massive cashflow

Oscar

Oscar

I've joined an irish forum to discuss this, but interested in any view points from here.

I've put an offer on a 5 storey terrace in central dublin (Dublin 1) in an "up and coming area". It contains 19 studios, 1 and 2 bedders. Asking price is 525k euros. I offered 460K. The gross return is 90K a year in rent. I am verifying this through rent roll statements. That's just about 20% gross return. There are all sorts of risks, and plenty of opportunities, but this being a cash buy, I am leaning towards the opportunities.

If anyone has any experience in this type of commercial endeavor I would love to hear it. If it works out, it could be a great little cash cow. people here are very scared about getting back into property, lots of gloom, and therefore a good time to buy?
 
Thats a pretty amazing return which is not seen in australia. I am amazed that they are selling to you at such a low price. Are there structural problems with the building? What would be the net return on this investment? I guess the exchange rate is favourable right now for international property plays.
 
its not mine until contracts have exchanged. In the argy bargy space.

No structural problems to be aware of, except, maybe, for the entire Irish economy:eek:

I will never truly know net return until all the outgoings, taxes, management fees etc are better understood, but my estimates would be in excess of 10%. I am being conservative.
 
A Belgain friend of mine buys these sort of places in Brussels (home of Nato/EU) and has no problem renting them out at those sort of yields - and higher - usually furnished and often short (a couple of months) term.

The only thing I would be a bit wary about in Dublin is the vacancy rates. Remember unemployment is pretty high there now.
 
china said:
Thats a pretty amazing return which is not seen in australia. I am amazed that they are selling to you at such a low price.
Click to expand...


Actually this is the norm rather than the exception in many other countries.

Many people in other countries think Aussies are crazy to invest in property with gross yields around half of the borrowing rates.
 
RightValue said:
Actually this is the norm rather than the exception in many other countries.

Many people in other countries think Aussies are crazy to invest in property with gross yields around half of the borrowing rates.
Click to expand...

correct. it makes no sense to me anymore, but took me a long time to realize that.

Will be great to have income streams generated in Australia, Europe and US. On the down side, tax time in three countries will get complex.
 
Also ask to see the rental contracts not just the rent rolls. And do your own dd rental rolls can be fiddled in the run up to sale.
 
china said:
Thats a pretty amazing return which is not seen in australia. I am amazed that they are selling to you at such a low price. Are there structural problems with the building? What would be the net return on this investment? I guess the exchange rate is favourable right now for international property plays.
Click to expand...

I was in Dublin a few weeks ago. Apparently unit prices in Dublin fell by 60% (houses 56%) since the start of the GFC.
They seem to be in a few problems right now, but I think they will probably sort it out.
Probably a good investment, but I don't know how easy it is to borrow money there (the rate should be very good though).

Be careful though, in more regional places it's not rare for 20%+ of townhouses to be uninhabited. I'm guessing the same isn't true for Dublin 1, but do make sure you do your homework.
 
Congrats Oscar, sounds like a great deal!

I see your in Dublin yourself. Where would one go to find this kind of deal? I'm guessing it wouldn't be found on the internet!
 
RightValue said:
Actually this is the norm rather than the exception in many other countries.

Many people in other countries think Aussies are crazy to invest in property with gross yields around half of the borrowing rates.
Click to expand...

You'll find Australia is just about the only place where interest > rent. Even in Hong Kong, the place dubbed as having the highest price-to-rent ratio, the rent as a yield is > interest in almost all cases.
 
Hi Oscar

Sounds like you're doing well!
Are you able to find finance for these places O/S, or do you just buy them outright?
 
Deltaberry said:
You'll find Australia is just about the only place where interest > rent. Even in Hong Kong, the place dubbed as having the highest price-to-rent ratio, the rent as a yield is > interest in almost all cases.
Click to expand...

Their interest rates are less than one percent arent they? Wouldnt be too hard to have the yields above that!
 
for those that asked about finance; I tried to get finance but had to jump through too many hoops, even on a super high income and seven figures equity. Since all my investments are in Oz and US, the Irish bankers were a bit confounded by it all. This would be a cash buy.

Offer not accepted yet so any congrats is still premature. Will keep you all posted.

@JamieT - all these deals are widely advertised on internet, this is not a special deal by local standards.
 
Irish castles

Hi Oscar

Pls keep us posted on how it goes....hubby's Irish and has always harboured dreams of being the local squire:p

May have to buy that castle with a moat for his 50th!

Hmmm...wondering whether HE is able to obtain finance...seeing he is still an Irish citizen...
 
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