Best choice of property?

Hi All,

Im new to the property market & considering in investing in a property in Letterkenny as the prices in Galway are just simply out of my budget

I hope to rent the property out in order to cover most of the mortgage. I'm looking at 3 options at present but am unsure which property would be the best for me. I eventually hope to sell it on in 5 - 10 years. Which would be both good for rental income & appreciation?

1) A 3rd floor, 3 bed, 1 bath apt located in the city center @ 165K
2) A 4 bed, 2 bath semi-det house located in an upmarket area of Letterkenny, 1 mile from the city center @ 205k
3) A 3 bed, 1 bath semi-det house 2 mins from L.I.T college @ 180k

All opinions & views are most welcome alongwith any other advice.

Thanks!

Philip.

What rental would you expect from each of the above?

Hi Liteweight,

Well the going rate from each of the above seems to be the following from daft.ie and other online rental sites for the Letterkenny area;

1) A 3rd floor, 3 bed, 1 bath apt located in the city center @ 165K - Rental: approx €800 month

2) A 4 bed, 2 bath semi-det house located in an upmarket area of Letterkenny, 1 mile from the city center @ 205k - Rental: €900-€1000(individually rented rooms) or €800-€900 (whole house rented)

3) A 3 bed, 1 bath semi-det house 2 mins from L.I.T college @ 180k - Rental:€700-€800

I'm not from the area so more research is needed, these are just guide prices from the rental websites. Although, the prices seem to vary widely.

The first property produces the greatest yield, approx 5.8%, based on figures above but it only has one bathroom.

The yield on the second property is between 4.6 and 5.85 approx depending on rental achieved. I'd probably opt for this one as at the higher end the yield is good but also the location of the property....not too far from centre, upmarket area will always sell more easily and rise in value more (hopefully). Also it's 4 bed so good sized family homes in a decent area will always be sought after.

Property 3 will probably never be short of tenants unless there is a lot of section 50 property in the area.

Yes, I like the second option too as it is a really nice house also and could yield high rental. It is a new house too. The houses in the student area (house 3) all seem a bit old and run-down a bit. Also, renting these in the summer could be a problem too. Ill message you the link to the houses if you want to take a look. House 2 definetly seems worth the money.

Great! I'm a nosey type!

Hi Philboy,

I am from Donegal & I currently have an investment property in Letterkenny.

I would urge caution - I can assure you that the levels of rent mentioned in your first post are not possible to achieve.

While Letterkenny is a rapidly growing town, the rate of growth in property is much too fast. It is mainly being purchased by investors.

Please review your calculations based on rental figures of €600 / €650 per Month for the 4 Bedroom Semi D also reduce this further for unoccupied periods - typically 10 months rented per year.

I am not trying to be negative, just urging caution!!

If you want some more information please feel free to PM me.

Cashman

Cashman said:

Hi Philboy,

I am from Donegal & I currently have an investment property in Letterkenny.

I would urge caution - I can assure you that the levels of rent mentioned in your first post are not possible to achieve.

Click to expand...

I was thinking somewhat the same when I first read the post. Advertised rentals on Daft may not reflect the true market. In Dublin I am trying to arrange an apartment for a colleague coming over next month. I offered 900E (cash and 4 months up front) on one advertised for 1250E and whilst he said no initially he is now willing to negotiate a price.

P.S. If you want good advice for free wait for Galway market to fall and buy in (city centre only as salthill is out of your price range).

Thanks for all this advice guys. Would be nice to hear from others in the Letterkenny area or those who have experience of renting there for true rental figures and whether there is too many houses available to rent etc..

I hope I didn't misread your first post but you appear to be a first time buyer - in that case you would have to consider the taxation and stamp duty implications of making your first property an investment property. There are many and varied threads on this issue on this forum. Good Luck!