Investment property - Dublin 8 or Dublin 3

Varatha

Hi All,

I'm looking to buy an investment property. Got two options at the moment.

A 2 bed 1bath apartment in Dublin 8, near St.Patricks cathedral for €310K - Apartment needs complete revamp. Could cost an additional €20k. Can be rented for 2500

2 bed, 2 bath in North Strand Road, Dublin 3, East Wall (Near Newcomen bridge) for about €330K - Spatious apartment, really nice and ready to move in. But I'm not familiar with the area and the rental value here. There are 2 blocks of social housing across the bridge, 10 mins walk to connolly Station, No shops nearby.

Which one would u chose and why?

The main focus is on safety and rental yield. I know D8 well, the area around Francis Street is revamping and it is on the South side of the city and can attract a good rental.

I liked the location in D8 but the apartment block in D3. Will I go wrong if I chose the apartment in D3 over D8?

Please share you advise. Appreciate your help!

Many thanks!

3DataModem

Dublin 3 is a grand area for investment. Very close to Busaras and Connolly, and that area is getting nicer, but doesn't have the same premium as the equivalent on the south side.

D8 is absolutely continuing to improve, that's a pretty central location for that price, and the refurb need will keep some buyers away.

Based on what you've said, I'd probably shoot for D8, but both are good shots.

Any reason you are shooting for 2-beds?

Caranica

How do the management fees and development finances compare? Any big expenses coming down the line?

DubCount

I'd do neither as operating an investment property in Ireland at present is becoming impossible - risks of government interference or rogue tenants - eviction bans, rent controls... there must be wilder changes to come which haven't even been floated yet.

If I had to choose one, I would go D8. You gave the reason yourself - location, location, location. I would personally prefer D8 as a location.

ELM327

Do neither. Invest in REIT shares

Varatha

Thanks a million. I feel 1 bed prices are bit high, €250+ for a decent size apt. I might be wrong but I think €340 including revamp for a 2 bed sounds decent price at the current market conditions. I know the market is cooling down a bit but sure how far it would come down

Varatha

€2100 yearly for both the apartments. Both the apartment blocks are in good condition.

DFB-D

https://www.boards.ie/discussion/comment/119873022#Comment_119873022

Why would you recommend that?

Dividend yield at circa 5% but......

Shareprice for IRES for example circa 1.14, down from 1.65 in 2018.

Del2005

https://www.boards.ie/discussion/2058271704/investment-property-dublin-8-or-dublin-3

Where either rented before? If they were you could be stuck with a lot less rent than you think.

You also need to check what the status of the OMC sinking fund is like and if they are boom built blocks have they been checked for structural, fire and other defects. The pirite and mica issues are tiny compared to the potential amount of apartment blocks with issues.

Varatha

No rent cap on either of them. D8's was built in 2000 and D3 in 2007. I will check the sinking fund

ELM327

https://www.boards.ie/discussion/comment/119873186#Comment_119873186

One or two property as investment is a mugs game these days unless they change the regs and or tax treatment. Revenue is treated as income. Theres a reason a lot of mom and pop LLs are getting out of the game these days. Just not worth it.

REIT shares expose you to property without the risks.

DFB-D

https://www.boards.ie/discussion/comment/119873338#Comment_119873338

Well clearly there was a risk of 30% decrease in IRES if you invested in 2018.

So 30,000 on 100k loss, that's a disaster! Which reit were you referring to?

danfrancisco83

FWIW if I had circa 300k to spend on an investment property I'd look at Seapark apartments in Clontarf. 5 min walk to St. Annes park, on an excellent bus route, walk to Killester Dart in 15 minutes. East Wall is a kip.

HeidiHeidi

https://www.boards.ie/discussion/comment/119873265#Comment_119873265

How do you come to that idea?

There absolutely is a RPZ cap on all rental properties in Dublin - the rent they're currently getting may be at the upper limit, but that's slightly different.

And all rents are subject to 2% per year increase at the moment.

I would second, third and fourth the suggestion that you enquire very closely into if fire/building checks have been done, and if so, has remediation work been done or is it planned (this will have to be disclosed in the course of the purchase process anyway, but could help make an early decision).

steamsey

Not really answering your question so apologies, but think long and hard before you go down the investment property route. If you read up on the number of small landlords getting out, you might come to the conclusion that it's not a good idea. Also look at the number of apartment complexes with structural and fire issues - you could be landed with a 5 figure bill. I'd definitely do my homework on the management company - maybe see if you can talk to any current owners as not every structural/fire scandal hits the papers.

It's a very very long game to make it worthwhile and it's active - you will get phone calls about boilers, washing machines etc. I know plenty who have gone down this route deliberately or accidentally and regret all of it. I can think of none that are happy with their decision.

If you have cash that needs to be invested and pension and home mortgage are in good shape, then maybe it could work out. I certainly wouldn't take on an investment mortgage.

With that said, if you went for the D8 one, and it needs €20k repairs - check the tax treatment of pre-letting expenses to ensure you understand all that.

Mad_maxx

https://www.boards.ie/discussion/comment/119873022#Comment_119873022

Do no such thing, REITS have been an awful investment since launched in Ireland in 2014 , IRES has made almost no capital gains , they absolutely are not a proxy for the market

you might perhaps point to the dividend yield? , well institutional money looses interest in REITs pretty quick when both Gilts and U.S treasuries are paying close to 4%, REITS won’t win in a tightening environment and the sole attraction of them is income

ted1

It’s a falling market. Not a good time to invest

3DataModem

https://www.boards.ie/discussion/comment/119873677#Comment_119873677

Not ones that have not been rented. Viewed one Thursday.

Not ones that have been rented to the council. Viewed one yesterday.

A few to be found like that for sale right now, with 7% yield after management fee, agent fee, maintenance cost.

OP, do your own homework. If you are cashed up, and are prepared to lock the capital for a long time (7-10+ years) and just take the income, there are opportunities. I'd suggest factoring a 30-40% gross rent reduction over the next decade as a worst case, before factoring inflation in.

Varatha

Upon verification the EA agent confirmed that there is rent cap on D8 apartment. The tenant only left the apartment a month ago. He was renting there for only €1300!!

Varatha

While we speak, there is a nice spatious 85 sq.m 2bed 2bath in Foley Street for €340K. Would you think this will be a better option than D3 and D8 apartments?

jimmybobbyschweiz

D8 over D3 for sure as someone said it is all about location. This is subject to prudent checks on the apartment buildings etc as others have mentioned.

That Christ Church apartment will always be a south central and desirable location whereas D3 on the North Strand unfortunately does not have the same pull. It's a much more developed area around Christ church in terms of integrated social housing, long term neighbourhoods, tourism, workers, students and of course proximity to Temple Bar and Grafton Street.