3 for 1 on offer in Kildare

mrgaa1

http://www.independent.ie/national-news/boom-buyers-seethe-as-units-now-three-for-price-of-one-1945377.html sign of the times

ronbyrne2005

mrgaa1 wrote: »

http://www.independent.ie/national-news/boom-buyers-seethe-as-units-now-three-for-price-of-one-1945377.html sign of the times

You would have denied that was possible two years ago Mr GAA. How much lower do YOU think prices will go?

Tech3

Still a crazy price for a crappy appartment in a f ugly place.

mrgaa1

apartments are always overpriced. No real front door or anything. Things change and we all have to adapt.
There is no point in saying anything until the new year once NAMA and the budget take hold. However I'd say there are areas in the country where the bottom is there but with no lending taking place from our fabulous institutions potential buyers can't buy. There are areas in the country where prices have a way to go yet. But the investors are sniffing around looking for the bargains - myself included.

gurramok

Why invest in Newbridge when rents are collapsing in the main population base Dublin?

Only thing going for those apts is their size at 65-80sqm, alot better than the crap that had sprung up during the bubble.

spockety

mrgaa1 wrote: »

However I'd say there are areas in the country where the bottom is there but with no lending taking place from our fabulous institutions potential buyers can't buy.

Er, you do realise that availability of credit is a factor in the market, right?

How can you say that a bottom has been reached in any area where credit at that level is still not available?

mrgaa1

didn't i refer to that in my post?

jmayo

mrgaa1 wrote: »

apartments are always overpriced. No real front door or anything. Things change and we all have to adapt.
There is no point in saying anything until the new year once NAMA and the budget take hold. However I'd say there are areas in the country where the bottom is there but with no lending taking place from our fabulous institutions potential buyers can't buy. There are areas in the country where prices have a way to go yet. But the investors are sniffing around looking for the bargains - myself included.

Ah dear the days of interest only mortgages are dead and gone. :rolleyes:

Bargains at the moment ?
Some investors :rolleyes:
Most sane people would not invest in Irish property, residential or commerical, at the moment.
Rents are falling, property prices are falling, and it looks like getting much worse before it ever gets better.

stepbar

mrgaa1 wrote: »

apartments are always overpriced. No real front door or anything. Things change and we all have to adapt.
There is no point in saying anything until the new year once NAMA and the budget take hold. However I'd say there are areas in the country where the bottom is there but with no lending taking place from our fabulous institutions potential buyers can't buy. There are areas in the country where prices have a way to go yet. But the investors are sniffing around looking for the bargains - myself included.

Ok Mr "investor", answer me this with a straight face.... What yield would you be looking for on the apt linked above and then tell me what price would you pay for it?

Agent J

I see the word apartment and i think " unregulated property management fees".

No way, No how.

mrgaa1

stepbar wrote: »

Ok Mr "investor", answer me this with a straight face.... What yield would you be looking for on the apt linked above and then tell me what price would you pay for it?

As these apartments are firesales under the auspices of an administrator I'd expect to pay about 105k.

Now i always work on a 20year scale. I'm not in it to make a quick killing unless someone offers silly money.
So I'd be setting rent at approx 500 a month - to undercut everyone else and to get good tenants - rising 2% per year on average over that time.
I'd expect the apartment to increase by 100% minimum in the 20 years given the very low level its coming from.

So what do you think now?

_Kooli_

Id buy three of them myself at that price

Oh wait ..... but who knows how hard i'll be shagged by Brian Lenihan in property taxes in the next few years, depending on his mood.

Not worth investing since you dont actually know how much you are spending. No stability from our minister for finance = no investment in property.

While i can see where you are coming from Mrgaa, there is just no stability, so why take the risk?

EKRIUQ

mrgaa1 wrote: »

As these apartments are firesales under the auspices of an administrator I'd expect to pay about 105k.

Now i always work on a 20year scale. I'm not in it to make a quick killing unless someone offers silly money.
So I'd be setting rent at approx 500 a month - to undercut everyone else and to get good tenants - rising 2% per year on average over that time.
I'd expect the apartment to increase by 100% minimum in the 20 years given the very low level its coming from.

So what do you think now?

Not a bad theory but but better find out about management expenses as they could be €1,200 pa and that will eat into your plan

stepbar

mrgaa1 wrote: »

As these apartments are firesales under the auspices of an administrator I'd expect to pay about 105k.

Now i always work on a 20year scale. I'm not in it to make a quick killing unless someone offers silly money.
So I'd be setting rent at approx 500 a month - to undercut everyone else and to get good tenants - rising 2% per year on average over that time.
I'd expect the apartment to increase by 100% minimum in the 20 years given the very low level its coming from.

So what do you think now?

What you're basically telling me is that you're prepared to accept an initial rent yield of c 4.75% (assuming 1k mgt fees). A 2% increase is c10 eur per year, lets say you end up with c720 p.m in 2029, which is a yield of c7.3%. I would consider 6% to be a prime rent yield, not the yield for a gaff in Newbridge.

Why not start at 7% (i.e. 500eur x 12 less mgt fees / 7 * 100 = a price of 71.4k for your 2 bed investment. Why in gods name would you be prepared to accept such a low initial rent yield
And what worse I'm not even taking into account expected interest rate increases, voids, income tax or anything else!

mrgaa1

the reasons for being so low are that I think there are 20 apartments being sold at the 110k or there abouts. So there will be competition to get tenants. If you can afford to do it for 500 a month why not? Both parties win and if you get a good tenant out of it we're all happy

PLUS theres a first someone complaining about low rent

OMD

stepbar wrote: »

What you're basically telling me is that you're prepared to accept an initial rent yield of c 4.75% (assuming 1k mgt fees). A 2% increase is c10 eur per year, lets say you end up with c720 p.m in 2029, which is a yield of c7.3%. I would consider 6% to be a prime rent yield, not the yield for a gaff in Newbridge.

!

It is only a yield of 7.3% if you assume prices do not rise for next 20 years. If mrgaa is right and prices double in the next 20 years then it will be a yield of 3.7% which in theory would be very achieveable.

stepbar

mrgaa1 wrote: »

the reasons for being so low are that I think there are 20 apartments being sold at the 110k or there abouts. So there will be competition to get tenants. If you can afford to do it for 500 a month why not? Both parties win and if you get a good tenant out of it we're all happy

PLUS theres a first someone complaining about low rent

I'm not complaining about low rent. I'm mystified about the fact that you are prepared to accept a low rent yield based on the fact that rents are falling and interest rates will in the medium / long term be increasing.

mrgaa1

fair point. I suppose that like most things they get assessed as they go along and changes, if any, can be applied. Best to go conservative - anything better is a bonus.

_Kooli_

stepbar wrote: »

I'm not complaining about low rent. I'm mystified about the fact that you are prepared to accept a low rent yield based on the fact that rents are falling and interest rates will in the medium / long term be increasing.

In fairness they are all variables we dont know anything about. We dont know what way rents will go in a few years. We dont even know what effect if any rising interest rates would have on him. He never said how much he would borrow.