The Allsop Auction is always a popular touch point in the property market calendar for vendors, buyers, banks and protesters alike. But despite the noise and clamour, there are often bargains to be had if you know where to look and plan your bidding carefully. Each day this week in the lead up to July 1st, we are highlighting interesting lots and analysing the assets to help you make a sound investment.
Investments For The Small Investor
North & West Dublin
This is a popular starting point for a private auction buyers looking to invest some money into their first or next asset. Residential is a popular first investment – it’s relatable, understandable and easily manageable – compared to often more complex and riskier commercial investments.
Dublin is also a popular choice for small investors. Although there are arguably greater bargains to be had across the rest of the country, the buoyancy and growth of Dublin residential rents is attracting all-comers to becoming a residential landlord. Plus the potential for further capital growth (i.e. house prices increasing further) is at it’s greatest in Dublin.
This latest auction has a fair mix of small residential assets that would be highly suitable for rentals, ranging from reserves of €120,000 up to over €1 million. Today we are looking at a handful of investments in the affordable lower end of that scale.
1 Bed Apartment in The Atrium Steelworks, Foley Street, D1
This is an extraordinarily well located apartment behind the IFSC and adjacent to Connolly Station. Prime rental area for young professionals working in the city centre. This one bed apartment is on the first floor, extends to approximately 503 sq ft and is currently let at a gross rent of €10,800 per annum (€900 per month).
Pros: Location, Location, Location. Already let and income generating.
Cons: One beds are typically less sought after than two or more. Service Charge will be expensive.
Analysis: Currently let at €10,800 per annum, if you could buy this at the reserve price of €120,000 you would achieve a very attractive gross yield of 8-9% – before subtracting your annual costs (service charge, property tax, letting fees etc). On a block like this the service charge will likely be expensive, at least €1,000 per annum for a 1 bed, reducing the yield of a net of 6-7%.
That’s if you get it at the reserve which is probably unlikely. This unit will be popular. Our prediction is a final bid falling between €150,000 and €180,000 – or 5-6% net yield.
3 Bed Townhouse in Royal Canal Park, Ashtown, D15
Sticking to the northside but heading a bit further out of town provides a bit more space for your euros. This three bedroom townhouse offers it’s own front door and approximately 1,172 sq ft over ground and two upper floors. This is also already let, generating a gross income of €14,400 per annum (€1,200 per month).
Pros: Good demand for 3 bed apartments. Good access from Ashtown into Dublin.
Cons: Location if oversupplied with apartment complexes.
Analysis: The higher rent certainly looks appealing here and a 3-bed is very rentable to key active demographics – student or young professional sharers, growing families who cannot get a mortgage etc. However capital growth will be less powerful in a rising market than the IFSC apartment. A solid bet.
At the reserve of €175,000, this would achieve a gross yield of 8%. However, service charge for a townhouse in Ashtown is likely to be far less than the city centre apartment block equivalent. No need or use of lifts can reduce a service charge by up to 30%. Net yield will therefore also be mid-6%.
This is less likely to vastly exceed it’s reserve, but between €175,000 and €225,000 should be a certain.
2 Bed Penthouse in Lucan, Co Dublin
Spreading our wings further afield again and arriving in Lucan, Lana Na Pairce is a well-built block in an accessible location, close to the N4 with great routes into Dublin. Not much detail on this one, but at only 760 sq ft it is a rather minuscule “penthouse” – we thinks they just mean “top floor”. The property is currently vacant so you would have to quickly find a tenant, but at least you get the opportunity to vet them yourself so they don’t mess up the place.
Pros: Quality apartment. Good access to Dublin.
Cons: Small for a “Penthouse”. Average rental demand. Need to find a tenant.
Analysis: Similar 2-bed apartments (not “penthouses”) are renting at approximately €1,100 per month – so we could estimate a rent of €1,200 per month or €14,400 per annum. Assuming you don’t need to invest further funds into tidying the place up or furnishings, this could be an attractive net yield of perhaps 8-9% at the reserve of €135,000.
Depending on the demand for Lucan investment properties, this might push to achieve between €150,000 and €185,000.