Property Investing Dublin

handlemaster

Now I know before I say anything people will say your mad.But I see prices coming down alot more over the coming year. I would be interested in investing in an investment property. I was wondering looking at area's such as Crumlin/ Drimnagh (two bed houses) versus city centre one bed apartments. Which would be the better investment with regard to return on investment etc

Money Shot

There are plenty of other investment opportunities besides property. There will soon be a heft annual property tax coming in, interest rates can only go upwards, and prices are still delusional, at best. If you want a return on investment, I would look at different asset categories.

Why do you think everyone is trying (and can't) to get rid of their apartments now ?

handlemaster

Money Shot wrote: »

There are plenty of other investment opportunities besides property. There will soon be a heft annual property tax coming in, interest rates can only go upwards, and prices are still delusional, at best. If you want a return on investment, I would look at different asset categories.

Why do you think everyone is trying (and can't) to get rid of their apartments now ?

Its the herd mentality. Just like property boom people over react. There would be investors that didn't make good investment decisions i.e. paid to much of the property in the first place.

Money Shot

handlemaster wrote: »

Its the herd mentality. Just like property boom people over react. There would be investors that didn't make good investment decisions i.e. paid to much of the property in the first place.

I'm just saying that the fundamentals of investing in property aren't there, so not sure why you'd want to. Do you have money on the hip to invest, or will you be taking on debt to invest ?

handlemaster

No money on the "hip", just deposit. If you look at one beds could get one for around 100k. 20 % deposit. Repayments EBS fixed rate for 10 years @ €550. Most 1 beds in city centre are making between 750 - 1000 per month

paddydriver

handlemaster wrote: »

No money on the "hip", just deposit. If you look at one beds could get one for around 100k. 20 % deposit. Repayments EBS fixed rate for 10 years @ €550. Most 1 beds in city centre are making between 750 - 1000 per month

Don't forget that out of that 750 - 1000 P/M you have to pay tax, service charges, NPPR, rental expenses etc and soon to come property taxes.

Gov is starting to shut down all the reliefs that you can get - mortgage interest relief down to 75% already and even at that the interest rates are so low you don't get much relief out of that.

Owning property in a growing market was perceived to be great - you had an appreciating asset that cost minimal to look after; that whole perception changes when prices are rapidly going down and suddenly its a depreciating asset that's costing a load to look after!

Things are OK if you have a decent tenent but all changes when no tenent or a sh!tty tenent that won't pay rent, won't move out and may be wrecking your property.

I have experienced all of them and at this stage I just need to sit back and ride it out - Thankfully we just have my wife's appartment that usually rents fairly well and its not too bad cause it was bought in 2003 but know people who paid top €€ in 2006 etc and they are really feeling the pressure.

Just think it through carefully before thinking its a straightforward investment.

Personally - I think your figures stack up relatively well and it does seem like an OK investment. Would be wary of 1 bed's though as they really have very little sell on potential for the next 5-6 years.

Property will come back in value, all statistics from all countries show this, but it will take a while.

Paddy

Cookie_Monster

invest in uranium or some other heavy metal, much better return long term, especialy with increased nuclear generation coming on stream again.

handlemaster

paddydriver wrote: »

Don't forget that out of that 750 - 1000 P/M you have to pay tax, service charges, NPPR, rental expenses etc and soon to come property taxes.

Gov is starting to shut down all the reliefs that you can get - mortgage interest relief down to 75% already and even at that the interest rates are so low you don't get much relief out of that.

Owning property in a growing market was perceived to be great - you had an appreciating asset that cost minimal to look after; that whole perception changes when prices are rapidly going down and suddenly its a depreciating asset that's costing a load to look after!

Things are OK if you have a decent tenent but all changes when no tenent or a sh!tty tenent that won't pay rent, won't move out and may be wrecking your property.

I have experienced all of them and at this stage I just need to sit back and ride it out - Thankfully we just have my wife's appartment that usually rents fairly well and its not too bad cause it was bought in 2003 but know people who paid top €€ in 2006 etc and they are really feeling the pressure.

Just think it through carefully before thinking its a straightforward investment.

Personally - I think your figures stack up relatively well and it does seem like an OK investment. Would be wary of 1 bed's though as they really have very little sell on potential for the next 5-6 years.

Property will come back in value, all statistics from all countries show this, but it will take a while.

Paddy

Paddy. I won't be rushing into it. Just towards the middle of next year, see how things are going. So going by what you were saying the 2 bed houses might be a better option.

handlemaster

Cookie_Monster wrote: »

invest in uranium or some other heavy metal, much better return long term, especialy with increased nuclear generation coming on stream again.

I thought the cookie monster only liked cookies!! Uranium is strongly underpinned by the americans not releasing their vast stocks, which I believe they have under taken not to do. But its a little risky

dearg lady

handlemaster wrote: »

No money on the "hip", just deposit. If you look at one beds could get one for around 100k. 20 % deposit. Repayments EBS fixed rate for 10 years @ €550. Most 1 beds in city centre are making between 750 - 1000 per month

I'd imagine you're being quite generous with your estimations of rent there

handlemaster

dearg lady wrote: »

I'd imagine you're being quite generous with your estimations of rent there

I haven't seen any one bed apartments cheaper than that. Point me to where your getting these cheaper apartments

listermint

dearg lady wrote: »

I'd imagine you're being quite generous with your estimations of rent there

I think he is being fairly spot on, what dingy placey are you living in ??

dearg lady

handlemaster wrote: »

I haven't seen any one bed apartments cheaper than that. Point me to where your getting these cheaper apartments

according to Daft report, average ASKING PRICE €806 in Dublin 1, and €918 in Dublin 2, and it seems likely actual rents are lower than this. May I ask where (general area) you're looking at 1 bed for 100k?

dearg lady

forgot to include link
http://www.daft.ie/report/

handlemaster

dearg lady wrote: »

according to Daft report, average ASKING PRICE €806 in Dublin 1, and €918 in Dublin 2, and it seems likely actual rents are lower than this. May I ask where (general area) you're looking at 1 bed for 100k?

