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  • irishtimes.com - Posted: January 19, 2012 @ 10:29 am

    Well boo-hoo – landlords in trouble get very little sympathy

    Edel Morgan

    Not all landlords in trouble greedily accumulated property during the boom

    “Well boo-hoo!” was the response of a colleague recently to the news that landlords are having a hard time of it lately. It seems that there is every sympathy  for the person who falls into difficulty with the repayments on their family home but very little for those who can’t service a mortgage on an investment property. But  is that entirely fair?

    Not every landlord  has a bulging portfolio of property they  accumulated during the boom. Not every landlord is a mean-minded grasping Rigsby-style character that would charge tenants through the nose to live in a garden shed, if they could get away with it. In fact the figures suggest that most Irish investors  are not career landlords, they are small-time investors who  accumulated  an extra  property or three through a combination of circumstances and easy credit.

    There are quite a few landlords out there who acquired their status when they traded up and decided not to sell their first property. By renting it out, they reckoned the mortgage would be taken care of and the property could be a nest egg for them when they retire or a place they could eventually pass on to their kids. With the first property ticking over some may have taken a punt on a second investment property, thinking they were doing the right thing for their future. Nothing overly ambitious – not exactly hoovering up every available property – but boy are some of them regretting it now. Because if you fall into financial difficulty with an investment property that isn’t paying its way, it is a dreadful drain on resources.  For those who are struggling to make ends meet and pay the mortgage on their family home, the problem is magnified if you also have an investment property to subsidise.

    And if you bought it after 2002- 2003  with a  mortgage (ie you weren’t a cash buyer) it  is  likely to now be in some degree of negative equity so selling may not be an option. If you got a top-up loan to refurbish the place the chances are your rent mightn’t be covering the mortgage and if you have a social welfare tenant  you are likely to be  under pressure to reduce your rent. Add to that the household tax, NPPR charge, PRTB registration fees and  service charges.

    A friend of mine owes €900 this year between the NPPR, household tax on her own house and  on  her investment property and a  €300 service charge on her investment property.  She held on to her first house in west Dublin when she got married , a modest three-bed, and let it out to a social welfare tenant. Now eight years and several children later the rental property is in negative equity, her husband is unemployed and she is supporting the family on a much-reduced wage. She has no idea how she is going to pay the charges on the rental property and is considering finding herself a second  job at the weekend to keep  everthing afloat. Meanwhile her social welfare tenant (because that is predominantly the market in the area  where she owns the house) is asking her to reduce the rent. As it is, the rent is €200 shy of the montly mortgage repayment because she has already reduced it  several times over the past 24 months to stay in line with local rents. Then there’s income tax payable on the property,  a hefty enough sum,  even though she’s not making a profit.

    “Well boo-hoo,” you might say. Buying any property is a risk and she should never have held on to her first property  if she can’t take the heat. But couldn’t the same be said of anyone who buys a property, even as a family home? Isn’t it always a risk? How many of us really knew how things were going to turn out? And wouldn’t more of us have invested during the boom if we’d had the opportunity?

    • PADDY B says:

      i FIND IT ABSOLUTELY AMAZING THAT SO MANY PEOPLE AGREE WITH THE “BOO HOO” COMMENT. I FIND IT VERY DEPRESSING THAT THE IRISH PEOPLE STILL HAVE NOT COPPED ON TO THE BIGGER PICTURE I.E. WE ARE BEING MADE TO PAY FOR GAMBLING LOSSES THAT SHOULD HAVE BEEN PAID BY THE ENTITIES RESPONSIBLE I.E. GERMAN & FRENCH BANKS.THEY WERE ALLOWED TO FLOOD IRELAND WITH BUCKETS OF CASH FOR PROFIT AND WERE NOT REIGNED IN BY THE ECB. THE ECB THEN BULLY OUR WEAK/UNDER QUALIFIED/COULDN’T CARE LESS POLITIICIANS/CIVIL SERVANTS TO COVER/SOCIALISE THOSE PRIVATE DEBTS.THE PRO-BOO-HOOISTS NEED TO TAKE OFF THEIR BLINKERS AND GET DOWN OFF THEIR HIGH HORSES AND FOCUS ON WHO THE REAL ENEMY IS HERE I.E.OUR PATHETIC POLITICAL CLASS,TRADE UNIONS/CROKE PARK AGREEMENT AND THE THE TROIKA.THESE ARE THE PEOPLE WHO WILL FORCE YOUR CHILDREN TO EMIGRATE AND NOT THE LANDLORDS WHO AT LEAST CREATED SOME EMPLOYMENT AND GENERATED TAX INCOME AND PROVIDED SHELTER FOR PEOPLE ALBEIT AT A COST.THESE ARE THE SAME PEOPLE WHO WILL CHIP AWAY AT YOUR STANDARD OF LIVING OVER THE NEXT 10 YEARS.

      I CAN’T HELP THINKING THAT THERE IS AN ELEMENT OF “THANK GOD THERE WAS A PROPERTY CRASH BECAUSE I THOUGHT I HAD MISSED THE BOAT” AMONG THE PRO BOO-HOO-ISTS.TAKE A STEP BACK AND WAKE UP TO WHO THE REAL ENEMY IS FOR YOUR OWN SAKE.

    • Catherine C says:

      I’m a Landlord by default, from an inheritance, and I bought my own first home at the peak of the market ( I am now unemployed with a massive amount of debt and no prospects of paying it back anytime soon!), I would like to point out that no one here appears to be looking at the realistic side of this.
      Landlords need some slack, we need landlords,
      There are many people who need rental accommodation for various reasons at various stages in their lives; ie students, temporary work, first homes whilst saving etc. With out a proportionate number of rental properties rents will rise and then push people into buying, and then realising a high demand and low supply, we run the risk of yet an other boom and bust cycle.

      If Landlords don’t some reprieve soon, many may just hand the keys back and walk away! this has the potential to cause even greater levels of poverty to those already struggling tenants, many who also have the luxury of not paying for services, or the upkeep of the property as it is! Its simply not feasible to continue to penalise the landlord.. for the sake of the entire country!


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