Dublin - Significant reduction in rents coming?

sk8board · 07-05-2021 10:04am

Cuckoo funds now spending €53m on homes here every week

https://www.independent.ie/business/personal-finance/property-mortgages/cuckoo-funds-now-spending-53m-on-homes-here-every-week-40396197.html

As a landlord, I’ve always preferred the scenario where the market becomes more professional - which helps tenants, as the professional LL will follow the letter of the law, even if we disagree on some laws at least there’s certainty for both sides.

Meanwhile the accidental LLs, negative equity LLs
and older retiring LLs are all moving out of the market, which is great for the overall market.

Just a reminder again - 66% of all registered LLs have just one property (120,000 from 165,000).

Selling property estates en masse to Funds is good for the rental market - but bad for the owner occupier market.

TSQ · 07-05-2021 11:19am

There was a piece in the Herald yesterday about a woman (in her 40s?) who is worried sick about lack of security and looking towards a future where she repeatedly has to move as she gets older (she is having to move currently because the landlord is selling). She is single (at least, that is the impression in the article), and writes about not being able to start a family and not being able to afford to buy a house. She earned and spent in her 20s, by her own admission never saving or thinking of the future. I have a friend in a similar situation, and I think, to some extent, this is a trap many singletons get into. Most working couples, couples who start a family, and especially couples who get married, tend to start budgeting and saving with the aim of buying a home. Most singletons seem more inclined to live for the moment and don't worry about the future until it is too late. When I lived in bedsitland, all the older renters were single (mostly single men in fact), so nothing much has changed. There will always be these single people who miss the property bus, through their own lack of foresight or because of low income, and who, being single, won't easily qualify for social housing. Will the transition from small landlords to professionally run rental estates actually lead to less uncertainty and more security of tenure for these renters as they age? especially as the property funds switch from buying expensive, high rent, city centre apartments to buying up suburban developments where rents will be lower and long term leases available?

Yellow_Fern · 07-05-2021 12:01pm

TSQ wrote: »

There was a piece in the Herald yesterday about a woman (in her 40s?) who is worried sick about lack of security and looking towards a future where she repeatedly has to move as she gets older (she is having to move currently because the landlord is selling). She is single (at least, that is the impression in the article), and writes about not being able to start a family and not being able to afford to buy a house. She earned and spent in her 20s, by her own admission never saving or thinking of the future. I have a friend in a similar situation, and I think, to some extent, this is a trap many singletons get into. Most working couples, couples who start a family, and especially couples who get married, tend to start budgeting and saving with the aim of buying a home. Most singletons seem more inclined to live for the moment and don't worry about the future until it is too late. When I lived in bedsitland, all the older renters were single (mostly single men in fact), so nothing much has changed. There will always be these single people who miss the property bus, through their own lack of foresight or because of low income, and who, being single, won't easily qualify for social housing. Will the transition from small landlords to professionally run rental estates actually lead to less uncertainty and more security of tenure for these renters as they age? especially as the property funds switch from buying expensive, high rent, city centre apartments to buying up suburban developments where rents will be lower and long term leases available?

It is very unpleasant to think about. Someone needs to tells these kids to invest as soon as they turn 18 even in whatever drips and drabs they can manage.

yagan · 07-05-2021 12:10pm

TSQ wrote: »

There was a piece in the Herald yesterday about a woman (in her 40s?) who is worried sick about lack of security and looking towards a future where she repeatedly has to move as she gets older (she is having to move currently because the landlord is selling). She is single (at least, that is the impression in the article), and writes about not being able to start a family and not being able to afford to buy a house. She earned and spent in her 20s, by her own admission never saving or thinking of the future. I have a friend in a similar situation, and I think, to some extent, this is a trap many singletons get into. Most working couples, couples who start a family, and especially couples who get married, tend to start budgeting and saving with the aim of buying a home. Most singletons seem more inclined to live for the moment and don't worry about the future until it is too late. When I lived in bedsitland, all the older renters were single (mostly single men in fact), so nothing much has changed. There will always be these single people who miss the property bus, through their own lack of foresight or because of low income, and who, being single, won't easily qualify for social housing. Will the transition from small landlords to professionally run rental estates actually lead to less uncertainty and more security of tenure for these renters as they age? especially as the property funds switch from buying expensive, high rent, city centre apartments to buying up suburban developments where rents will be lower and long term leases available?

