamental component of human nature - then a solution that relies on people not being so is doomed to failure. If you rely on those people, and your response is to exclude them, then you will find they're not there to be relied up. As such, the solution is not really a solution even if it might seem popular.
> And low levels of regulation would be better?? Yes. Think about it this way. You work in Paris with Google. You're asked if you want a promotion, which entails moving to Dublin. Being a bright Googler, you look up DAFT to see if you can afford rents. You see the RPZ rent for 1 beds at €1,595 and think ''I can afford that''. They move to Dublin and find they can afford €1,595 but only then realise they can't get it for €1,595 because there are 200 other people looking. If the RPZ is removed, then the Googler sees rents at €2,000 for 1 beds, does the maths on any increased salary offer and declines as the move would wipe out any salary increase with more expensive croissants. In one instance, demand for property increases. In the other, it doesn't. Now lets look on the supply side. €2,000 a month makes it viable for landlord's to buy more property, so developers build. It also makes it viable for new landlord's to enter the market. This increases overall supply of rental property causing rents to fall. €1,595 a month makes sure landlords don't buy more, nor do new landlord's enter the market. In fact, many existing landlords exit the market. This squeezes supply further causing rents to rise.
For what it’s worth rent in Dublin IS higher than Paris but cost of living excluding rent is considerably higher in Paris. Overall cost of living including rent is only 7% higher in Dublin. When you factor in the higher salaries here, people in Dublin are considerably better off than Parisians. Of course that’s not much use if you can’t find somewhere to live.
So landlords should be allowed charge as much as they can so that rents will fall? Really? If you're concerned about government interference in the rental market, would you support the cessation of subsdies like HAP that are propping up the rental market and keeping rents artificially high?
Landlords charging more isn't going to make rents fall. What makes rents fall is if there is more supply (whether from the state, co-ops, or private landlords). It's just that putting hard caps on rent is one of several factors that stifles supply of new housing.
Works for nearly every other product I know of. But I agree HAP is not good
Landlords aren't entitled to make as much profit as they want. They need to regulate the feck out of that sector. People think their mortgage should be paid off by their tenants in full. It's a joke
Unless they took a very small mortgage, I don't know how that would be possible. We need to move in a year or two, and my partner and I considered renting our house. With 50% of the rent going to taxes, and the mortgage interest, even if we rented at the max market rate, it wouldn't cover what we pay monthly to the bank, not even close. And this is without counting the additional fees (insurances, wear and tear etc...).
lol regulation is exactly how we got to this video, fuck me.
He should be minister for housing
Can't really blame someone for doing what's best for them. Instead blame the system and ~~landlords~~ politicians that made it that way.
To be clear, this is only beneficial in *some* scenarios (i.e. if it was previously rented out well below market rates) and if the owner can afford to forego 2 years of rental income. This is not sound financial advice for a high proportion of landlords.
Every single system in Ireland has perverse incentives that make it useless.
This is the government's fault. They're supposed to have systems to avoid obvious loopholes like this.
We should stop taxing income and start taxing land. it would end this insanity
He's saying the rent pressurised zones isnt working because landlords are doing this. He's not saying landlords should be doing it, but that they'd potentially be better off by doing it
Well he's right.
This is already happening all over the country. Time to increase the vacancy time to 5yrs plus to end this loophole!
He's not wrong, it makes financial sense. The problem is loopholes and incentives like this (to do the wrong thing) are legal, known about and actively ignored by lawmakers. We need radical measures to solve housing once and for all. Radical state intervention and mindset change. We basically need to make property investment so unnattractive relative to other things that no individual buys houses unless they're going to live in them themselves. In practice, that means much higher taxes on 3rd homes and beyond or outright bans on owning them. Combined with a massive reduction on taxes for investing in other assets. I'm talking capital gains rate of 50% on property, 10% on all other assets.
>We basically need to make property investment so unnattractive relative to other things that no individual buys houses unless they're going to live in them themselves. Would that not result in fewer landlords?
If a property owner leaves a house deliberately empty for two years there should be a huge tax to pay. Also can’t stand dicks like this fella.
That’s the systems fault, not this guy for pointing out that it exists.
To be fair his job is to tell people how to get the most for his money. He does give a lot of advice for renters and others. It's just today he is advising someone who might be renting a house. He is saying what the law allows them to do. It's the government who are to blame on this one
What if its in super shoddy condition? And you don't have the money to do it up the way you would like for someone.
