Anyone else caught with apartment in Carrick-on-Shannon ?

R

rabbit

Guest
Hi, I bought an apartment about 4 years ago in Carrick-on-Shannon, Co. Leitrim, brand new from a well known auctioneer there. Given the so called celtic tiger boom of the past 3 or 4 years guess how much profit I would make if I was to sell it ? ZERO. I have been on the phone to the auctioneer recently and the most I could expect for it if I sold it furnished is only ten thousand more than I bought it for. Given the fact I spent good money on a top of the range fit out / furniture package - not included in the purchase price - and the fact I would have to pay auctioneer / solicitor fees if I sold it, I would be selling at less than it cost me, even though it is in excellent condition.

If this is celtic tiger boom, what will the down turn / recession be like ?
 
yes, I have a careful clean non-smoking MBNA employee in it on a lease , but who can be "got rid of" ( excuse the language ) at 30 days notice if required. However, as the tenant is a good tenant and prompt payer of rent each month, the auctioneer says it would be easier to sell with the tenant in place, as the apartment would probably be bought by an investor. Bear in mind some Apartments in Carrick are empty / unlet. Mine was for a good while. One other thing ; the auctioneer said most buyers have disappeared for the summer, so if I put it on the market now it would probably not sell until the Autumn.

To be honest, I wish I had not "invested" there at all.
 
I was put off by the lack of lights on in appts during the winter nights as I often drive thru. Would not sell if you have a tenant unless you are under pressure to sell.
 
markowitzman said:
I was put off by the lack of lights on in appts during the winter nights as I often drive thru. Would not sell if you have a tenant unless you are under pressure to sell.
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True but maybe you are better off taking a small profit and running if you haven't made much in 3/4 years. If a lot of them are unlet and the owners of similiar apartments decide to sell you could have a lot of competing apartments on the market with the owners willing to sell for slightly less than you and your profit is gone altogether. Might be better to get out first than be left holding the baby so to speak.
 
This sounds more like a Letting Off Steam than a Property Investment thread to me to be honest...

rabbit said:
yes, I have a careful clean non-smoking MBNA employee in it on a lease ,
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When you factor in rental income to date are you still at breakeven or at a loss?
To be honest, I wish I had not "invested" there at all.
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How and why did you decide that property, and this one in particular, was the most appropriate investment option for your specific needs in preference to all of the other options available? Was this a calculated investment where you researched it carefully, obtained independent/professional advice and crunched the numbers to check the potential viability of your plan or simply a "punt"?
 
Taking borrowing / interest paid in to account, maintenance charges, cost of outfitting / furniture etc, the empty periods and then the cost of selling - auctioneers fees, solicitors fees etc - I am looking at a loss, despite our celtic tiger boom of the past 4 years. I wish I had invested in Dublin or elsewhere where property has at least appreciated.

4 years ago I researched the property market as fully as I could - but nobody then knew for certain what way the property market in Leitrim, Dublin or elsewhere was going to go - just as people do not know now what the next 4 years will bring. Unfortunately too many apartments have been built in Carrick over the last 4 years it seems, there has not been enough new employment / govt offices decentralised to places like that yet etc.

There is another one bedroom apartment there for sale for 140,000, which is the same price it was sold new for 3 or 4 years ago.

To sell or to hold on, that is the question. I think I will hold on for another while. I suppose all property investment is "a punt" if you want to call it that.
 
rabbit said:
4 years ago I researched the property market as fully as I could
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But did you also research the other possible investment options open to you and then decide that property was the most appropriate for your specific needs? Or did you just plump for property?
 
fair point clubman.
that said despite all the research one can do prior to investing in a buy to let it is a punt in my book until the tenant is in.
At the time of signover there is always a nauseous feeling in my stomach asking me whether this could be a turkey or not!
If I was in rabbit's position (and I have!) I would avoid selling at all costs.
Instead I would go for a lowball rent and maybe throw in broadband in the ad for example. Get the tenant on a 12 month lease.......take the loss but treat them well and hope you can get them to renew at a bumped up rent or hope market strengthens.
As capital cost is low rabbit should be able to shoulder loss for a few years and get self financing soon. In the interim capital appreciation will cover shortfall even if only a % or two.
 
markowitzman said:
As capital cost is low rabbit should be able to shoulder loss for a few years and get self financing soon.
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You mean that rent will eventually cover the ongoing (and previously incurred?) costs bring him to breakeven or even profit (real or nominal?)? Why do you think that this would necessarily be so?
In the interim capital appreciation will cover shortfall even if only a % or two.
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Says who?
 
I looked at other investment options like shares - it was not long after 9/11 and shares looked dodgey then. I know hindsight is a great thing. Interest rates on savings meant deposits of say 50 to 100k hardly kept up with inflation after dirt tax paid etc. MBNA ( the main employer in Carrick ) was expanding at the time, another big employer called Masonite 10 minutes out the road was also doing well / recruiting. Compared to Dublin etc, you could get - still can get - a fine apartment for your money.