It raises an interesting question about how tradition mortgage backed debt created a negative feedback loop as families got smaller, extending to the point where being single becomes the norm rather than the exception.

mrslancaster · 07-05-2021 2:31pm

Yellow_Fern wrote: »

It is very unpleasant to think about. Someone needs to tells these kids to invest as soon as they turn 18 even in whatever drips and drabs they can manage.

Something my great grandparents instilled in their kids & it came down the generations to my entire family. Most important thing was to own your home however modest it was. Holidays, cars, etc etc always came second. It was probably a hangover from their own grandparents time when people could lose their homes through eviction by absentee landlords. It is very specific to the Irish psyche & one of the reasons we have high rates of home ownership imo. I lived in a few other countries & found a different attitude to renting, even in the UK it was more common for people to rent for life.

Unfortunately anyone who wants to buy now faces major difficulties and competition from AHB's, councils & cuckoo funds. Renting for life sounds like a really bad idea to me because I think as people get older or lose work or become ill then the reality of renting for the rest of your life hits home.
Paying a mortgage for 25 years may be a better option if at all possible even if it's for a property farther away from your preferred area or current job. Over time jobs change, public transport improves, salaries increase & repayments become easier.
If you can buy, you will not lose your home e.g. Renters are vulnerable when a landlord sells up or hikes the rent up or the council suddenly changes the rules & your 3 bed family home no longer suits as your kids have flown the nest. Renting & freedom to move around is great in your 20's but not the uncertainty & ever increasing monthly outgoings as we get older. Just my two cents.

mrslancaster · 07-05-2021 2:48pm

Private renters facing difficulties or homelessness in future due to getting older & reduced income is something nobody in government seems to be thinking about let alone planning for. For example, if a
30/40 year old is paying high monthly rent now, how much will they be able to afford when they retire if they have to rely on the state pension? Will their current landlord even be still around? How many times will they have moved by then etc etc
it's something that needs to be discussed.

Amadan Dubh · 07-05-2021 3:48pm

mrslancaster wrote: »

Private renters facing difficulties or homelessness in future due to getting older & reduced income is something nobody in government seems to be thinking about let alone planning for. For example, if a
30/40 year old is paying high monthly rent now, how much will they be able to afford when they retire if they have to rely on the state pension? Will their current landlord even be still around? How many times will they have moved by then etc etc
it's something that needs to be discussed.

Hole them up in the co-living blocks when they're old. That is the long term plan of FFG!

C14N · 07-05-2021 5:23pm

mrslancaster wrote: »

Unfortunately anyone who wants to buy now faces major difficulties and competition from AHB's, councils & cuckoo funds. Renting for life sounds like a really bad idea to me because I think as people get older or lose work or become ill then the reality of renting for the rest of your life hits home.
Paying a mortgage for 25 years may be a better option if at all possible even if it's for a property farther away from your preferred area or current job. Over time jobs change, public transport improves, salaries increase & repayments become easier.
If you can buy, you will not lose your home e.g. Renters are vulnerable when a landlord sells up or hikes the rent up or the council suddenly changes the rules & your 3 bed family home no longer suits as your kids have flown the nest. Renting & freedom to move around is great in your 20's but not the uncertainty & ever increasing monthly outgoings as we get older. Just my two cents.

The attitude to homeowning in Ireland is a mixture of being rational and irrational imo. It's rational in the sense that our own market is setup in a way where renting for life really just isn't very viable. It's much cheaper to buy than rent, all else being equal, and it's a major asset to have. In addition, trying to pay for our high rates of rent on a pension is something that is extremely difficult.

It's irrational in the sense that we and our politicians seem to be unable to envision a society where this is not the case, even though as you say, renting for life is something that is already done far more successfully in other countries and is completely feasible there. I also think we have some other irrationalities, like a sort of ingrained bias toward paying off mortgages early, even when it's not really a financially smart move (since the money used to pay off earlier could usually be used more effectively elsewhere), because people fear any debt.

I don't think it's a great tradeoff though. Moving further away from your work and social life has many negative outcomes. Research has shown that longer commutes, especially by car, have significant negative impacts on stress and mental wellbeing. It's true jobs may change and public transport may improve, but in general new jobs and public transport will all be concentrated in urban areas which are the things you often have to move away from to be able to buy property.

It's also not fully correct to say buying means you'll never lose your home. Or at least, not until the mortgage is paid off, which even on a short mortgage, is often 20-25 years. It's not likely, but you can still be evicted from your house if you fall on bad times. Another risk is that your home may lose value and make it harder to move, which as we saw in the last economic crash, was a real problem for many people. It's bad enough to lose employment, but it's even worse if you can't leave to look for it abroad, or elsewhere in the country, because you can't sell your house. If you buy a house in a place that becomes less in demand, you may end up saddled with it and be unable to sell, even if you want to move elsewhere to chase a job or opportunities. That's one of my personal biggest fears as a person looking to buy for the first time on a budget now.

