‘The house was a mess, and the bill came to €9,000. It broke me’: Life as a small landlord

“More and more landlords have decided that it’s easier to sell their property than to continue to rent it,” Tánaiste Leo Varadkar said last week. We asked Irish Times readers to tell us about their experiences of being small landlords. Here’s a selection of the responses

‘We can’t keep subsidising ownership in a market where we have no rights’

Aisling Flynn, Co Dublin

I am the landlord on a house in Drimnagh, in Dublin. As a landlord you have no rights. The Residential Tenancies Board is there solely to defend tenants. We had a tenant absolutely trash the house; we got the deposit back, but the damage extended to more than €10,000, and we couldn’t claim tax relief on the repair work. The tax rate means it costs me a fortune to keep the house. Now that it is back close to the values we paid, we most likely will sell. We have really lovely tenants at the moment, but we can’t keep subsidising ownership in a market where we have no rights.

‘I’m a benign landlord who is tired of the Government assuming I am trying to screw my tenant’

Dave Sheehan, Co Dublin

I’m not an accidental landlord. I’m a benign landlord, with two properties, who is tired of every Government action that automatically assumes I am trying to screw my tenant. I have always been reasonable and fixed stuff ASAP after being notified. Ask any of my tenants. I’m annoyed that corporate landlords get loads more tax deductions than I do — it’s simply unfair. I’m horrified at potentially unconstitutional suggestions that my ability to sell my property will be limited if I have a tenant in situ. I could go on ...

‘We had callouts from tenants at all hours for ridiculous things, such as a blown light bulb’

Danny Leeson, Co Galway

We’re owners of a two-bedroom apartment. We had some horrendous experiences in the past, with people not paying rent or wrecking the property, and us having to clean up afterwards or deal with antisocial behaviour and subsequent complaints from neighbours, etc. During the recession it was extremely difficult to let and impossible to sell, and we were hounded by the bank. Thankfully, we eventually paid off our arrears, but it was a hard slog. Property owners have few rights and all the responsibilities. Now we only let for a maximum of six months and use it for house exchanges (and as a result have met some lovely people from other countries). We would rather leave it vacant for some time than have to deal with unsuitable tenants.

[ Renters on the rack: Pressed tenants lift the lid on stress and greed ]

[ David McWilliams: Property is driving a dangerous wedge between those who own homes and those who rent ]

Many people believe that owning a rental property is very lucrative. We put aside 60 per cent of the rent to pay for tax, PRSI, accountants’ fees, RTB registration, repairs and advertising, etc, not to mention the exorbitant €1,500 annual fee charged by the property-management company. The balance goes toward the mortgage, which we top up every month. Before we switched to six-month lets we had callouts from tenants at all hours for ridiculous things, such as a blown bulb at 11pm, a “floater” in the toilet at 7am, the toaster smoking as a result of being stuffed with a thick slice of bread at 8am, a cracked full-length mirror at 10pm — and we never not returned deposits, not because it wasn’t warranted but simply because usually when there was a problem we were so glad to see the back of those tenants we’d happily suffer the loss.

The rent caps and pressure zones, exorbitant tax and regulations, and protection of bad tenants are forcing owners out while the big vulture funds contribute nothing to the economy in tax. It’s a mess and there seems to be no end to it.

‘I had a tenant refuse to pay rent for 15 months’

Shane McGee, Co Dublin

I’m a small landlord over 20 years. Last year I had a tenant refuse to pay rent for 15 months, citing the Residential Tenancies Board’s instructions, as posted out to all rental properties, to cease paying during Covid. He refused to engage, eventually leaving with rent outstanding. Normal enough, really. I could write a book.

‘What’s the point? It’s more trouble than it’s worth’

Denis Murphy, Co Cork

I worked hard and built this house with my own hands — I’m a carpenter. I have been renting it out for a number of years, and have had all sorts of trouble, from the rent always coming up short to neighbours complaining about noise and parties. The RTB is tenant-oriented — and now it has another law where I must register annually. It’s another tax to pay their wages. The tenant pays nothing, because the landlord is a softer touch. I have to pay an accountant each year to do my tax, which is 52 per cent of profit plus a preliminary tax for next year. So what’s the point? It’s more trouble than it’s worth. People my age, in their mid-60s, have the mortgage paid. This was supposed to be a retirement pension. Instead it’s a retirement black hole.

