Tenants are not the only ones with grievances in today’s rental market. Rents may be approaching boom time levels, particularly in Dublin, but for landlords, a combination of factors – such as rising taxes, PRSI on rental income; property tax, water charges, unpaid rent, negative equity, arrears – means the property game is not the earner it once was.

“If the impression is that landlords are enjoying something of a bonanza, it’s far from the case,” says Coleman O’Connor of O’Connor Shannon estate agents. Most of the increases in rent are going to the bank or to the Government, O’Connor says. “You might think [landlords would] be encouraged by high rents, but when you consider taxation, it takes the good out of it.”

Fintan McNamara of the Residential Landlords’ Association says a landlord today can expect that about six in every 10 euro earned will go into the state’s coffers. This is up from about €4 pre-recession.

Consider the example of someone renting out a two-bedroom apartment in Drumcondra, north Dublin, they had bought for €350,000 on a tracker mortgage in 2005.

Their monthly mortgage repayments would be about €1,100, and with rent of €1,400 a month, you could be forgiven for thinking that they’re on easy street. But on such a property they could face an annual rental income tax bill of about €7,500 – a significant shortfall.

“Really, something has to be done in terms of reliefs and taxation,” says McNamara, arguing that the reduction in mortgage interest relief to 75 per cent in 2009 was a “huge blow”. “Some landlords never recovered from it,” he says. Recently announced measures mean landlords will be able to claim 100 per cent tax relief again, but only on social housing.

Market rents

But tax is not the only difficulty, landlords say. “Our main difficulty is the rent supplement,” says McNamara, noting that while most rent-supplement tenants are compliant, many struggle to make the 25 per cent contribution (local authorities pay the remaining 75 per cent), and thus fall into arrears. He would like local authorities to pay 100 per cent.

Dealing with tenants who don’t pay or who damage the property can be difficult. It should take about five months to sort out such issues via the Private Residential Tenancies Board (PRTB), but many landlords say it takes much longer.

This means that landlords aren’t doing what they typically do – taking on more properties – which may be exacerbating the squeeze on supply.

One area where this squeeze is keenly felt is in older Georgian and Victorian houses in areas such as Rathmines, Rathgar or Phibsboro. Known as “pre-63 buildings”, a reference to the the Planning & Development Act 1963, these houses were often divided into flats. However, regulations introduced in 2013 put an end to bed-sits and shared bathrooms.

Some landlords avoided compliance by exiting the market, others are leaving vacant some flats that are not compliant. O’Connor says there is now a “good case” for allowing some of these properties to go back on the market, given the current shortage.

Despite the stereotypes, landlords are not a homogenous species. There are at least three types. Older landlords operating in the larger cities often acquired “pre-63” properties, sub-dividing them into bed-sits and flats. But new regulations on those buildings have put many of them out of business.

“We’ve sold quite a number of pre-63 multi-unit buildings for people who combined their retirement with the introduction of the new regulations,” says O’Connor, noting that many decided that rather than taking on a builder and incurring substantial cost in bringing the buildings up to scratch, they would sell up. “There has been a sizeable number lost to the rental market,” he says.

But even of the older landlords who have remained in business, many took on additional debt during the boom, and as such, are facing similar challenges to newer landlords.

PRTB figures show that more than half of those who have been landlords for more than 10 years, have outstanding debt on their properties.

There is also the “accidental landlord”. As many as one-third of landlords are thought to be reluctant ones. Figures from the PRTB show that two-thirds of all landlords own just one property, and 84 per cent own two or fewer.

Many have emigrated but either couldn’t or didn’t want to sell their property; others moved after having children; others may have downsized to a cheaper property or moved back with their parents.

Negative equity

Then there is new type in Ireland, the “professional” landlord, who has been snapping up properties around the capital. But it’s not a person. Real estate investment trusts (Reits) are property investment companies – common throughout the world, particularly in the US – listed on a stock exchange and investing on behalf of shareholders.

The Canadian-run Ires Reit, for example, has 1,566 apartments in Dublin and they don’t come cheap. Average rents for a two-bedroom home near the Marker Hotel are €2,283 a month. Tenants can expect a professional level of service. Attention to maintenance is a cornerstone of Ires’ business model. However, they can also expect whatever rent increases the market can take.