And for single people (like mentioned in the article above), buying is sadly just not really feasible for most unless you have a very well-paying job. Even on a good salary of maybe €60k per year, your limit on what you can buy is just a €210k without an exception, and that doesn't go far in today's market even if you do save up the deposit for it.

sk8board · 07-05-2021 8:57pm

TSQ wrote: »

Will the transition from small landlords to professionally run rental estates actually lead to less uncertainty and more security of tenure for these renters as they age? especially as the property funds switch from buying expensive, high rent, city centre apartments to buying up suburban developments where rents will be lower and long term leases available?

Well they’ll have certainty that things like an accidental LL moving back in themselves wouldn’t happen, and the maintenance would get done etc etc.

Where the Irish system falls down is that we have no legal facility for a lifetime renter. This is mainly because the level of accidental landlords here means that most of those properties will exit the market eventually, either selling the house or moving back in.

Europe is full of countries with lifelong leases, index linked to inflation, in professional landlord markets.

Imagine the Gov went to the Fund who bought that estate last week and told them they’d rent it all from them, on lifetime leases for specific tenants, index linked to inflation.

fixed income Pension Fund buyers would bite your hand off.

Yyhhuuu · 09-05-2021 12:49pm

sk8board wrote: »

Well they’ll have certainty that things like an accidental LL moving back in themselves wouldn’t happen, and the maintenance would get done etc etc.

Where the Irish system falls down is that we have no legal facility for a lifetime renter. This is mainly because the level of accidental landlords here means that most of those properties will exit the market eventually, either selling the house or moving back in.

Europe is full of countries with lifelong leases, index linked to inflation, in professional landlord markets.

Imagine the Gov went to the Fund who bought that estate last week and told them they’d rent it all from them, on lifetime leases for specific tenants, index linked to inflation.

fixed income Pension Fund buyers would bite your hand off.

Housing bodies ( I.e. the government) are already buying large amounts of houses in new private housing estates.

Ray Palmer · 10-05-2021 5:03pm

C14N wrote: »

The attitude to homeowning in Ireland is a mixture of being rational and irrational imo. It's rational in the sense that our own market is setup in a way where renting for life really just isn't very viable. It's much cheaper to buy than rent, all else being equal, and it's a major asset to have. In addition, trying to pay for our high rates of rent on a pension is something that is extremely difficult.

It's irrational in the sense that we and our politicians seem to be unable to envision a society where this is not the case, even though as you say, renting for life is something that is already done far more successfully in other countries and is completely feasible there. I also think we have some other irrationalities, like a sort of ingrained bias toward paying off mortgages early, even when it's not really a financially smart move (since the money used to pay off earlier could usually be used more effectively elsewhere), because people fear any debt.

I don't think it's a great tradeoff though. Moving further away from your work and social life has many negative outcomes. Research has shown that longer commutes, especially by car, have significant negative impacts on stress and mental wellbeing. It's true jobs may change and public transport may improve, but in general new jobs and public transport will all be concentrated in urban areas which are the things you often have to move away from to be able to buy property.

It's also not fully correct to say buying means you'll never lose your home. Or at least, not until the mortgage is paid off, which even on a short mortgage, is often 20-25 years. It's not likely, but you can still be evicted from your house if you fall on bad times. Another risk is that your home may lose value and make it harder to move, which as we saw in the last economic crash, was a real problem for many people. It's bad enough to lose employment, but it's even worse if you can't leave to look for it abroad, or elsewhere in the country, because you can't sell your house. If you buy a house in a place that becomes less in demand, you may end up saddled with it and be unable to sell, even if you want to move elsewhere to chase a job or opportunities. That's one of my personal biggest fears as a person looking to buy for the first time on a budget now.

And for single people (like mentioned in the article above), buying is sadly just not really feasible for most unless you have a very well-paying job. Even on a good salary of maybe €60k per year, your limit on what you can buy is just a €210k without an exception, and that doesn't go far in today's market even if you do save up the deposit for it.

This is where many people in Ireland don't pay attention to history and the consequences.

