Monday 14 October 2019

Budget 2020: 'We’re being hammered left right and centre' - Landlord says public don't understand cost of letting property

Dan Fitzsimmons, landlord, and owner of Positive Property letting agency Photo: Damien Eagers
Dan Fitzsimmons, landlord, and owner of Positive Property letting agency Photo: Damien Eagers

Mícheál Ó Scannáil

THE PUBLIC don’t understand running costs associated with letting property, according to a ‘struggling’ landlord.

Dan Fitzsimmons said that landlords are struggling to keep their heads above the water with rent caps and the rising costs associated with the profession.

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Mr Fitzsimmons owns Positive Property letting agency which manages around 250 properties and also has a private portfolio of properties.

The father-of-three said that landlords are really struggling with rent caps and taxes, despite the vilification they receive from the public.

"It hasn't been easy trying to keep my head above water with all of the stealth tactics associated with renting property,” he told Independent.ie.

"I think there were promises last year that were flown before the Budget which really weren't fulfilled.

"Landlords in general are being hammered with their taxes. The rental income is being added onto their income and USC and PRSI and everything else is being charged.

"So, there's not much left once the banks are being paid and the maintenance on the property is done up to minimum rental housing standards,which demands quite a lot from landlords.”

"They say the rent is the highest ever - it's still not covering the bills," he continued.

“You're never really on top. The government are in receipt of more than 50pc of what you're taking in and there's nothing really left in the pot after that. I'm hoping this Budget brings a bit more relief and maybe incentives there.”

 

Limits put in place in previous budgets for rent pressure zones (RPZs) mean that landlords operating within these areas cannot increase rents by more than 4pc each year. Every area in Dublin falls under RPZ.

The Malahide man said that the rent cap is crippling for "good landlords" who do not increase rent for a number of years while a tenant remains in the house. The problem with this, he says, is that after a few years the rent for the property will be well below its market value and cannot be increased by more than 4pc – so landlords have to operate off an income of only 4pc higher than in previous years, despite taxes and running costs increasing with inflation.

"I don't think people know the cost of being a landlord at all. There's a huge amount that goes into it," he said,

"The minute you have a bad tenant on board that wrecks the property, any money that you might have had in the fund is wiped out and you're playing catchup after that. 

"There should be more incentives for the individual landlord rather than these big conglomerate vulture fund landlords that are coming into the market building huge tranches of property - built to rent. They are availing of all of the benefits that are available to them, and not smaller landlords, and they can go into market, build these places and charge whatever they like rent-wise.

"There is effectively no RPZ in place for them.

"Landlords, especially those who have been good to their tenants over the years and have not increased their rent substantially are caught. They are now in a situation where they can't increase it at all and it's turning into a negative asset really going forward.

"There needs to be more provided for landlords and more relief.”

Mr Fitzsimmons added that he believes landlords who have not increased their rent for a number of years should be able to avoid the 4pc rent cap and return to market value. He does, however, fear that the rent increase cap could be reduced further and increases could be completely prohibited.

"If the tenant moves out, there should be an allowance to return to market at market rent. While a tenant is in situ, I think a 4pc increase is quite reasonable for both landlord and tenant.

"But I think once the tenant has vacated of their own accord, the landlord should be allowed to return to full market rent.

"I fear the maximum increase could be wiped out altogether. It's a flick of a pen that does it, so, where you have an opportunity to rise by 4pc, we're availing of it at every opportunity. If you don't, you could be caught on the other side where you can't increase your rent at all."

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