Buying around Dublin, looking at future rent potential?

pablosd9

Hi folks, I'm looking for some opinions on this one,

We're quite new to Ireland and we're currently looking to buy a property in or around Dublin, and we're faced with bit of a dilemma as we're looking to best invest our money given our future plans. So we're looking to stay in Dublin for the next 5 years and then move to another country, the property we are going to buy here we will look to rent out in the future. So the choice comes down to the following two:

Option 1) Buy 1 Bed Apartment (2nd Hand) close to Dublin City, D7,D8,D16,D18 from around 210-240k
Assumptions - Easy to rent out due to demand, hard to sell in the future because it's a 1bed, could get around 1500-1700e in rent per month for a nice place, moderate increase in value over the next 15 years.

Option 2) Buy 2 Bed House (Brand New) in Kilcock Co.Kildare for around 290k
Assumptions - Rent potential 1300-1500e, we think it will be bit more difficult to rent as it's 25-30km from Dublin but it has direct train connection and is located next to the M4 so maybe ok?, low to moderate increase in value over the next 15 years due to distance from Dublin.


On paper, given potential mortgage vs potential rent income, it looks like option 1 is a better investment. But with option 2 we're buying a new (ultimately better) property that we could still make some money on in the future, and it will be a nicer place to live in over the next 5 years we're here. I guess we're worried people won't be too interested to rent or buy in Kilcock due to distance from Dublin but could be wrong.

What do you folks think? I appreciate all of the above is subject to economic factors and future government policy which could change everything.

Samuel T. Cogley

Market is currently stagnant / falling. What makes you think there is going to be an increase in value?

I think your yield calculation on what you're going to get for 210 - 240K in D7/D8 is off and rents are likely to fall.

Being a remote LL isn't a great idea.

pablosd9

Samuel T. Cogley wrote: »

Market is currently stagnant / falling. What makes you think there is going to be an increase in value?

I think your yield calculation on what you're going to get for 210 - 240K in D7/D8 is off and rents are likely to fall.

Being a remote LL isn't a great idea.

A combination of observations forms that assumption; Property markets tend to follow 10-15 year cycles, in Dublin the supply still fails to meet the demand (especially for affordable properties). I agree that the market is stagnant/falling, but it's hard to see a major negative correction given the current situation and future outlook.

I accept this may be right for D7/8 but for D18 and surrounds I think it's still a realistic yield? To gauge the situation, only 2 months ago I went to view a 1 bed property to rent in Stillorgan for 1500e, which was only ok and there was 8 people queueing to view it, some wanted to take it there and then after barely viewing it. The estate agents refuse to accept phone calls for rental properties (unless its 2k+) so the only way to register interest is by email, often you hear nothing back. Until this situation changes I think we're still in madness mode in the rental market? I've not seen anything like it anywhere.

lcwill

Go with apartment in the centre if you are thinking about renting it out in future and managing remotely. There will always be demand in the centre, few or zero vacant periods, and the management company will deal with a lot of the problems that you would have to deal with yourself if you had a house i.e. repairs to the roof etc.

Maybe it's harder to sell a one bed, but you'll get a higher yield for as long as you own it, and with more and more single people/smaller households, one bed apartments will always be in demand and there are very few of them compared to two beds.

If you are only here for a few years yourselves isn't it better to be in the centre?

You will struggle to get anything at the low end of your budget though, I think most half decent one beds close to the centre are at least 230k now.

You can buy a 2 bed apartment in d7 for less then 250k, less then 10 mins commute to city centre.
You could even buy a 2 bed house in some parts of d7 for around 250k.
There's one 2 bed apartment in d8(im not really watching the market there) for around 250k, could probably buy a 2 bed house around there for around the same.
Still only 10/15 mins to city centre.
So, there are plenty of options much closer to town then d18, which is very far out & very reliant on local multi nationals

Arklow10

D 18 is very far out? Not sure I would agree with that..
D18 is a fabulous area for rental property via capital appreciation, no voids and in my experience long term tenants (all three years plus over 27 years of renting) that usually let their friends know when they are leaving. Decent mix of large Irish employers and a huge growing number of very large multinationals who are mainly expanding (Dell,Microsoft etc). Look at the massive upmarket commercial expansion in Cherrywood, about 15 tall cranes there now building a new town in 10 years & mainly top class companies). Served by Luas. Areas within D18 include Cornelscourt, Cabinteely, Foxrock etc. Dun laoighaire-Rathdown is a wealthy council and very proactive. A two bed in this area for less than €250k - unbelievable, where??

However 5 years is too short time a time frame for any property investment - aim for 15 years plus.
Managing a property from overseas - would not do it.

Rent, save and move on..

ELM327

Particular to buy to let:
1 - Don't buy a 1 bed.
2 - Dont buy in a commuter town when you could get a slightly worse property in Dublin for similar money (eg 3 bed semi in commuter land vs 3 bed apt in dublin)
3 - as others have said, 5 years is too short a time