The times they are a changin’, as we all know too well. The immediate short term changes we’ve all had to endure are obvious, but what about the long term? What does this ‘New Normal’ mean for investors and landlords? Strategies long-planned out may now have to be drastically reworked. It’s time to think outside the box or, outside the Pale if you will.
As we’ve discussed over recent weeks, the short term exodus of tech and other office workers from Dublin city has had a marked effect on the rental market there. In fact, only one or two months into our first lockdown, agents with interests in Dublin’s Docklands were reporting a 10% reduction in occupancy. Tenants now working from home wanted more space and a garden. All of a sudden ‘out in the sticks’ didn’t look so bad.
So what is out there?
If we ignore the immediate suburbs of Dublin and travel beyond the Pale, almost immediately your investment seems to get a lot more bang for your buck. Let’s take a 3 bedroom semi-detached house for example.
In Dublin, a 3 Bed, Semi-D in Rathfarnham will set you back anywhere between €325K to €900K (as per Daft.ie at time of writing). Obviously, the scope is huge here, so let’s just work with our lower figure of €325K.
For that investment, you could get the same property in Cavan with slightly more square footage for just €115K. I know full well that there are obvious reasons some may pick one over the other to live but as an investment.
In the new normal, an area like Cavan, which is linked directly to the capital via the M3 making it now only an hour away, seems a lot more attractive to the work from home group of renters. A prime example of all of this is Sligo, where house prices are up an average of 6% due to an influx of remote workers looking to settle down into a new life. Again this fact is even more apparent when you look at detached house prices rising by 12% in the same area. Opportunity is there for those paying attention.
But let’s say you’re not quite willing to go that far out of town. Let’s take a look closer to home, still working with our €325K budget.
You could pick up a similar property with slightly more square footage in Kildare for just €155K (as per Daft.ie at time of writing). Again, for all the same reasons I can understand the desire to live closer to Dublin, but as we’ve already said, the times they are a changin’, and with that budget, you could completely refurbish a property and have a solid investment with a strong yield for years to come.
Should you buy?
Like all financial advice, it is impossible to just give a blanket answer (YES!!!), so you should take time to look at the possibilities that may unfold over the coming 1-2 years. Demand is not going anywhere for at least another decade, so no fears there. The key like all investments is getting in early and now certainly feels like the right time.
Should you have any queries regarding your property investments or property management services, please contact us here at KPM Group and we’ll be happy to discuss your options and help wherever we can.