The reason other countries have good social housing is because they started in a place we didn't.WW I and II destroyed huge amounts of housing and killed many property owners and a portion of the population. I think in total Ireland had 4 bombs dropped on it in this time. One such drop destroyed a large section of North Strand in Dublin. That site became social housing.
Other countries were mostly destroyed. When reparations and economic plans were made. That included social housing at incredibly cheap prices and cheap long term investment. They didn't sell these properties and the funds allowed for more social housing to match the economy and growth.

The jesuits built our first social housing estates as they didn't like the government plans for "shared hallways". The government have sold the social housing stick and not invested further.

Do not blame the government because the public wanted to be able to buy these properties and it is very popular to this day.

If you suggest a OAP be moved out of a 3 bed council house and make room for a family people go crazy saying that is unfair. The children often buy the property due to the right to buy and make a profit.

Easy to blame the government but reality is they have never stood up properly against public views for the greater good. The vaguely tried with pension reductions and people went crazy. The majority of private landlords are pensioners. There is no joined up thinking on public opinion

10-05-2021 8:45pm

Amadan Dubh wrote: »

Hole them up in the co-living blocks when they're old. That is the long term plan of FFG!

And what's wrong with that as long it is affordable and of a decent standard?

Amadan Dubh · 10-05-2021 10:48pm

salonfire wrote: »

And what's wrong with that as long it is affordable and of a decent standard?

True, they'd be able to sit around the common room watching RTE and telling stories together, could get into the gym there, ride each other, cook stew and bake bread for each other; would be ideal for retiring.

Claw Hammer · 12-05-2021 2:25pm

The latest survey data seems to be that rents are rising again in Dublin. that is extraordinary given that the country was in lock down for that quarter. What will it be like when things open up and students return?

Jmc25 · 12-05-2021 5:39pm

Claw Hammer wrote: »

The latest survey data seems to be that rents are rising again in Dublin. that is extraordinary given that the country was in lock down for that quarter. What will it be like when things open up and students return?

It's very surprising and actually at odds with my own experience a couple of months ago in Dublin. I was looking mainly close to but not actually in the city centre. I looked at a couple of places a bit further out and there did seem to be more demand for those though, but hardly enough to push rents up even further, so quite surprised by this.

I should say though - I was offered a reduction on the asking rent on a few places. Most of them were then taken of Daft a few weeks later without the reduction which was offered to me being reflected in the asking rent.

JimmyVik · 13-05-2021 8:23am

Jmc25 wrote: »

It's very surprising and actually at odds with my own experience a couple of months ago in Dublin. I was looking mainly close to but not actually in the city centre. I looked at a couple of places a bit further out and there did seem to be more demand for those though, but hardly enough to push rents up even further, so quite surprised by this.

I should say though - I was offered a reduction on the asking rent on a few places. Most of them were then taken of Daft a few weeks later without the reduction which was offered to me being reflected in the asking rent.

At one point last year I decided to try and take advantage of the exodus from the city center and get a cheaper rent there.
I contacted so many agents and landlords and they were all 6 month leases.
Of the ones that engaged with me it was clear that they were prepared to wait it out for the pandemic to end if they didnt get the rent they were asking at the time.
At this point I think they will all be waiting until October 2021 before they start filling those places.

Browney7 · 13-05-2021 1:46pm

https://raycooke.ie/property/ballyfermot-drive-ballyfermot-dublin-10/

The rental market in Ballyfermot is strong! 2k per month for a two bed. No doubt it must be a palace inside since it's recently refurbished.

selassie · 13-05-2021 1:55pm

Browney7 wrote: »

https://raycooke.ie/property/ballyfermot-drive-ballyfermot-dublin-10/

The rental market in Ballyfermot is strong! 2k per month for a two bed. No doubt it must be a palace inside since it's recently refurbished.

3 people per bedroom and 3 in the living room at 400 a month each could get ya 3600 a month, landlord underselling it.

Phat Cat · 14-05-2021 9:16pm

Browney7 wrote: »

https://raycooke.ie/property/ballyfermot-drive-ballyfermot-dublin-10/

The rental market in Ballyfermot is strong! 2k per month for a two bed. No doubt it must be a palace inside since it's recently refurbished.

A quick Google search revels that house was bought for €250k earlier this year.

https://www.myhome.ie/residential/brochure/40-ballyfermot-drive-ballyfermot-dublin-10/4477869

They'd have a better chance knitting fog then getting €2k per month for that

Emma2019 · 15-05-2021 5:17pm

Weirdly doesn't seem to be on the PPR yet.

