investment

dar100

looking at investing in a house, what are peoples thoughts on houses as investment in dublin 1? thete would be 3 or 4 at minute in my price range, 250-300? in regards to yields, ?

DubCount

Making an investment of that scale is a really big step. I would strongly recommend consulting an independent investment advisor to see if property investment is right for you, or whether there are better options for you to consider (e.g. pension scheme or investing in REITs etc.).

Personally, I think it is hard to encourage investing in a single property. It loads significant risk in one asset, and if you have problems either with tenants or structural problems etc., having all your eggs in one basket is a problem. Also, I think the market is already near the top, so limited capital gains to be had.

I know it will bring the wrath of other posters here, but if I did buy a property in Dublin 1/2, I would be doing short term rentals (e.g. AirBnB) in stead of long term rental to increase returns and reduce risk.

The_Conductor

Based purely as an investment- it makes no sense whatsoever.
Perhaps if you bought units in a REIT- you could get the exposure you're looking for- but you won't get heady returns (then again, you also won't get the risk).
Alternatively- how about forestry fund units or something (added benefit is that they're tax free).

I'm not aware of anyone buying a single property as an investment at the moment- though I could introduce you to a long and varied list of people who are getting out of the sector.

ted1

The_Conductor wrote: »

Based purely as an investment- it makes no sense whatsoever.
Perhaps if you bought units in a REIT- you could get the exposure you're looking for- but you won't get heady returns (then again, you also won't get the risk).
Alternatively- how about forestry fund units or something (added benefit is that they're tax free).

I'm not aware of anyone buying a single property as an investment at the moment- though I could introduce you to a long and varied list of people who are getting out of the sector.

Aren’t a lot getting out because of appreciation. E.g Buy in 2012 for 200 , sell now for 500, after CGT you’ve double your 200

cronos

ted1 wrote: »

Aren’t a lot getting out because of appreciation. E.g Buy in 2012 for 200 , sell now for 500, after CGT you’ve double your 200

I think people don't realize that the prices were that low then because no one was buying. Thus there are not that many people in that position.

ted1

cronos wrote: »

ted1 wrote: »

Aren’t a lot getting out because of appreciation. E.g Buy in 2012 for 200 , sell now for 500, after CGT you’ve double your 200

I think people don't realize that the prices were that low then because no one was buying. Thus there are not that many people in that position.

You’d be surprised.

Graham

ted1 wrote: »

You’d be surprised.

I certainly would be surprised.

If I'm reading the stamp-duty events correctly there were only something like 7000 non-occupier property sales in 2012 out of a pitiful 30,000 total sales.

ted1

Graham wrote: »

ted1 wrote: »

You’d be surprised.

I certainly would be surprised.

If I'm reading the stamp-duty events correctly there were only something like 7000 non-occupier property sales in 2012 out of a pitiful 30,000 total sales.

That’s 23% if declared properly.

Graham

ted1 wrote: »

That’s 23% if declared properly.

7000 homes, not many.

For perspective:

The number of properties available to rent in the first four months of 2018 was just 3,200, below both the previous two years (3,800 and 3,900) and well below the 16,000 in 2012.

Those sort of drops suggest there's more going on than a few investors cashing out.

DubCount

ted1 wrote: »

Aren’t a lot getting out because of appreciation. E.g Buy in 2012 for 200 , sell now for 500, after CGT you’ve double your 200

There may be some people recognising gains. However, I think most investors are more interested in the future than the past. The potential for future growth and the view on future income vs risk are what determines what most investors do. The future potential returns are what are driving Landlords away. Most don't believe there is much room for future capital growth (at least for the next few years), and rent controls, pro-tenant legislation and high taxes make future income vs risk a difficult way to make money. Many leaving the market are just about out of negative equity, and they are not leaving with massive capital gains.

4ensic15

Dublin 1 is a very dodgy area. It can be difficult to get insurance on a house. I know a guy who had a house in Dublin 1. He had to pay protection money to the next door neighbour to keep him from burning the house. The tenant calibre is very low as well. Respectable people will not live in many of the houses in Dublin 1. Unless you are very well connected in the area keep out of it.
As for forestry, I bought forestry share some years ago. They are completely illiquid, despite what I was promised. Effectively, I now have to wait for the trees to grow before I can cash out.

The_Conductor

DubCount wrote: »

There may be some people recognising gains. However, I think most investors are more interested in the future than the past. The potential for future growth and the view on future income vs risk are what determines what most investors do. The future potential returns are what are driving Landlords away. Most don't believe there is much room for future capital growth (at least for the next few years), and rent controls, pro-tenant legislation and high taxes make future income vs risk a difficult way to make money. Many leaving the market are just about out of negative equity, and they are not leaving with massive capital gains.

Even landlords selling up- are encountering issues.
Of all the complaints to the RTB about landlords using sale of the property as a spurious reason to end a tenancy- less than 1-in-10 of complaints are currently being upheld by the RTB. Of the properties sold- the fact that its rent controlled mean its only of interest to an owner occupier- and on average is worth up to 20% less than a non-rental property to a prospective purchaser (variety of reasons- including the fact that non-rental properties tend to have been kept in better condition- and rental properties have their own list of issues- such as electricity meters etc- which are a turn-off for prospective purchasers, despite being easily removed).

Other than the OP- I don't think I have heard of anyone actively considering residential property as an investment opportunity in the last year- its just not happening- but its the regulatory regime that is turning people off- more so than taxation or any other single reason............

Once all the housing associations are fully incorporated back into local authorities- to satisfy the EU judgement- its going to change the manner in which holdings of rental property are structured (and its also going to remove a few thousand landlords from the RTB's database in one foul swoop- which they're going to have an interesting time explaining- seeing as they only added them in in 2016- as an excuse to show that landlords were not leaving the sector).

All-in-all- the absolute number of units in the rental sector- is climbing- under 2 headings- REITs and Housing Association/LA holdings- which is what Threshold and tenant advocacy groups have been screaming for. Well- guess what- you're getting it............. Only issue is- demand is continuing to vastly increase at a much faster pace than supply- so we're running to stand still- and only managing a one-step-forward-two-steps-back exercise...........