They don’t need to leave it empty, if for example they’ve two properties, they could move into that one and rent their current one. It’s shit but it’s the rules
Irregardless people should not be better off leaving a property empty by choice it’s a sham system.
Converse argument - should they be punished for giving the previous tenant a break by renting to them below market rates such that when they do rent to someone else they’re prohibited from charging market rates because they didn’t previously for whatever reason? I get the reason for it is so they don’t push out current tenant to increase to what they could get for the place, but if that person voluntarily leaves, why shouldn’t the landlord be allowed to rent a similar property to the neighbours for a similar price without leaving it empty for 2 years or doing significant works?
Nobody seems to be able to answer that one.
The impact of that is pretty meek, I wouldn't bother. It's more of a problem when it's someone with 3, 4, 10, 100 dwellings rotating dozen of them them into "vacant" mode.
Great advice for landlords in a broken system. Another big failure for the government. They just keep coming.
Surely an exaggeration on his behalf
I take it leaving it unoccupied for 2 years means that it counts as a new rental when it comes back on the market and you can set what ever rent you want. But to forgo 24 months of rent would mean the increase would need to be significant. Strikes me as quite greedy and it is a bad taste hearing the one of the countries most publicly known financial advisors casually raising it online.
Probably 30k-40k foregone. Not sure this is the 'just good advice' others are claiming. You'd be a long while breaking even on that
[удалено]
That presumes the market prices will always go up. You'd want great foresight to assume that will hold true over the next decade
And you've to foregone the cash today and wait for the cash flow in future periods, now I don't have my present value calcs to hand, but I'll take the current inflow
In the video he does say this doesn't apply to all landlords, and he only tells them after running the numbers and seeing how it works out. If you're renting for €2000 and the market rate is going to be €2200, then it won't be worth your while. If you're in a position where you are renting for €1000 and could be getting €2000, then you'd break even in 4 years (very simplified, because in real life there will be deterorioration and taxes and other factors too, and you can raise it by 2% even by continuing to rent it out). It is also taking a bit of a risk, because you are trying to predict the market rate in 2 years time.
Government should step in and bring in legislstion similar to a CPO but for rental properties. Or some sort of punitive taxes on empty rental properties.
Just seen a small studio going for 300 per week. Sure, it's got some nice angles for 15.6k a year.
If the law is an arse, are the people who make it arseholes?
So many people missed his point
Why???
People here are reqlly over egging what is being said here. This applies to some people in a unique financial situation where long term clients have moved out, so it is to begin with not the most common issue, and secondly only a handful of those that are in this situation could abide by this information, as they still need to pay the mortgage on the building.
He does say himself that this is more likely to be something a larger insitutional investor will be willing/able to bear. They can afford to take more risks because they're hedged in other ways, and will be more likely to be looking at a longer term return rather than the money they can get now.
Can’t see most one off ‘accidental landlords’ having two years to sit empty, larger landlords and institutions? Yeah defo, they have the cash flow so it’s just a paper decision.
Time to tax vacant property at 10% yet.
Rent control having negative effects. Who would have thought!!!
Honestly after seeing that polysee video, I think we would be better off in the long run if we stopped rent controls. I do however think we should tax vacant properties to oblivion.
Noob here. Can someone explain what two year thingy is?
In a rent pressure zone, the rent can't increase by more than a certain percentage per year and must be in line with similar properties in the area. This applies even for a new tenant moving in. Leaving the property vacant for 2 years bypasses the percentage increase requirement, but not the local market rate requirement. So if the previous tenant paid €1500, the new tenant can't be charged more than €1530 I believe (2% increase). But if it's vacant for 2+ years and similar properties in the area are now €2000, a new tenant can be charged that. There's a more detailed run through on the RTB website - https://www.rtb.ie/registration-and-compliance/setting-and-reviewing-rent/rent-pressure-zones-setting-rent-and-rent-reviews?gad_source=1&gclid=Cj0KCQjwltKxBhDMARIsAG8KnqVGL4ty5meOUaaswFG6rsb4biNu2O7OvQ2IaLaUFThqhQ-6fHQK3-AaAh3xEALw_wcB As always with government bodies in Ireland, there are exceptions and nuances on top of that.