Unless theres something specificly wrong with that particular house I'd assume it went for 20k+ over asking based on houses in good nick nearby going for 40k+ over asking since about Nov 2020.

dalyboy · 15-05-2021 5:30pm

What with WFH becoming the possible long term norm who in their right mind will pay €2000 per month for a one bed apartment in Dublin ?

You can head to Navan or Dundalk etc and pay one third of that rip off asking price.

15-05-2021 8:52pm

dalyboy wrote: »

What with WFH becoming the possible long term norm who in their right mind will pay €2000 per month for a one bed apartment in Dublin ?

You can head to Navan or Dundalk etc and pay one third of that rip off asking price.

Many people want to live in Dublin, over Dundalk or Navan, for reasons other than work.....

dalyboy · 15-05-2021 11:10pm

Deleted User wrote: »

Many people want to live in Dublin, over Dundalk or Navan, for reasons other than work.....

If the average salary is netting €2500 per month and Dublin rent is €2000 per month (approaching approx for a 1 bed) that leaves €500 per month for bills, entertainment, savings and food etc.

They can want all they want tbh. That’s not a sustainable situation by a long stretch.

Ozark707 · 15-05-2021 11:16pm

dalyboy wrote: »

If the average salary is netting €2500 per month and Dublin rent is €2000 per month (approaching approx for a 1 bed) that leaves €500 per month for bills, entertainment, savings and food etc.

They can want all they want tbh. That’s not a sustainable situation by a long stretch.

For a 1 bed? Maybe a two bed?

PommieBast · 16-05-2021 1:14am

Ozark707 wrote: »

For a 1 bed? Maybe a two bed?

I'm paying 1800 for a 1-bed. I'm also out of the country once I have some loose ends tied up.

AlphabetCards · 16-05-2021 1:17am

PommieBast wrote: »

I'm paying 1800 for a 1-bed. I'm also out of the country once I have some loose ends tied up.

Do it. I couldn't bring myself to move home a few years ago because of it. I got a 5 bed with a huge garden here in the UK for £1000 a month with a gardener turning up weekly thrown in. Don't buy in to the Dublin rent farce if you can move.

Antho12 · 16-05-2021 6:54am

Deleted User wrote: »

Many people want to live in Dublin, over Dundalk or Navan, for reasons other than work.....

Finally someone mentioning this on here! People who rent in Dublin city are not always doing so because of work, most of them actually do want to live in Dublin.

dalyboy · 16-05-2021 8:40am

Ozark707 wrote: »

For a 1 bed? Maybe a two bed?

I’ve seen numerous examples of 1 bed apartments in the city for 2k plus per month.

Speaking only on 1 beds, in swords area and north co Dublin the rent can be €1800 approx. South side suburbs at least 2k per month.

dalyboy · 16-05-2021 8:51am

AlphabetCards wrote: »

Do it. I couldn't bring myself to move home a few years ago because of it. I got a 5 bed with a huge garden here in the UK for £1000 a month with a gardener turning up weekly thrown in. Don't buy in to the Dublin rent farce if you can move.

Couldn’t agree more.

A mate of mine (sadly split with his wife last year) was left to witness the horror of the prospect of renting in Dublin.

He went to see one property in Druncondra (1 bed apt) for €1500 pm. 450sft. The queue was down the street. He packed his bag , got on a plane to Malaga and hasn’t looked back. He’s paying €475 pm for a 3 bed penthouse near a marina.

The contrast is extraordinary for what you get here and elsewhere in both quality and price. Ireland clearly displays massive disfunction at fundamental level.

Thespoofer · 16-05-2021 8:56am

dalyboy wrote: »

Couldn’t agree more.

A mate of mine (sadly split with his wife last year) was left to witness the horror of the prospect of renting in Dublin.

He went to see one property in Druncondra (1 bed apt) for €1500 pm. 450sft. The queue was down the street. He packed his bag , got on a plane to Malaga and hasn’t looked back. He’s paying €475 pm for a 3 bed penthouse near a marina.

The contrast is extraordinary for what you get here and elsewhere in both quality and price. Ireland clearly displays massive disfunction at fundamental level.

Good for him.

yagan · 16-05-2021 10:44am

Antho12 wrote: »

Finally someone mentioning this on here! People who rent in Dublin city are not always doing so because of work, most of them actually do want to live in Dublin.

I moved to Dublin to perfect the fake Canada goose jacket look and to join an electric scooter gang. Off to Howth junction after a cuppa.

IngazZagni · 16-05-2021 12:16pm

dalyboy wrote: »

Couldn’t agree more.