‘Tenants have requested replacements for items they have broken, which is really difficult to justify’

Nicola Fitzpatrick, Co Galway

I have rented out a three-bed semidetached home through a property company for the past nine years. As a private landlord the biggest issue is the Residential Tenancies Board, which provides zero value for the fees it requires landlords to pay. Landlords have no rights: everything is set up around the tenant. As a landlord I have been able to rent slightly below market value, and I invest in the property annually to maintain its condition. I am fortunate to be in that position. I have experienced tenants request replacements for items they have broken, which is really difficult to justify. In general my experience has been good, but with a monthly management fee of 11 per cent, in addition to taxes, maintenance, unplanned expenditure and having no rights, I can see why private landlords are exiting. The media only advertises the tenants’ story. The full picture is never shared.

[ Rent trap: A generation stuck in a vicious circle ]

[ Taxing empty homes a political sideshow that will not fix housing crisis ]

‘The payments I receive are not meeting the mortgage payments’

Francis Donoher, Co Laois

I am an accidental landlord of four years. We left our family home to look after my mother full time in her home. The biggest challenge for us is the 51 per cent tax. The payments I receive are not meeting the mortgage payments, and I personally wouldn’t charge beyond what people could afford. My mortgage is €600 a month; the going rate for rent in the town is €1,200, but I only charge a very modest €850, which with tax is €425 net. I put in €175 myself to cover the mortgage. The problem I now face is the interest-rate hike, which I will have to absorb. My tenants are hard-working people, and I wouldn’t like to charge them more. Also, they and their children are settled; there is nowhere else for them to go if I sell the house. In any case, if I sell I am caught for capital gains tax at 33 per cent. I don’t mind paying my taxes, but 51 per cent is excessive, as the house needs maintenance yearly, and as it gets older more things go wrong and cost more. Most small landlords have to charge more because of the tax to pay the mortgage. I would hope the Government would reduce the tax to help alleviate the tax burden.

‘We’ve decided to leave our rental property empty. It’s sad, as we have been inundated with requests to rent it’

Emma Mooney, Co Galway

My husband and I work full time, have three small children and currently have a substantial mortgage remaining on our family home, which we built ourselves. We rent out the house where we lived for 11 years before that, which we had paid top dollar for. We had planned to sell it, but the downturn in the economy at the time meant this was not financially viable. So we’ve rented it out for the past five years — and have been unlucky with some of our tenants. We have had to have it painted and decorated at least twice, as well as having to replace furniture. Add the mortgage repayment and the 53 per cent tax rate on any rental income and we’ve decided to leave it empty. It’s sad, as we have been inundated with requests to rent it. The Government needs to seriously look at landlords and their situation; in our experience the laws have all been geared to protect and help tenants in the past five years, with no consideration for the landlord.

‘We spent €12,000 on a second shower but can’t increase the rent’

Lisa Milligan, Co Dublin

Having recently spent €12,000 on putting a second shower in my property, we are not entitled to increase the rent as we didn’t move a wall or make any other structural change. Ridiculous. All completely against the landlord.

‘For the genuinely decent landlord, what exactly is the incentive to rent out a property?’

Grainne, Co Dublin

Last Friday I sold my modest two-bed apartment in west Dublin — a bittersweet day, it being my first home. It was bought for a fair, “normal” price in 2003, and myself and my husband lived there until 2006, when our eldest daughter was born. Ireland was at the height of the property boom, and banks were throwing money and 40-year mortgages at people, so when we decided to move to a house because our family was growing (not because we wanted to become rich landlords), our bank advised us to hold on to the apartment at all costs and take out a top-up loan to buy the house. We moved in at the end of 2006 — and 12 months later the house was €100,000 in negative equity, as the property market had crashed.

We had rented out the apartment at a fair €900, which just about covered the mortgage — and this is where the Government gets it wrong in the first instance. It treats all landlords exactly the same, whether you rent out a number of properties, a house with many rooms, or just a small apartment in west Dublin. For the genuinely decent landlord, after paying tax on rental income, hefty management-company fees, insurance, maintenance costs and the mortgage itself, what exactly is the incentive to rent out a property? This is why landlords are selling up.

