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Property - Now Is The Time To Rent

Wednesday, 5 November 2008

With a newspaper article reporting that rental properties have doubled and rental prices have dropped by up to 3.5% this year, it seems that there has never been a better time to rent. Today we have property journalist Roisin Carabine in studio to show us some great properties which are currently on the rental market and to also give us some advice on renting.

We want to show people the alternatives available to them if they can't currently buy.

Is it better to rent than buy?
. It depends on your circumstances. Certainly people are holding off buying because they don't believe that house prices have bottomed out yet, and why buy a house now if you know it will depreciate in value in a month's time.
. Some people would argue that renting is dead money but how much more do you really own of a house if you are mortgaged up to the hilt.
. Renting can make more sense for people who are in unsecure jobs. You could rent a property for the same price you'd pay in a mortgage each month - only your rent is fixed; it won't rise or fall with interest rates, plus you don't have to fork out a big deposit.
. Those who rent properties have the opportunity to live where they want and in a house that they want. Those who buy live in a house that they can afford - which may be miles from work and transport links.


Rental rethink;
. For years the rental sector was inhabited by single people in their 20s and 30s. Now there is evidence to suggest that families are renting.
. According to myhome.ie the stock of rental properties on the market is growing at a rate of 10% per month and is now approaching 10,000 homes.
. According to Daft.ie the number of rental properties has doubled this year from 2007.
. The number of high-end homes available to rent has also increased as vendors who can't sell their properties are offering them up for rent. This means that you can now rent homes you would normally never have been in a position to buy.
. One agency, Colliers Jackson-Stops recently set up a lettings division (previously didn't have one) within the company to cater for clients of high-end homes who couldn't sell their properties. Gillian Ryan who heads up the Lettings Department reports that they've a number of high-end family homes in the South Dublin area and Wicklow for rent. The properties she says are cheaper to rent than buy and the rent is 'negotiable'. Those on her tenant database are potential buyers who are holding off waiting for the market to bottom out before buying.
. As the number of rental properties available increases, the cost of renting is actually decreasing. Bad news for landlords but good news for tenants. Some landlords report that it is taking up to eight weeks now to get a property rented.
. The most recent rental report from Daft in August shows that rents are down 2.2% in three months from June to August 2008.
. The increase in supply of rental properties is having its biggest impact on rents outside the big cities. Rents in Munster, Connacht and Ulster are up to 6% below 2007 levels according to Daft.ie

Cost of renting:
. As the number of rental properties available increases, the cost of renting is actually decreasing. Bad news for landlords but good news for tenants. Some landlords report that it is taking up to eight weeks now to get a property rented.
. The most recent rental report from Daft in August shows that rents are down 2.2% in three months from June to August 2008.
. This year rent for top end homes in the city is down around 10 to 15%. Landlords he says, depending on property size, location and condition can expect around eur400 to eur500 per month per person in rent in Dublin.
. In 2007 rents increased that year by 6.6%, with the average nationwide rent at eur1,400 per month. Rents in south Dublin had biggest increase that year of around 15%, Cork city 12%, Maynooth 10%.
. Big difference in rents in the city and the country according to Daft. Naturally rents in the city, while falling, are holding their value better. The country rents are coming down, especially in areas like Leitrim and Roscommon, where's there's an oversupply of property that shouldn't be there, according to Daft.
. It's definitely a renters market at the minute. The asking price is seen as a starting point for negotiation.
. Renters are becoming more fussy and more demanding of the type of property they want to rent. Landlords are having to redecorate and come up with clever incentives to attract renters.
. Major property agents are cautioning about amateur landlords in the market at the moment and says renters need to be wary. The property boom created an influx of investors who don't treat their property and renters as professionally as what we might see on the continent.

European stats on renting
. Germany has one of the lowest rates of homeownership in Europe with around 43% of population owning a home.
. Spain has highest rate of home ownership around 80%, followed by Ireland, Italy and Britain according to the EU's statistics agency Eurostat.


Properties to rent.

Dublin
Sandyford, Dublin 18
Rent: From €1800 per month

This property was on the market last month with a rent of €2,000 per month. It's been reduced in price by 10%. According to a leading estate agent the rent is certainly cheaper than what you'd pay out in a mortgage.

Louth
The Priory, Westcourt, Drogheda, Co Louth
Rent: €950 per month (last year this property was renting for eur1200 per month)
Rent includes a free week away for four people (NOT including flights) in a five-star Polaris World resort in Murcia, Spain.

Based on the market value of this property at €330,000, buyers would need a deposit of €33,000 and a mortgage of €297,000. Repayments would work out at around €1,900 over 20 years.

This compared to €950 per month to rent. Those renting this property would also be entitled to tax credits which would bring down the cost of the mortgage.


Cork City - Apartment
Elderwood Avenue, Cork City
€1,100 a month

According to the agent this property would sell in the current market for around €300,000.

This apartment could be bought by first-time buyers. If we take the example that there are two, both earning 30,000 a year. They need a deposit of 30,000 and take out a mortgage for 270,000. A standard variable mortgage at 5.01% over 20 years would mean they'd be paying 1,767 a month in mortgage repayments. Over 30 years they would pay 1,4323 a month.

This compared to €1,100 a month.

So again it makes more sense to rent.


Tips on renting;
. A good place to look for property to rent is on the various property websites available for use or your local newspaper.
. If you go through a letting agency you need to make sure the agency is licensed. They normally deal with more expensive properties than a newspaper and if you have to pay a fee to register, find out if you can get this back
. Landlords will usually ask for a deposit which can be one week or one month's rent in advance. You may lose your deposit if you leave without giving proper notice, cause damage, or leave with outstanding bills.
. Don't sign up to a fixed lease unless you can be sure you will stay that length of time.
. Agree the ground rules with your landlord in advance of any lease being signed or money handed over.
. If you live in private rented accommodation in Ireland and pay income tax, you may be eligible for tax relief on part of your rent. You can find info on this on revenue.ie

For More Info.....

DUBLIN
Ballymoss Parade, Sandyford, Dublin 18
Rent:
From €1650 per month
Agent: Dublinlettings.com 01-660 3547
Property: Three-bed two bathroom fully furnished modern family house.
Details: Beautifully decorated throughout with wooden floors, large living room, dining room and sun room. The main bathroom has a Jacuzzi. Off street parking to the front and a garden to the rear. Withing walking distance of the Luas.
Minimum lease of one year.

LOUTH
The Priory, Westcourt, Drogheda, Co Louth
Rent: €950 per month (last year this property was renting for eur1200 per month)
Agent:
Champion Lettings 041-983 0780
Property: Four-bed semi-d (fully furnished)
Details: Accommodation consists of a large living room, kitchen, dining room, two double bedrooms and two single. There is off street parking to the front and a garden to the rear.
Rent includes a free week away for four people (NOT including flights) in a five-star Polaris World resort in Murcia, Spain. To claim the holiday you need to be in the property for six months (rent paid up to date) and sign up to a year's lease. Renters who renew the lease for a second year will be entitled to another holiday in the same resort.

CORK
Elderwood Avenue, Cork City

Rent: €1,100 a month
Agent: ERA Downey McCarthy 021 490 5000
Property: Two-bed duplex apartment with balcony
Details: This is a brand new apartment in a new apartment scheme a bus ride from the city centre and Douglas. It boasts own door access, a large balcony off the lounge, two bedrooms (both doubles, one of which is en-suite) and main bathroom. It's on the market fully furnished and there's designated parking for one to two cars.

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