A mate of mine (sadly split with his wife last year) was left to witness the horror of the prospect of renting in Dublin.

He went to see one property in Druncondra (1 bed apt) for €1500 pm. 450sft. The queue was down the street. He packed his bag , got on a plane to Malaga and hasn’t looked back. He’s paying €475 pm for a 3 bed penthouse near a marina.

The contrast is extraordinary for what you get here and elsewhere in both quality and price. Ireland clearly displays massive disfunction at fundamental level.

This is true but there is one key difference. The salaries. The average take home pay per month in Malaga is €1,295. That's about €300 less than the PUP here.
If of course you can get get a good salary then of course that's great. Perhaps the overall lifestyle will make money less important to you as well. Also note that rental prices are much lower currently in Malaga due to a lack of tourists.

dalyboy · 16-05-2021 12:33pm

IngazZagni wrote: »

This is true but there is one key difference. The salaries. The average take home pay per month in Malaga is €1,295. That's about €300 less than the PUP here.
If of course you can get get a good salary then of course that's great. Perhaps the overall lifestyle will make money less important to you as well. Also note that rental prices are much lower currently in Malaga due to a lack of tourists.

A persons circumstances absolutely do come into making a decision to either stay in Dublin and get fleeced on rent or search options abroad.

In my friends case the variables were stacked in favour of going to Spain. He’s suffered no financial loss in the move at all. Only gained.

-No kids
-Has an online business not tied geographically to operate
-easily return to Ireland short stays with numerous cheap flights.
-healthy
-young
-adventurist seeking
-no elderly family to worry about
-etc etc

He had a 1 year long lease agreement with the landlord so not subject to tourism price fluctuations and just signed a 24 month agreement last week (same place)

yagan · 16-05-2021 1:05pm

Work is the key. I left Dublin in the 90s for a job down the country and had an excellent time, quality of life was multiple times better, then went abroad for the last decade for career and travel opportunity and am only back in Dublin now for a foothold job, transfer out of Dublin in motion.

It was depressing to see we've got a contrived distorted market again, but at least the old duopoly of landlord parties have had to prop eachother up just to stay in power. It feels like a political culture change is inevitable.

John1648 · 16-05-2021 1:33pm

Dear Board.ie contributors, here comes a kind request to you to critique such a small investment idea:

I am a cash buyer, looking at buying a property in Dublin for letting purposes. I am looking at the lower end of the budget properties, which seem to me to produce a better yield.

The calculation is like this: 1300 EUR monthly rent, purchase price - 180 000 EUR.

I am currently looking at an apartment in Citywest area (Carrigmore Crescent), 2 mins from LUAS, next to the shopping centre, 1-bedroom, 42 sqm, in pretty good shape, furnished.

Would such rents be realistic, for these apartments? Would it be easy to find tenants in the current market?

Would it too be risky, in the sense that these apartments risk to sit empty in the event of a recession?
I currently reside abroad, so would not pay the PRSI.

My calculations would go like this:

Apartment Rented for 1300 a month.

Rental Income per year 15600.

Expenses:

Mgmt Charges 1050
Letting and property management fees: 1550
Tax advisory costs: 250

Total allowed deductible expenses 2850.
Local property tax: 250
Income: 12750

Income Tax at 20pc (minus the allowance of 1650) is 900; PRSI 0 pc; , USC 0.5 pc is 80

Overall Profit: 15600-1050-250-1550-250-900-80 is 11770.

Does it make sense?

Many thanks!

John

Phat Cat · 16-05-2021 2:52pm

Ozark707 wrote: »

For a 1 bed? Maybe a two bed?

Decent one beds are around €1800 in Dublin now. Anything less then that are usually older builds or converted houses, mostly with low BER ratings and/or in less derisible areas.

It's getting dangerously close to costing the same to rent here as it is in London, which in crazy considering London is pretty much a megacity, like New York, where high salaries go hand in hand with high rents. In comparisons, unless you are an IT contractor with one of the big multinationals, then the average rent prices here are extremely skewed compared to the average salaries.

selassie · 16-05-2021 3:20pm

Phat Cat wrote: »

Decent one beds are around €1800 in Dublin now. Anything less then that are usually older builds or converted houses, mostly with low BER ratings and/or in less derisible areas.