I cannot blame anyone. I knew the risks when investing in property. Just wondering if anyone else here had interesting experiences in Co. Leitrim property market ? And what / when they perceive to be the best way out ? Wondering about trying to sell / advertise direct the apt. without paying the local auctioneer the guts of 4,000 to sell it for me....but reakon I will have to use an auctioneer, as most people probably prefer to buy through one I suppose.

Hindsight is a great thing in investing. Ah well, could be worse. By the way, the rent I get is 500 per month for a 2 bedroom apt. there. Rents have fallen there a bit and as I say some apartments are empty there it seems - I know mine has been before the current tenant. I was looking for 550 p.m. but was eventually happy to settle for 500.
 
my point is that rabbit will crystalise a large loss by selling.
At interest only he would be paying something like 4-4.5kpa on say 90% finance?
My god he surely is getting more than 70 euro per week rent?
So worse case scenario is a shortfall of 1-2kpa inc maint and insure?
140k@ 1-2% capital appreciation would mean break even thereby deferring a catastrophic loss if he were to sell?
Am I missing something here?.......sure appreciation is a projection......am just basing it on what he got per annum thus far (past performance is no guide..blah..blah to future returns!).
My gut would never sell a buy to let with a sitting tenant!..........still some gut lining left!
 
rabbit for crying out loud you are getting decent rent for this.
Good yield and sitting tenant.
castlebar properties 3-4 beds worth 250-350k get the same rent with many vacant.
Dont sell just take care of the tenant.
Sorry for being blunt but where else in Ireland are you going to get that yield?
 
The yield is not the thing I am disappointed about. Rent is 500 per month now it is occupied , = 6000 per annum, minus a maintenance charge of approx 1300 per annum. Net Yield is 4700 euro per annum assuming it is always let - it has been unoccupied approx 30 % of time I have had it.

The thing I am really disappointed about is lack of capital growth. If it had appreciated by even say 5% or 10 % per annum that would have made a big difference to the bottom line.
 
markowitzman said:
rabbit for crying out loud you are getting decent rent for this.
Good yield and sitting tenant.
castlebar properties 3-4 beds worth 250-350k get the same rent with many vacant.
Dont sell just take care of the tenant.
Sorry for being blunt but where else in Ireland are you going to get that yield?
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Did not know Castlebar was like that as well...are the 3-4 bed properties there getting rents of 500 per month modern ones with good quality , smart furniture etc ?
 
absolutely mostly new builds and first lets with all mod cons.
many are vacant
12 month lease at lower rent will reduce vacancy % although 30% is scary.
I think there are so many tax break properties in carrick that this is stunting capital appreciation.
Always is the worry of a mass sell off on expiry of tax breaks?
 
markowitzman said:
Sorry for being blunt but where else in Ireland are you going to get that yield?
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markowitzman, I think you are basing your calculation of the yield on a monthly rent of 500 and the apartment being worth 140k. But I think the 140k figure rabbit mentioned was for a 1 bed in the same development and rabbit has a 2 bed I think. So the yield is probably less than you think? We need to know the value of rabbits apartment to calculate the yield.
 
rabbit said:
By the way, the rent I get is 500 per month for a 2 bedroom apt. there. Rents have fallen there a bit and as I say some apartments are empty there it seems - I know mine has been before the current tenant. I was looking for 550 p.m. but was eventually happy to settle for 500.
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Is that €500 gross or net of tax, expenses and allowance?
 
kirian said:
markowitzman, I think you are basing your calculation of the yield on a monthly rent of 500 and the apartment being worth 140k. But I think the 140k figure rabbit mentioned was for a 1 bed in the same development and rabbit has a 2 bed I think. So the yield is probably less than you think? We need to know the value of rabbits apartment to calculate the yield.
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Yes, my apartment is 2 bedroom ( inc one en-suite ) in a nice development, centrally located between MBNA ( the main employer in the town / county ) and the town centre. It is just a matter of hundreds of meters to each. As regards price, I bought it for 178,000 euro, then spend thousands on furniture ( leather suite etc ), curtains, etc and now the auctioneer the Carrick says it is worth 189,000 at most, and even then it is likely I would have to wait until the Autumn to achieve that if I put it on the market now. Out of the 189,000 if I got that I would have to pay auctioneers fees ( 2% they quoted ) , plus auctioneers advertising fees( he said maybe 750 euro ) ,my solicitors fees etc. ...and even a few hundred euro for auctioneers advertising boards he said. In short, I would most likely get back less money than the apartment cost me, so Leitrim must be one of the few counties in Ireland with such poor capital growth in its apartments over the past 4 years ? I heard on the radio that houses have gone up by 30,000 each year in Dublin in the past 10 years - I guess the exceptional growth in Dublin balances out practically zero growth in places like Carrick-on-Shannon to give us our national property boom.
 
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