I watched a programme before on this subject, people in the UK with normal jobs and incomes, buying property after property to gain a portfolio. But it was all very much on the edge as it gave the success story and the disaster story. They were buying old council houses, renovating them and then renting them out to Social Welfare or anyone who would hand over money. Everything went fine once you hand god tenants, bought well and the market went your way.
One lady had ten properties, but hardly a shilling in the bank and very pressured to keep focused on her own job. It was all the promise of tomorrow and it ticked over until she had to sell some properties to keep the cash flow moving, everything was just far too tight for me.
Then you had the disaster story of another buyer who had three properties with only one unit let and having to pay the mortgage on the other two since they bought badly and bought into areas where it could have gone so right or so wrong. Unfortunately, it all went wrong. Very worrying, I feel people are investing beyond their means and living very close to the edge. We all know that property is a sound investment over the long term but it is the many storms over the long term that you need to weather. Once one piece of the puzzle falls foul, job loss or cash flow, you will have a domino effect on your assets, their is nothing wrong with the posters friend if he can guarantee cash flow and income for lean times, which is a big ask given 5 properties.
There is far too much speculation now in the Dublin market, I went to one sale at the weekend of 55 apartments on the Malahide Road, all sold within 2 days. Mostly to investors, the complex when fully built will have over 700 apartments at the Dublin Hilton, another 5000 houses have been practically being chewed up off the plans along Donaghmede, again a large proportion of investors. I have a feeling that properties for rent over the next few years will require allot more maintenance, better design, better features and that the older rented properties will then go to the market and become residential targets as their rentability will have dwindled.
It is a very unstable and unsure market at the moment, not a case for a burst bubble, but far too much expectancy about rent and values.
I believe those two on Locations, Location, Location have allot to answer for!