Moving to Dublin, IR in spring 2018. Looking to connect with you.

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Moving to Dublin, IR in spring 2018. Looking to connect with you.

Marcin Dzieniszewski
Edinburgh, Scotland · Member since 2017 · 5 posts · 0 votes

Hello there :)

First of all, as a new member, I wanted to say big and cheery "Hi" to everybody here and great "Thanks" to the BP team for their amazing work! My name is Marcin and I'm a 37 years old Pole living currently in Berlin. A few months ago I decided to take a leap and start the next chapter of my life as an real estate investor. I quickly took care of my education in the subject and have gained a lot of knowledge from the BP podcast and books.

What I have quickly realised is that Berlin market is currently overpriced and it is very difficult to find properties that will generate any cashflow. However... after spending amazing vacation in Ireland a few months ago ( I also used to live in Dublin in 2008 and I loved it - call me crazy but I even liked the weather :)) I took a look at Dublin's market and quickly noticed the yields uncomparable to Berlin - hence, I'm considering moving there in the spring.

As an absolute beginner (very ambitious but still a beginner) I have million-and-one questions, for which I'm looking for someone who I could ask these to. I'd love to connect with you guys... experienced investors and ambitious newbies like me :)

So... I'm stretching my hand to shake yours; virtually; at least for now...

Best regards

Marcin

:)

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  • Bryan Pham
    Rental Property Investor · Oakland, CA · Member since 2016 · 602 posts · 250 votes
    8y

    Welcome to BP! Just curious, how is the market in Dublin? 

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  • Ronan M.Pro Member
    Rental Property Investor · Chicago, IL · Member since 2015 · 352 posts · 281 votes
    8y

    "What I have quickly realised is that Berlin market is currently overpriced"

    Dublin is as bad if not worse. Plus there is a massive housing shortage there (again) and its a total sellers market. Also the banks never fully recovered from the last RE crash. Lending is still tightly controlled and getting funding for owner occupancy and investment properties is difficult unless you are extremely well qualified. Go online every other day and read the Irish Independent newspaper. They talk about RE daily and you will soon get a feel for market conditions there.

    It is a very over priced city in my opinion. Prices have sky rocked the last few years and so have rental rates. As a result they have a bunch of new taxes, rules and regulations that may it very difficult and less profitable for small time property owners. Tenants (like most of Europe) have considerable rights.

    Flipping might be an option as house prices continue to rise so appreciation might be a play if you have deep pockets for cash purchases and too fund the rehab.   

    As an aside they do have a considerable Polish population in Ireland so you should have no problem meeting fellow Poles.

    Best of luck.

    1Reply
  • Marcin Dzieniszewski
    OP
    Edinburgh, Scotland · Member since 2017 · 5 posts · 0 votes
    8y
    Originally posted by @Account Closed:

    totally agree  with you on this. Dublin is way overpriced at the moment. Also the regulations are disproportionately tenant friendly. they are thinking of introducing a no eviction law. imagine if the tenant does not pay/wrecks the house and you still cannot evict. 

    about the housing shortage, there is about 8k new houses are being built now and 35k needed just to maintain the balance. Also they didn't build almost any in the Last 7-8 years, so around 150-200k behind. this is the same in every major cities. but if you are willing to do Reno, there are still some gems to be found. 

    banks require 10% from first time buyers and 20% from others. onlu allowed to lend up to 3.5 times the total household income. 30% required from investors. 

    government is hoping for the landlords to sort out the housing problems, but at the same time won't allow us to make any profits on it and create too tenant friendly legislations.

    Thanks for your replies guys. I appreciate your input.

    Both Berlin and Dublin purchase prices seem similar with the difference that the same apartment that you rent out for 700-800€ in Berlin costs 2000€ or more in Dublin. In my understanding the housing shortage is a good thing from landlord's' perspective, keeping the rents high and allowing to profit - which becomes more and more difficult in Berlin. If you find a property that yields 3% you are lucky.

    Berlin also has very tenant friendly laws which don't allow the rent to be increased more than just couple percent per year and rents have to stick to market standards. A lot of people have very old long term contracts and pay cheap rents. When you buy a tenanted property it comes with the tenant, and you can only legally get rid of one if you plan to occupy the property yourself - on up to 9 months notice.

    Rehabbing distressed properties is something that I'm very much interested in and I've seen a lot of these around Dublin - in Berlin there is very little left. It was in fact very surprising to me to see the same houses that stood abandoned in 2008 still untouched till today, despite such a shortage. Why don't investors do BRRRRs on those?

    So, in my understanding, the above makes Dublin much more interesting market, however if they would really introduce a no-evic law that would be a killer. Is there a city in western world where such law already exists? Doesn't it make rental investments impossible?

    Best regards

    Marcin

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  • Marcin Dzieniszewski
    OP
    Edinburgh, Scotland · Member since 2017 · 5 posts · 0 votes
    8y
    Originally posted by @Account Closed:

    Just to give you a few reasons why there are still so many vacant houses in the middle of the housing crisis:

    The owner is in a government subsidised care facility. If they sell or rent their house, they have to put the price towards the cost of care. If they hold onto it, the children can inherit.

    The banks have re-possessed home's and won't sell the house to limit supply and increase the value.

    People have emigrated but are still holding on to the house.

    - People are on tracker mortgages with ~0 interest rate and don't want to lose it.

    - People are in negative equity on their house and still wait to break even when selling. 

    It is easy to hold on to a property with only a few hundred euro/year property tax and (tens of) thousands in increased value per year. 

    Also because investors are competing with home buyers, we tend to get outbid. A home purchase is an emotional decision while investors calculate returns, analyse risks and hunt bargains. 

    With all this, I'm not saying it is impossible to find a deal, but much harder than 3 years ago. 

    If you have finances sorted, auctions are worth to try. But if you need a bank loan, the numbers just won't make sense. Investors can only get a loan for max 20 years up to 70% of the value. As opposed to first time buyers 10% down for 35 years. Also very difficult to get finance on houses to be renovated. Hard money lenders don't operate in Ireland bar one on extortionate rates. 

    Just my 2 cent.

    Thank you Laszlo for the comprehensive answer...

    Perhaps I should stay in Berlin :)

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