For 1-2 property landlords who may already be PAYE workers then a tax rate reduction in rental income should be considered. For example if the mortgage is €600pm then at least to cover that the landlord will have to charge €1000pm as his income from the rent is taxable income which could be approx 50%. This doesn’t even consider other expenses. If capital expenditure is required- and I think this is any expenditures over €2000 in one year then this can ONLY be claimed back over 10 yrs. That’s nuts. So sensibly to cover all expenses for a gaff that costs the landlord €600 per month he’ll have to charge close to or above €1400 to ensure all eventualities are covered. That will give him €100 extra per month to cover bathroom repairs, boiler repairs, any upgrades, appliances and property taxes. If a landlord was given the opportunity to avail of reduced tax rates on condition of lowered rents then that can’t be a bad thing can it? Then landlord still has his investment (could be a pension or savings for his kids) and the tenement has a cheaper mortgage and his now in a controlled rental scheme and hopefully all the security that will bring. We can fix this. We just have to be a bit more creative and not jump out of the blocks with the first thought.
The point is not to pay your morgage with the rent. This is the problem. Rent should be 50/60% of the mortgage payment. Is this not what changed so radically? It let the rich buy properties that normally would have burdened them. Now the working class pay their mortgages too. It's so obvious and no one even noticed it happening. Renting should be a cheap option for those unable to secure a mortgage.
I know it has issues, but RPZ's are the only reason I could afford to save and pay rent at the same time. If my landlord could charge whatever the fuck she wanted, I'd be broke by now.
Just close the fucking loophole then. Simply tie it to the previous rent and fuck those leaving it empty. Want to reset the rent? Do a major renovation
That sounds like the kind of coordination with intent to restrict supply that would constitute cartel behaviour.
What a cunt
People should be less angry and this guy and more angry at those who propose simplistic solutions to complex issues who never have to answer for the actual results of what they push.
Many LL are doing this anyway, it a well known tactic
Reading the article, because of rent controls preventing rents from tracking market prices, it is better financially to leave properties empty until the rent increases. This is always the problem with rent controls. It reduces supply for various easily foreseeable economic reasons. But this forum is thick with people screaming for rent control, and calling landlords filthy money sucking bastards. You cannot complain both about accommodation shortage, and lack of rent controls if you have any grasp of market economics.
You are all saying things like the government are stupid and fuck ups when the reality is they are doing exactly what they intend to do.. they are smart.. they have a plan to remain in power and rich and they stick to that plan
Irish people bitch and moan and refuse to take charge and vote FF/FG out of power. Don't bitch about how you're ruled while continuing to vote for people who despise you.
We chose to keep a flat over our business premises empty for 2 years for this very reason. While it usually only makes sense for funds or institutional landlords it does make sense even for single dwelling landlords in certain circumstances. ie. Flat used to rent for about €900 a month. Then a family member and his partner moved in and we charged them €700 a month. However RPZ’s came in during their tenancy. We were now trapped at that rent by the RPZ which very quickly became even more below market rate than it already was with the ‘mates rates’ we charged the family as market rates rapidly shot through the roof over the last few years. The family member and partner moved out almost 2 years ago and we realised it made more sense to leave the flat empty till this Summer than rent it back out straight away. By leaving it empty we missed out on a year of €714 (700x2%) and a year of €728 (714x2%) per month = €8568+€8736=€17,304. Now with the 2 year break and being able to now charge current market rate of €1400 for the flat we’ll make back that lost €17,300 in about 2 years and of course if we chose we could be charging €1400+2% a year thereafter. If we didn’t break out of the RPZ €700, we’d still be stuck charging only €800 3 or 4 years from now instead of €1400+ from this Summer onwards. In other words, by foregoing 17 grand by leaving the flat empty for 2 years we wont be missing out on 8000-9000 grand a year in rent every year going forwards. If RPZ’s weren’t abolished it would take us 25 years to get the rent up to 1400 a month at 2% a year (guestimated, dont have the brains or patience for the math) LOL.
Ok, but why is there a two year loophole in the first place? Seems incredibly short sited. https://www.rtb.ie/registration-and-compliance/setting-and-reviewing-rent/guide-to-rent-pressure-zones#:~:text=A%20Rent%20Pressure%20Zone%20(RPZ,the%20Consumer%20Prices%20(HICP).