Recessionary renting is painful for all, says ISABEL MORTON

RENTING MIGHT well be the new buying, but it’s not without its own set of problems. As usual, there is no one-size-fits-all approach, either to being a landlord or a tenant.

Not all landlords are mean and greedy, nor all tenants irresponsible and unreliable. Both groups are experiencing their own difficulties.

Although many tenants are struggling on reduced earnings, the reality is that most landlords, particularly those who invested in property within the last decade or re-mortgaged based on boom-time property valuations, are unlikely to be receiving enough rent to service their debts, let alone earn them any profit.

Already many are finding it impossible to service their mortgage, let alone afford property-related taxes, maintenance and repairs. They can’t even get rid of their rental property, due to negative equity.

The tables have turned to such an extent, that some landlords must now beg for leeway from their tenants, as many don’t have the wherewithal to replace faulty appliances or do basic repairs.

Of course, the Irish rental market varies dramatically from one location to the next and from one property type to another and, where there might be a glut of family homes lying empty in many rural areas, there may be a shortage of similar homes in some Dublin suburbs.

Letting agents report that the shortage is due to a number of factors, including properties, which are no longer on their books because their owners (or their banks) are attempting to sell them and those whose leases are automatically renewed each year, by existing tenants who continue to rent and wait for property prices to fall further.

Stories abound of banks which, in an effort to recoup some of the capital owed, insist that people evict tenants and sell their properties. In today’s stagnant sales market, it appears to be a pointless exercise because banks are not lending to potential buyers.

As a result, letting agents complain about the lack of good quality, well-located family homes and report that this shortage is causing rents to climb again in certain areas.

Recently, a number of letting agents have reported that they can’t find well-presented large family homes for clients wishing to rent, what we once referred to as “trophy homes”.

It is equally disappointing at the other end of the spectrum, as one newly married young couple told me recently.

Having just moved back to Ireland from the US, they found that decent one-bedroom apartments in Dublin are hard to find and they were shocked at the Irish standard of presentation.

They found newly constructed purpose-built apartment blocks to be small, soulless and predictable and yet charming older buildings were cold, badly insulated and had dark, grimy and unappealing common areas (such as halls, stairs and landings).

And they were disappointed to find a similar selection of uninspiring cheap and nasty furniture everywhere, including the landlord’s favourite, the black leatherette sofa.

But property investors are equally depressed at tenants’ bad behaviour, as one young landlord explained: “I’ve just spent most of the week clearing out the mess my tenants left behind, having run off without paying the last month’s rent. They wrecked all the furniture and left a load of their rubbish so I’ve had to get a skip to clear it out. It’s pointless making a place look good, they don’t appreciate anything.”

Recently however, I was forced to look at things from the other side of the fence, as I had to advise a friend, who lives abroad, on what she should do with a two-bedroom apartment she owns in a smart suburb of south Co Dublin.

Perfectly located beside all amenities yet private, quiet and with great sea views, the apartment has rented quite successfully over the years but the décor was in need of updating, particularly the kitchen and bathrooms, which had not been replaced since the property was built some decades ago.

Should she leave well enough alone and continue to try to let it again at a reduced rate, reflecting the fact that the interior is not quite up to the standard one might expect of an apartment in that particular location?

Or should she accept the fact that she had got great value out of the existing décor but it is now necessary to give the apartment a new lease of life?

There was a time, when the answer would have been clearly obvious. These days, I thought long and hard about it and, based on the old adage: “Location, location, location”, I recommended a revamp, but done to a tight budget.

And thinking about the furnishings, I could suddenly understand the appeal of the landlord’s favourite; the “tenant-proof” black leatherette sofa.

Isabel Morton is a property consultant