I don't know why people are still looking at residential property with all the anti-landlord controls brought in.
Is it now not possible to make money on a property investment with the new measures in place do you think or is it that profit margins are smaller?
Very often tenants don't pay up,
very often damage is done to property,
very often a place can be left vacant,
insurance has to be paid,
management fees sometimes,
it costs money to keep property up to a good standard
In my fairly extensive experience tenants not paying is rare, though late payment by a few days is common enough. The best way to avoid tenants not paying or paying late is getting tenants who can afford the rent. The best way to identify tenants who can afford the rent is to ask for a substantial deposit and at least one months rent all in advance.
Minor damage is certainly common, damage with any significant cost is rare. Again a substantial deposit helps.
Not in todays market or any reasonably likely medium term.
Certainly and you should get some quotes long before you decide to become a landlord.
People often underestimate the significance of these. In my opinion the management fee should be discounted at a rate of 2% and added to the price of the property when doing your sums. For example comparing a property at €200k with no management fee to a property at €200k with a €1,000 per annum management fee. The €1,000 discounted at 2% is €50,000 so really the property is costing you the equivalent of €250k.
In fairness if the property starts off good, keeping it that way is not too difficult. You can develop a skill in looking out for high maintenance things and eliminating them.
Good for you and I hope it lasts. However, as a one off investment, with borrowing, I personally would not advise the poster to invest. If he was adding to an existing portfolio and had plenty of experience that opinion might be different. I'm sure you're well aware of the rather large number of so called landlords who are desperately trying to get out of the market. On top of that, the people renting out houses outside of Dublin would be in an even worse situation. Then again, "Doctors differ and patients die".
Good for you and I hope it lasts. However, as a one off investment, with borrowing, I personally would not advise the poster to invest.
sorry cremeegg , for the slow on the uptake , can you explain again what you mean by 50 k extra on a property with management fees or a discount of 2% , its the formula im having trouble with
Cons of property investment in the current market -
Rent controls make it harder to get better returns (mitigate by buying carefully either by getting one that can be rented at current market value or one that is cheaper because the low existing rent has devalued the property and while u can't charge much more you are getting the property cheaper?)
Non payment of rent or vacancy issues- does the current climate not make these less likely?
Interestingly from what I've read here it would seem a lot of landlords want out because they were undercharging rent to keep good tenants which suggests that bad tenants who wreck the property are, as cremeggs experience suggests not that common and not contributing to the mass exodus of landlords from the sector.
The figures suggested by cremeegg are roughly what I'd been considering and 200k would get me a 2 bed apt near here. I guess with a 60k deposit I figured it would have to drop considerably in value to reach negative equity. I acknowledge the point of course that as a first time investor my inexperience makes it a higher risk.
Personally, I can't see any value in a leveraged rental business at today's yields and BTL rates. Properly accounted for, the numbers just don't work.
Would you put some numbers on that so we can form our own opinions.
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