There are a few in Daft plus other property web sites. I'd be more looking at the ones that are currently @ 130k or lower which by this time next year or even now with haggling would come it at 100k or lower.

dearg lady

handlemaster wrote: »

There are a few in Daft plus other property web sites. I'd be more looking at the ones that are currently @ 130k or lower which by this time next year or even now with haggling would come it at 100k or lower.

quite possibly you will get one for that price, but equally, rents could come down. It seems odd to me to base your decision on current rents but future prices.
I'd just err on the side of caution if I were you, look at the lowest rent you're likely to get, consider the months it won't be rented. Don't forget about things like insurance, spending on wear and tear, management fees, tax on rental income etc etc.

Kimia

Handlemaster, just for your consideration on 1 beds, I pay 1000 for a gorgeous 2 bed apartment in South Dublin. I doubt very much you'll get 1000 for a one bed.. even in town.

paddydriver

handlemaster wrote: »

Paddy. I won't be rushing into it. Just towards the middle of next year, see how things are going. So going by what you were saying the 2 bed houses might be a better option.

Hi, if you can stretch to it I would definitely get a 2/3 bed house but I expect it will cost a lot more and not give you as much of a rental yield - although there is a price point rent wise and 2 bed apartments seem to hit the spot well in that respect. When renting I always compare the competition - and then ask prospective tenents about what the competition was like; i.e. were their photo's up to date etc - and you would be surprised by the answers!

Anyway - back to point; I would see 2 bed houses renting for only a few hundred more than our place but it seems people are not interested in a 2 bed house if a 2 bed appt will do - especially if they don't want to spend that extra few hundred quid. Its easier to maintain, heat etc and renters tend not to have as much baggage/belongings (dare I say kids too) and don't need all the space of a house.

Other thing is that the HSE rent supplement will better cover a 2 bed appt and won't stretch to a house unless you have a gaggle of kids etc.

Paddy

Wildebrian

Hi

Whenever you decide to buy (or Not) be sure to purchase a property with a decent energy rating,avoid Electric storage heating at all costs, and aim for a B3 at worst.Remember the day you buy is the day you sell and even a B3 rating will be regarded as relatively poor in less than 8-10 years

Irish Slaves for Europe

Wildebrian wrote: »

Hi

Whenever you decide to buy (or Not) be sure to purchase a property with a decent energy rating,avoid Electric storage heating at all costs, and aim for a B3 at worst.Remember the day you buy is the day you sell and even a B3 rating will be regarded as relatively poor in less than 8-10 years

But surely virtually no properties in Dublin will have decent energy ratings, apart from new apartments which the OP is not looking at.

I was thinking the same as the OP when I saw apartments were now 100k, but I did the calculations and the return on your money isn't great when all your costs are included. Much better to just put your money in a high interest savings account or the national solidarity bond.

Wildebrian

Hi,

you are probably right at the moment but at some stage the market will turn and then capital appreciation will become a Factor.

From an energy efficiency view point it is important to factor into your investment the cost of improving the BER Rating.Some improvement measures are not as expensive as others and can improve the rating significantly.If your investment has storage heating the cost of hitting a B3 would be quite high.

daithi2011

If this helps any OP here is my experience of it.

I started buying property in 1995.

Bought another apartment every 1 - 1.5 years after that, and decided to get out of the game in 2005. I sold all except one apartment in 2005/6. Looking back, I should have sold it then but decided to keep it just to have for the family, since the mortgage was fully paid off and i'd made a nice few quid on the rest.

At first I managed them myself, but what I found was that it was easier to give the management of the properties to a trusted agency. You can bargain them down very hard on the percentage they take. This takes all of the work out for you, apart from year end taxes, which are easy enough to do. The cost comes off your profit so it works out well. You should be able to get full management for about 7.5% these days (they will ask for 10 or 12%, but know they wont get it). Bargain hard if you go down that route.

I also found having had 1 and 2 bed apartments, if I was to do it again I would stick to 1 beds. Yield is far better. Almost no maintenance at all on them apart from painting and the odd broken appliance. The 2 beds were fine but yield was lower and there was much more wear and tear. Appreciation was not significantly greater than the 1 beds. 1 beds were far far faster to let too.


I was thinking about jumping back in now, since the profits were extremely good and the money is just sitting in the bank. But now if the removal of the remaining tax relief is going to happen, im not interested. I'll wait it out for a while and see what happens with the whole tax situation.

I feel the price is right or almost right now, but the landscape is very dodgy regarding tax, expenses etc. Stability in your costs is whats needed. You dont want to be getting 75% relief when you buy, only to get 50% or zero relief after a year. Not worth the risk.

Most important of all is to diversify. OK so property is cheap here now. You need to invest in the UK and Ireland. Possibly other countries if you know the lay of the land there.
But you need to invest in the shares etc too. Dont confine it to property.
The best/worst thing about property is gearing. Be very careful here.

Arthurdaly

An investment? Are you borrowing to pump money into prop? Why? Why would you invest in a falling investment class? On top of everything else you are borrowing to invest 100% into an investment class? As somwe previous posters said diversify and spread, why would you invest 100% in a falling market?