A second home

A Great Idea!

There was a very interesting article in the Financial Times recently with the headline “Resist the urge to invest in holiday homes abroad”. Needless to say, it attracted my immediate attention. It addressed the issue of rent guarantees and pitched that against the deductions that would be made from the rent such as management fees, letting agents’ fees, local taxes and insurance. It also addressed the matter of buyers being allowed to use the property for so many days a year but cautioned that the small print usually specified how and when these days are to be taken. In short, the author concluded that the deal neither offered a personal holiday home or an efficient investment.

When I consider the sale of holiday homes in this area and look at the less than seasonal weather this summer, I am encouraged by the high level of usage by owners of second homes in the area. The beauty about the area is that prices are still relatively modest so there is a good opportunity for growth in value, particularly when interest rates are so low. In addition this reduces the pressure on owners to get a rental return so there are no tax liabilities in relation to rental income. Because about 75% of owners live within a two hour drive of the area they can make snap decisions about when they wish to use the home without being at the mercy of airports, flights and transfers.

Having a second home in this area makes a lot of sense, excellent amenities, great sights to see, the ocean, rivers, lakes and hills, the vibrancy of the resorts, the food, the music and, of course, the people.

Start planning for next year. Contact us with your requirements.

A hard question…

Who’s selling?

One of the most frequently asked questions to me by potential buyers is whether or not the property in question is being sold by a bank. The question is asked because the buyer may feel that a bank may accept less than a traditional voluntary seller because they may want to get the debt off their balance sheet. They may also feel that if a bank is selling, it may take an inordinately long time to get a response to an offer. Finally, as a cash buyer, they may feel that a bank may be more amenable to selling to someone who does not have recourse to mortgage finance.

Like the Curate’s egg, there is an element of truth in each of the reasons. There are certainly properties on the market that are being sold by banks, but not as many as people think. Banks will not accept a bad offer just to get the problem off their balance sheet, that is why they employ professionals to sell the properties. Finally, the banks are often very interested in lending money to good prospective buyers – remember, that is how they make their money!

The casualties in this process are individuals who are voluntarily selling their first or second homes. These are not fire sales but they are people who are selling for a myriad of genuine reasons – downsizing, upsizing, moving, separating, marrying, etc. etc… Offering these individuals bad or low offers is a bloodsport and it is not fair!

So, what is the solution? Let’s have an efficient, orderly and timely disposal of distressed property. That means that we, property professionals, can get on with our business, selling property and tying to get the best price for our clients, the sellers. That’s our job almost 90% of cases, sometimes we are retained by buyers to act for them. We cannot act for both the buyers and the sellers in the same transaction, that is called a conflict of interest.

I look forward to seeing you call into my office during July and August. Don’t be afraid to ask me a hard question!

Cormac

To sell or not to sell

That is the question!

It’s a funny old world. Every day we read in the national and international media of property prices spiralling out of control again and yet, here on the Wild Atlantic Way, we are seeing what can only be described as a sub-optimal level of activity. There have been plenty of transactions at levels up to €150,000 in the residential sector over the last six months, sales over this level have been sporadic to say the least and there is a shortage at the lower end of the market – where demand tends to be clustered right now. This is the way it is and it is the way it will be until a lot of the “distressed properties” are taken out of the market and sold. Very few developers are bring encouraged to build houses for sale because the potential prices would not exceed the cost of construction!

The conclusion, therefore, is that it is a good idea to come in to discuss with us your expectations if you are thinking of selling. We will try to guide you through the market with the benefit of our knowledge and experience. There are no silver bullet solutions so talk to us – you may benefit from our discussion.

For buyers – now is a good time!