Buy-to-let properties yield good returns for investors
Softer house prices and rising rents saw improved rental income for new buy-to-let investments during the 12 months to the end of January.
The outlook also looks good. At the year end, rental yields rose above 4pc in a number of areas including south Dublin city, west Co Dublin and Limerick. The best yields of 4.3pc and 4.4pc were achieved for three- and four-bedr properties in south Dublin city. In west Dublin, the three main dwelling types, one-, two- and three-bed units achieved 4.1pc plus.
But there were also areas where yields fell. According to the Daft Rental Index the sharpest fall of 2pc was seen for the average five-bed home in Dublin north, which is now yielding 2.7pc.
An even lower yield of 2.1pc was seen in average five-bedroom homes in south Dublin city and north Co Dublin. Rental yields fell for almost all house types in Waterford city, where they average 3.5pc and since rents increased, the lower yields are due to firmer prices. But Waterford yields are above the national average of 3.2pc which is also below the best mortgage rates of around 4.7pc.
Mortgage rates are expected to fall by 0.5pc before next October, so this should also help many investors to ease their burden of subsidising their tenants.
- Donal Buckley