Another major issue is the rent-pressure-zone rule that rents cannot exceed general inflation. Inflation is over 9 per cent now, and fair and decent landlords are affected by that too in their own daily lives, trying to make ends meet. When my tenant moved out at the end of 2021, having been there for more than five years, I was informed that the rent couldn’t be increased because it was in a rent pressure zone. Therefore, at 2021 rental-market prices, the apartment a few doors up owned by a greedy landlord could be advertised with a rent of €1,800 and the fair and decent landlord who kept rent low for five years must continue to rent at half that price. How is that a fair system? Deciding to sell the apartment at the start of this year seemed like a good decision, as nothing is changing to entice fair and decent small landlords to stay in the market.

‘You wonder why you ever got involved’

Anthony Stapleton, Co Dublin

I’ve been a small landlord for more than 15 years — I am self-employed, and this is my only pension. Fortunately, I’ve had good tenants. The crux issue is tax — penal, unfair tax of more than 52 per cent. If you do any work yourself on the property, you cannot claim expenses for it. When your accountant tells you every year to sell the property, as it’s loss making, you wonder why you ever got involved. When young investors ask me should they invest in property, I advise them to avoid at all costs.

‘The damage was horrendous’

A O’M, Co Cork

Our tenant took advantage of the RTB loophole and stayed at the property for 16 months without paying rent. It took us years of civil and criminal courts to get it back, at a cost of more than €100,000 and our health. The damage he caused was horrendous. We will never, ever rent out a house again.

‘The only thing that stops me selling is that I’d make a family with a young child homeless’

Niamh Farrell, Co Limerick

I became a landlord when I moved out of Dublin to live with my partner during Covid. I had purchased my apartment in 2019 and would have made a loss if I sold the property so soon after investing my life savings in the purchase. I have wonderful tenants — a family — and am delighted that they have made my apartment their home. I’d like to charge them significantly less rent, but with more than 50 per cent of the rent going to tax, I cannot reduce the rent, as I wouldn’t be able to make the mortgage payments. I’d also like to invest in upgrading the heating system, to lower the tenant’s bills and improve the property, but there is little to no incentive to do so. The property barely breaks even, and I’m fully aware that in the long run I will have an asset, but in the immediate term the only thing that stops me from selling and making a quick buck is that I’d make a family with a young child homeless.

‘We’ll be charging €1,225 for a five-bedroom house, or about 40 per cent of the market rate’

Des Keaveney, Galway

In 1997, when we moved to a house outside Galway, we decided to keep our existing house and rent it out — with the aid of a redundancy payment we were able to take out two mortgages. Our first tenants only lasted three months, as they found a house to buy much more quickly than they had expected. Subsequent tenants have lasted much longer — up to nine years. Because we had such good tenants we did not increase the rent very much. Currently we are charging €1,134 for a five-bedroom house in Galway city. The going rent for a four-bedroom house in Galway city is €3,000 or more. We last increased the rent in November 2018; I will be increasing it in November by 8 per cent, as 2 per cent per year is the maximum increase allowed in a rent pressure zone. The new rent will be €1,225, which is about 40 per cent of the market rate. I think €3,000 per month is too much to pay for an average family.

The problem for us is that, as we have both worked full time since we first rented out the property, we have been paying the top rate of income tax and USC on the rent less expenses, including LPT, which is not tax deductible. That amounted to more than 50 per cent in taxes. If we sell this house we will have to pay a large amount of capital gains tax, as we only lived there for three years. For most of the first 20 years, the after-tax income from the rent did not pay the mortgage. Anybody getting market rates of rent should be making a profit, even after mortgage payments and taxes.

‘When the tenants have more rights, the owners have fewer, so they start to exit the market’

Bill Forde, Co Cork

I have travelled the world and seen simple and very effective approaches to the supply of affordable family homes. In Colombia, when you get your first job you sign a contract to buy an apartment or house that won’t be built for many years. You pay the builder instead of saving in a bank. This gives a great incentive to young workers, as it’s tax efficient and you have been in a model of the apartment you are going to buy and can visualise your dream home. You may be only paying a very small amount each month, but you know you will own that specific apartment one day. Your payments are state guaranteed, and you can upgrade or downgrade, or change scheme or location, with ease as your circumstances change. The cost of an average two-bed apartment is about €60,000, and the build quality is to a high standard, with most apartment blocks having gyms, swimming pools, outdoor play areas and gardens.

In the UK you can buy an investment house and just give it to the local housing authority. It pays you a rent just below the market rent, but it’s guaranteed (even if the house is unoccupied at the time), and you never see or hear from any of the tenants, as the property is managed by the housing authority, which does the repairs and manages the tenants from its housing lists. As an owner you can have your property back at any point with reasonable notice. This is a thousand times better than the housing-assistance-payment scheme. The vast majority of HAP tenants are great, but the risk of a bad tenant is a big deal for the owner. If the tenant decides not to pay, for example, the scheme won’t pay the owner, who is left with a big problem trying to get the tenant out. That’s why owners prefer tenants who are not dependant on HAP.

