WIW - 8 Clarinda Park East - Dun Laoghaire

Following on from here:
viewtopic.php?f=23&t=7546&p=503952#p503952

Quote:
daft.ie/searchsale.daft?id=591672

8 Clarinda - in need of TOTAL refurb but period features intact.

€650k. The clearing price of properties in this area really is falling.

Looking at the work required and poor back yard (garden a stretch) would have to say that this looks a sub €400k home to me.

Bunching with earlier Clarinda thread for perspective.

Comment from “Waitingfortheday”:
Let’s say it needs 300K to refurbish based on typical renovation costs for this kind of thing in the past - now, of course, you could probably do it for 250K, so take a 275K midpoint.

At 400K, you are saying with refurb this would be 675K. That’s 200/sqft for a completely renovated period house in a good, if not prime, location. Wow.

Cheeky response:
In a bankrupt country, with the IMF in, where 1 / 7 are on the dole and half the country’s professionals are up to the oxters in ponzi schemes.

YEP. That is exactly what I am saying. Does anyone know that is the rest of the world 1/2 million is a chunk of change.

By the way, 675k euro is USD €1m ($980k to be correct).

So, you tell me. Compromised Dun Laoghaire property, albeit renovated, is worth more than $1m?

PERSPECTIVE - we lost it - but it bites on re-entry.

CARRY ON

You should also be getting a premium on the amount you put in to cover hassle, risk, and the fact that you’ll be renting elsewhere for months while doing it. say 50k in this case

So 400+275+50=725
725/300=2500/m2

seems fair enough to me, only thing I’d question is if it will really cost 275 to refurbish

I wasn’t actually disagreeing, just amazing how much these have come down. Peak prices were 2.2m (2006)

Well, my guess is that fully refurbished it would rent for about 2750 (a decent, not great, house rented in Crosthwaite for 3K in Sept apparently)

Using an upper-end rental calc (12 months, 5%):

2750x12X20=660K.

You’re probably about right.

And from a quick look back at the Irish Times Archives, these were selling at around 450K Punts in 1999/2000. 700K Euro today would be lower than this.

The top of the tech. boom when we had another mini bubble. More interested in what they were in 1994/95.

There was one renting on Crosthwaite in February, 2011. I viewed it, and it was absolutely pristine, but too rich for my blood at 2500. I offered 2K, but they didn’t bite…

2.5X12X20=600K

Will these settle there, or even south of that? Just get Morgan to fire up his blunderbuss at the start of the selling season, and watch everyone duck for cover…

[Edit: for clarification of location]

but that rental house @2.5K didn’t include the basement in Crosthwaite, right? So it’s 1000sq ft smaller

Indeed. My mistake. Nevertheless, speaking to absolute values, that rental rule-of-thumb would put any such houses much lower than they currently reside. Thing is, is Ireland/Dublin/DL ready for these metrics, or for 200E/square foot, or numbers of light pig, come to that…

5% yield seems a little low for those calcs

%5 would be low for average properties - but would it be low for upper end? - clearly upper end is lower but how much lower is the interesting question

Waitingfortheday - where do you get 5% for the upper end calc?

Somebody must have done a standard deviation from mean of property price against expected rental yield

I think “upper end” could be taken to mean the upper end values (i.e. the assumption was 12 months, no void and 5% is certainly a low yield…)

Yes, that’s what I meant. You could assume 11 months and 6.5%, in which case the actual value of a newly refurbished house would be around 475K, making the sales price 200K or around 61EUR/sq ft.

That seems unlikely to me. The key problem I have with these calcs is the rental market for larger properties in Ireland always seems very low to me in comparison to the mid-sized house cost (e.g. a typical 1500 sq ft 3-bed in SCD in an estate is usually around 1500ish per month, but we are talking a house over twice that size getting less than twice that amount.) I think that the sales price for these may always be higher as they have intangible values (period features, situation in the squares, relative scarcity) which could be seen as of less importance to a renter than a potential purchaser. Interested in other views on this!

Why is that unlikely? I can have my pick of rentals in that area with a €3k budget. Back in the day these houses traded at a discount to smaller properties due to running and repair costs. With new taxes on the way who is to say that won’t again happen?

People spout on about yield and price per sq. foot as if we are at a new normal. WE ARE ABOUT TO DEFAULT. 1 in 7 are unemployed. Our budget deficit is 20bln per annum. We have no functioning bank (other than zombies).

Go on, €500k it is than. $800k USD. Look where we are on the historical price curve!

I should just buy the Four Seasons with 30 of my closest friends and divvy it up instead.

I was told – a-friend-of-a-friend story – that they cost about £100,000 punts at that time. I’ve no idea of the state of the house at the time, but it’s on the same side of the square as the one being discussed.

Not 100% clear on my thinking but always had a problem with renovation costs being lumped in with cost of the house 1-to-1.

If you need a mortgage of say 350 and you have to stump up 50 in equity + 275 refurb and + 50 in rent costs, you would surely have to factor in the difference between the 350 mortgage cost = pay back 700 over 30 years and the opportunity cost of spending the 375k in cash upfront? If you got a 1-for-1 return on the refurb, you’d have a house worth 675k. If someone wanted to buy that house they would only need 70k ish in cash on a 90% mortgage (end up paying back c. 1.2mln in total)…I think the cost of “renovation gaffs” are underestimated as people don’t give sufficient value to the cost of cash upfront (I am assuming that cash savings are used for the refurb not borrowings in the current environment).

I guess you could come up with a formula to differeniate the price of a refurbed gaff v a “doer-upper” based on the future value of the cash required to bridge the gap…adjusted no doubt for a million other things like an option to remortgage the gaff post refurbishment.

Investors in residential property tend to buy smalller rather than larger units. Generally speaking, a largish house will give a much poorer rental yield than a smaller place. That’s why so many of these houses were split up into flats or bedsits.

The asking rents for period properties in Dun Laoghaire are truly eye-watering. I know this one has a seaview, but it’s literally just around the corner :open_mouth:

daft.ie/searchrental.daft?id=1010925

There’s no question that these kind of period houses are pretty, but you would need to either be independently wealthy, or having guaranteed backing from someone to even consider taking on a project like this. A bank probably wouldn’t even want to touch a renovation project like this and the strain of renovating the gaff could be very traumatic to you and your partner, especially when you consider the sizeable mortgage repayments (it would take the entire after-tax salary of a single person earning 50k to pay it). I can’t help but feel that in five years time (maybe even more?), that a fixer-upper like this will be on the market for about half the currenct asking.

Down to €585k now

daft.ie/searchsale.daft?id=591672

Basket case with little garden. Question if a bank will even lend on the purchase. They certainly will not lend on the renovation.

“Cash buyer with vision required. Apply within or call 1-800-PAIN-AND-SUFFERING.”

I called this as a €400k property. Not far off now and I don’t think it is cheap at €585k.

Now down to €545k
daft.ie/searchsale.daft?id=591672