It's getting dangerously close to costing the same to rent here as it is in London, which in crazy considering London is pretty much a megacity, like New York, where high salaries go hand in hand with high rents. In comparisons, unless you are an IT contractor with one of the big multinationals, then the average rent prices here are extremely skewed compared to the average salaries.

nearly 2/3rds of households on under 65k a year. Government inflated rental market to keep property prices high.

pockets3d · 16-05-2021 3:24pm

John1648 wrote: »

Dear Board.ie contributors, here comes a kind request to you to critique such a small investment idea:

I am a cash buyer, looking at buying a property in Dublin for letting purposes. I am looking at the lower end of the budget properties, which seem to me to produce a better yield.

The calculation is like this: 1300 EUR monthly rent, purchase price - 180 000 EUR.

I am currently looking at an apartment in Citywest area (Carrigmore Crescent), 2 mins from LUAS, next to the shopping centre, 1-bedroom, 42 sqm, in pretty good shape, furnished.

Would such rents be realistic, for these apartments? Would it be easy to find tenants in the current market?

Would it too be risky, in the sense that these apartments risk to sit empty in the event of a recession?
I currently reside abroad, so would not pay the PRSI.

My calculations would go like this:

Apartment Rented for 1300 a month.

Rental Income per year 15600.

Expenses:

Mgmt Charges 1050
Letting and property management fees: 1550
Tax advisory costs: 250

Total allowed deductible expenses 2850.
Local property tax: 250
Income: 12750

Income Tax at 20pc (minus the allowance of 1650) is 900; PRSI 0 pc; , USC 0.5 pc is 80

Overall Profit: 15600-1050-250-1550-250-900-80 is 11770.

Does it make sense?

Many thanks!

John

I'm choking on my own rage here

16-05-2021 3:26pm

pockets3d wrote: »

I'm choking on my own rage here

I was replying, and then I thought better of it

pockets3d · 16-05-2021 3:29pm

Deleted User wrote: »

I was replying, and then I thought better of it

Dear people of Ireland,

As a wealthy foreigner I want to make some money on your misery.
Can you check my sums?

16-05-2021 3:56pm

pockets3d wrote: »

Dear people of Ireland,

As a wealthy foreigner I want to make some money on your misery.
Can you check my sums?

Eh, get over yourself. If you don’t want large investment companies buying up developments and you don’t want single unit BTL investors, who do you think is going to provide the rental units needed?

pockets3d · 16-05-2021 4:09pm

Dav010 wrote: »

Eh, get over yourself. If you don’t want large investment companies buying up developments and you don’t want single unit BTL investors, who do you think is going to provide the rental units needed?

Our benevolent TDs

16-05-2021 4:12pm

pockets3d wrote: »

Our benevolent TDs

Investor wants to buy single unit for rent, what’s the issue?

PommieBast · 16-05-2021 4:52pm

AlphabetCards wrote: »

Do it. I couldn't bring myself to move home a few years ago because of it. I got a 5 bed with a huge garden here in the UK for £1000 a month with a gardener turning up weekly thrown in. Don't buy in to the Dublin rent farce if you can move.

For me personally it is the combination of the dysfunctional market coupled with the harshest lockdown in Europe that has turned Dublin into a broken dream. Concluded I was better off clearing the deck and starting over from scratch. Handed in notice last week.

dalyboy wrote: »

The contrast is extraordinary for what you get here and elsewhere in both quality and price. Ireland clearly displays massive disfunction at fundamental level.

There's the third factor: How EAs treat people. After doing some viewings in the UK last summer how things are done back here in Ireland seems like the Muscat Mutrah Souq bazaar. Not somewhere would want to hand over half a million quid.

Phat Cat · 16-05-2021 5:05pm

PommieBast wrote: »

There's the third factor: How EAs treat people. After doing some viewings in the UK last summer how things are done back here in Ireland seems like the Muscat Mutrah Souq bazaar. Not somewhere would want to hand over half a million quid.

+1

Estate agents are up there with recruiters and used car sales people, they are definitely part of the overall problem too.

16-05-2021 5:16pm

Having lived, and bought properties in the UK, I wouldn’t hold them up as being more virtuous by any stretch. They are just as eager to please sellers and push prices up, which of course is what you want as a seller.

The last apartment I sold there, I only found out afterwards that the EA I paid to sell the property, also arranged finance for the buyer.

PommieBast · 16-05-2021 10:02pm

Dav010 wrote: »

Having lived, and bought properties in the UK, I wouldn’t hold them up as being more virtuous by any stretch. They are just as eager to please sellers and push prices up, which of course is what you want as a seller.

Certainly not more virtuous but they are at least more pleasant to deal with, such as not being treated like cattle at viewings. The UK also has duty of disclosure regulations which I think would cause a good portion of Irish EAs to be declared unfit to practice.

