Key Post: Dublin rental market ?

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Elcato

Guest
I was wondering what the Dublin rental market is like at present (June 2003). I am thinking of investing in a house for rental purposes. I was going to buy in Tallaght area. Any advice would be appreciated.
 
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Landlord eile

Guest
dublin rent

Totally agree with landlord.

Lease on my place is just up and tenant's have moved out. Last year when it was advertised in the papers I got about 15+ calls. To date I have only received 3 eventhough I've advertised it for less than I was getting last year.

If you do go ahead with the purchase I'd suggest that you have at least 2 to 3 months mortgatge payments as backup.
 
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landlord

Guest
dublin rental

Look at the fundamentals.

Does your planned annual rental amount (assume at worst 10 months per annum - like the commercial deals do) cover the current interest charges (NB on the entire property purchase price plus stamp duty / legal - if any, not what the bank would eventually loan you) plus any ongoing outlay (insurance, furnishings, agent fee)

If the rent does not cover these in annual terms after tax then the property is costing you money annually and you are betting on an increasingly unlikely capital return long-term.
 
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landlord

Guest
true cost of property

It is interesting to note that this them has not been taken up further by others - as a owner of several properties - it is certainly an issue that has been taxing my grey matter.

In reality, rents are not paying for the true equity cost of property in real value terms and the capital gain is the only "real" financial advantage available.
 
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Drexxo

Guest
outside Dublin..

I happen to know the Limerick, Cork and Tralee areas (and markets) well. There as a DRAMATIC slow down here in rental properties, I was shocked to see this weekend in Limerick where I now have NO neighbours on all 4 sides, all houses for sale and empty!
In Cork, getting tenants is painfully slow... and in Tralee it looks like supply has equalled demand for new houses -second hand are selling slowly and many cash strapped FTBs have pulled back as they know they will not be able to rent-a-room.
 
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landlord

Guest
344 views but only 4 responses

How can I say this...

344 views on a mailstream and only 4 responses - has a raw nerve been touched and no-one is wants to talk...

- are people reluctant to admit that actual rent income is not covering true (total) value outlay on a property in todays market even at historic low rates

I am lucky at the moment not to be looking for tenants
 
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M3

Guest
Re: Dublin rental market?

Landlord,

I shall rise to the bait and nail my colours to the mast. I've decided to sell my investment property once my current tenants move out later in the summer.

I'm lucky in that I've made a nice few quid on my property but I don't see that continuing into the future so I've decided to get out while the going is good.

I'm constantly amazed that house prices are still going up , I bought my own house for 390 almost a year ago and a house across the road has just sold for 465 , thats almost 500K if you take stamp duty into account. Its a nice house but not that nice.

M3
 
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Drexxo

Guest
Colleges

Many landlords are being burned by the over supply of student accom. especially section 50 near colleges and uni's. Student will be offered tailored facilities are reasonable rent, leaving student houses gathering dust.
 
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Moneybags

Guest
Re: Rental Property

Hi Landlord,

I think a lot of investors (probably mistakenly) aren't looking at property in purely commercial terms.

I have acquintances who are getting into buy-to-let property today even though they realise they're buying at the top of the market and that tenants are thin on the ground.

One friend put it to me like this. He's got €50,000 to invest in a €300,000 apartment. Even with no capital appreciation, he'll have an asset worth €300,000 when the mortgage is eventually repaid.

I haven't got the software to work out an internal rate of return, but my friend is convinced his €50,000 wouldn't achieve the same return over the same time scale in the stock market or anywhere else. He is also confident he has the surplus cash to subsidise the mortgage repayments when/if the apartment is empty.

Something tells me his logic is fuzzy but I haven't been able to deliver the knock-out blow to his argument. Can abyone enlighten me?
 
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Drexxo

Guest
deposit

Why does he not put it in a (0%) deposit account ? If there is no appreciation he will be subject to inflation on both counts, but have no interest/insurance to pay on. Besides ove the next 5yrs his 300k will become 260k.
 
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S

Guest
DEPOSIT

Drexxo
" Why does he not put it in a (0%) deposit account ? If there is no appreciation he will be subject to inflation on both counts, but have no interest/insurance to pay on. Besides ove the next 5yrs his 300k will become 260k."

????? >:
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ClubMan

Frequent Poster
Messages
43,880
Re: DEPOSIT

I think Drexxo is trying to give an analogy which will illustrate the pitfalls inherent in the assumption that investing in property is necessarily a good idea in the case mentioned above and summarised here:

One friend put it to me like this. He's got €50,000 to invest in a €300,000 apartment. Even with no capital appreciation, he'll have an asset worth €300,000 when the mortgage is eventually repaid.
 
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southside55

Guest
Dublin rental market

I have just secured a reduction in our monthly rent from €1800 to €1600 for a house beside UCD. Our landlord was very hesitant to agree but after a week or so gave in so the rate of return is very quickly diminishing for landlords and it is only going to get worse in the next 6 months or so as the number of new apartments come on the market at the rate of knots.
 
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househunter1

Guest
50K down

Invest 50K in the market get a 7% appreciation + 3% annual divedend. reinvest this result 300K after 20 years. Not an apocolyptic return actually pretty miserable given historical returns, but nevertheless I'd prefer to spend an hour a year managing this account rather than a property tenants etc. That thinking is well flawed!
 
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anotherlandlord

Guest
They asked me to reduce their rent

I have tentants who asked me to reduce the rent last monnth. Sorry i should say, demanded.
I said no and they said they'ld move out.
So i said fine and now they've asked to sign a new lease.
I wasn't going to increase the rent since they were there 2 years, but now i'm a little peeved so i might increase it by about €100.
Maybe I'm a bit spiteful.
If they move out fine, i can get someone else.
It won't be a problem, i just filled another apt a few doors away and there was a fair bit of interest.
Anyway, my point is that people are taking this falling rent a bit too literaly.
I guess it depends on the area and all, but it isnt a problem unless you are buy now. Then your rental income will be far below your mortgage.
 
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GeoffreyOD

Guest
Great story

Anotherlandlord has demonstrated beyond dispute the need for Residential Tenancies Bill of 2003.
 
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Annieareyouok

Guest
Not at all

Seems to me he's just decided not to do someone a favour because they didn't appreciate that he hadn't put their rent up in the first place.
My landlord has always been very good to me (not putting my rent up for 4 years) and i understand that if i do something to piss him off i may lose any standing that i have with him and he will just go back to treating me like everyone else.
i.e - i will probably have to pay the going rate instead of the discount i get for being a worthy tennant.
 
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