The Government has concentrated on trying to protect the tenant over the last 10 years. That’s fine — tenants must have rights — but when the tenants have more rights, the owners have fewer, so they start to exit the market. That creates a huge shortage of rental property, which drives property prices up and so makes it more attractive for landlords to sell, creating a perfect storm. In my view this is just another prime example of the Government firefighting the issue with panic measures, without any long-term thinking. If it adopted the British system in the morning it would make a huge difference very quickly.

‘The house was a mess, and the total loss came to €9,000. It broke me’

Siobhán M

I bought a property a couple of years ago. It had tenants already. The rent was quite low, but I didn’t mind, as I just wanted to have a house I could eventually use myself. Last year the tenants stopped paying rent. I tried to reach out, the agency reached out, but no response. We filled in rent-supplement forms for them and sent them to the tenants. Complete silence. I opened a dispute with the RTB. It took about four months for the RTB to have a sitting. A week before it, the tenants moved out and left the key in the porch. Then the RTB informed me that unless I could find the tenants’ new address, it would be unable to go ahead with the hearing. So I was forced to close the dispute. The house was a mess, and the total loss, including repairs, came to €9,000. For some people this is not a lot of money, but it broke me. I have now a family member living in the house and helping with the mortgage. If this wasn’t my only property I would have sold it. I got no support, no justice. I feel sorry for the small landlords who are stuck in the system. The small “profit” you get after tax and repairs isn’t worth the damage and stress.

‘People talk badly of landlords and think I make loads of profit, which is outrageous’

Faraz Shariff

Don’t invest in being a landlord. This is my recommendation for every hard-working person who is thinking of being a landlord. I got into the business thinking it may stabilise my financial condition. I and my wife saved the deposit by sacrificing many things for years. Later I realised that, after paying the mortgage, management fee, agent’s fee, insurance, repairs, RTB fee and tax on my rental income, I am left with €1,200 per year. That’s €100 per month profit. This is so not worth the effort. And to add to the damage, people talk badly of landlords and think I make loads of profit, which is outrageous. To make matters worse, the Government rules are getting tighter and tighter and squeezing every drop of blood from landlords like me. I am planning to get out of rental market and invest my money somewhere my efforts would be appreciated. I and my wife don’t have kids, as we can’t afford them yet. Thought rental income would support us in raising a child, but ...

‘Our property still represents an excellent investment asset’

Colm Healy, Co Dublin

We’ve rented out our former home in Ranelagh for more than 10 years. We held on to it because it offered by far the best available reliable income, notwithstanding the fact that we are higher-rate taxpayers. We’ve always had excellent tenants. (In one case they did all minor repairs themselves, never bothering us.) There is some work involved, and as we don’t both work full time this is manageable. Typically, tenants stayed for about three years before moving into a more permanent home. Over 10 years the rent has increased by about 12.5 per cent. It has probably been below market in the last two years due to rent controls. Net income before tax is between 90 and 95 per cent of gross income, as expenses are modest. Obviously, net income after tax works out at about half this, and I’d estimate the current net rental return at about 2.5 per cent. Our property still represents an excellent investment asset, with regular income and a strong likelihood of continued capital appreciation over the medium to long term.

‘I have to put the rent up every year, so the current tenants get screwed for an increase that would normally be passed on to the next ones’

John Costigan, Co Dublin

I’ve three apartments in Dublin rented. The rent-pressure-zone cap on rent increases is counterproductive. I’m forced to increase the rent by 2 per cent each year when I’d prefer to leave the rent at same level if the tenants are good. By forced I mean that if I don’t increase rent, when a new tenant signs up I can only increase rent by 2 per cent on the previous year. So, as I have to put the rent up every year, the current tenants get screwed for an increase that would normally be passed on to the next tenants. Also, the law should be changed so that a new owner of a vacant property can charge the market rent. Current law prevents this and allows the new owner only to increase rent by 2 per cent over the previous rental under the previous owner. This crazy system means that a low-rent property that is sold is very likely to leave the rental market. My advice to the Government is to remove rent pressure zones and the artificial rent cap.

This article was edited on August 15th