Donald Trump · 16-05-2021 11:08pm

John1648 wrote: »

Dear Board.ie contributors, here comes a kind request to you to critique such a small investment idea:

I am a cash buyer, looking at buying a property in Dublin for letting purposes. I am looking at the lower end of the budget properties, which seem to me to produce a better yield.

The calculation is like this: 1300 EUR monthly rent, purchase price - 180 000 EUR.

I am currently looking at an apartment in Citywest area (Carrigmore Crescent), 2 mins from LUAS, next to the shopping centre, 1-bedroom, 42 sqm, in pretty good shape, furnished.

Would such rents be realistic, for these apartments? Would it be easy to find tenants in the current market?

Would it too be risky, in the sense that these apartments risk to sit empty in the event of a recession?
I currently reside abroad, so would not pay the PRSI.

My calculations would go like this:

Apartment Rented for 1300 a month.

Rental Income per year 15600.

Expenses:

Mgmt Charges 1050
Letting and property management fees: 1550
Tax advisory costs: 250

Total allowed deductible expenses 2850.
Local property tax: 250
Income: 12750

Income Tax at 20pc (minus the allowance of 1650) is 900; PRSI 0 pc; , USC 0.5 pc is 80

Overall Profit: 15600-1050-250-1550-250-900-80 is 11770.

Does it make sense?

Many thanks!

John

I think there are different tax rules for rental income for non-resident landlords. I could be wrong. I don't think you'll get those tax credits and also get away with the PRSI.

Either way, you likely are supposed to declare that income whether you reside. If there is a double taxation treaty, you would be able to deduct the tax paid in one jurisdiction from your liability in the other. You might of course be living somewhere with no income tax

agoodpunt · 17-05-2021 11:41am

pockets3d wrote: »

I'm choking on my own rage here

Sarcasism asside, the risks, future value and refurbishment/replacements after wear and tear.
uncertain future restrictions and regs in the market are enough already to make BTL a no go area ok for cockoos deep pockets and no taxes on rental.
Trend is to exit anyway taxes are the same even if non resident

houseyhouse · 17-05-2021 3:40pm

John1648 wrote: »

Dear Board.ie contributors, here comes a kind request to you to critique such a small investment idea:

I am a cash buyer, looking at buying a property in Dublin for letting purposes. I am looking at the lower end of the budget properties, which seem to me to produce a better yield.

The calculation is like this: 1300 EUR monthly rent, purchase price - 180 000 EUR.

I am currently looking at an apartment in Citywest area (Carrigmore Crescent), 2 mins from LUAS, next to the shopping centre, 1-bedroom, 42 sqm, in pretty good shape, furnished.

Would such rents be realistic, for these apartments? Would it be easy to find tenants in the current market?

Would it too be risky, in the sense that these apartments risk to sit empty in the event of a recession?
I currently reside abroad, so would not pay the PRSI.

My calculations would go like this:

Apartment Rented for 1300 a month.

Rental Income per year 15600.

Expenses:

Mgmt Charges 1050
Letting and property management fees: 1550
Tax advisory costs: 250

Total allowed deductible expenses 2850.
Local property tax: 250
Income: 12750

Income Tax at 20pc (minus the allowance of 1650) is 900; PRSI 0 pc; , USC 0.5 pc is 80

Overall Profit: 15600-1050-250-1550-250-900-80 is 11770.

Does it make sense?

Many thanks!

John

This is the kind of back-of-the envelope calculation that makes people think landlords are raking it in hand over fist.

What about repairs and maintenance? The cost of replacing furniture/appliances every few years? The cost of cleaning and repainting between tenants? Annual chimney cleaning and boiler servicing? Insurance (a legal requirement for landlords)? RTB registration fees?

You also should not assume 100% occupancy. The advice is to assume 11 months of occupancy per year to leave time for cleaning/repainting/repairs between tenants as well as time to find a new tenant.

And I don't think non-resident landlords are entitled to tax credits. You would likely be taxed at 42% on all income and probably have to pay USC, though I am not sure on that at all.

I rent out an apartment for a similar amount and most years it about breaks even. We do have a small mortgage on it that costs 5-6k per year but most of that is tax deductible. We pay under 2k off the capital each year. That's the 'income' that we get from it. Some years there are more repair/repainting/replacement costs and it loses money. Others there are fewer costs and it makes a small profit. And that's with us doing a lot of the smaller maintenance jobs ourselves, which you won't be able to do from abroad.

Dublin - Significant reduction in rents coming?

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